PGTS Standard
- All physical files with current or potential fiduciary duties and all current legal documents are kept in properly secured fire-resistant files/vaults. All other fiduciary files and non-current legal documents are kept in safe and secure files.
- Electronic files held in a fiduciary capacity and other legal documents are properly backed up and secured per organizational policy approved by the governing board or committee and legal counsel. [PGP, PGTS]
Storing Files
Most organizations have little to no difficulty complying with part a of this standard. Trust Review findings throughout the North American Division (NAD) do not contain many issues for physical files stored in a fire-resistant file or vault.
However, there can be some confusion about what is required to be held in fire-resistant files or vaults. If the organization has informational-only donor files, meaning files that do not contain originals or copies of completed and signed legal documents with fiduciary duties, then these informational-only files are not required to be stored in fire-resistant files or vaults. Keep in mind that just because these informational-only donor files are not required to be kept in a fire-resistant file or vault, it does not mean they cannot be stored with the rest of the legal files. If these two types of files are stored together, they then would be required to be stored in fire-resistant files or vaults.
Electronic File Storage
Standard 23b reflects the change to working policy BA 70 10.6 Record Retention voted at the NAD Year-end Meeting 2019. Before 2019, almost all original paper documents were required to be kept in their original form forever.
NAD Working Policy BA 70 10.6
6. Planned Giving & Trust Services Programs Trusts, wills, charitable gift annuities, and other estate planning documents shall be retained permanently in their original form. Other documents including information worksheets, accounting reports, tax returns, correspondence, email messages and other routine materials may be retained in a secure and accessible electronic form. These guidelines shall be reviewed periodically, e.g., every three to five years.
New Working Policy Requirements
Legal documents are now the only documents that are required to be kept in their original form forever. Some examples given in the policy of documents that must be permanently retained in their original form are trusts, wills, charitable gift annuities, and other estate planning documents.
Informational documents may be kept in electronic form. With direction from your information technology (IT) department and your local legal counsel, your organization may formulate a secure record retention policy that will comply with the working policy, data security, and local statutes. A schedule for document destruction of the original informational documents after scanning them should be included as part of this retention policy.
This new possibility for electronic record retention for informational documents should reduce the amount of original paper needed to be stored in fire-proof files or vaults. Information on these documents will still be accessible, but they will not take up physical space in the organization’s storage areas. No doubt organization’s facility managers will be grateful for this new working policy and standard.
How to start
The best place to start developing an organization’s data retention policy is with the organization’s IT person and legal counsel. Share the Working Policy and Standard 23 with them. With their cooperation, outline a process to create the data retention policy if one does not already exist or update the existing one to allow for digital storage of informational documents. Don’t forget to include in this policy a schedule for destroying informational-type documents after they are scanned.
When the record retention policy is in place, office procedures should be established or modified, and personnel trained on how to implement the policy. This process may involve purchasing desktop scanners to make the scanning process more efficient.
Periodic review
Working policy BA 70 10.6 requires periodic review of the record retention policy for the organization. This review could be done at the same time attorney opinion letters are reviewed and revised for the organization.
As the processes and procedures are being established for implementing the data retention policy for the organization, the reviews may need to be more frequent to confirm that personnel are clear on what is required and to make adjustments as needed.
Conclusion
Creating and implementing this new standard and working policy will require time and effort, but the long-term benefit will be worth it since the amount of storage required will be significantly reduced.
Imagine a donor file where the organization has been a fiduciary for many years and all the original documentation, both legal and informational has been kept; there could be an entire file drawer of documentation. The legal document portion of that file may be at most 4 inches to 5 inches. Reducing the physical storage from a file drawer to a single file folder is a significant long-term benefit. Treasurers and facility managers will appreciate the reduction of long-term storage required for the PGTS Department.