PGTS STANDARD
3. All PGTS personnel are adequately covered by a fidelity bond. (NADWP S 04 47) [PGO, PGP, PGTS]
When your attorney writes their opinion regarding the liability your organization assumes when offering Planned Giving & Trust Services (PGTS) to your constituents there is real risk that is being described.
The 50 PGTS Standards, NAD Working Policy (NADWP), Guidelines, and Continued Professional Education (CPE) all seek to give direction that, when followed, will reduce the risk associated with PGTS operations. However, risk cannot be completely eliminated, thus there are two risk management products that seek to mitigate the risk that may remain.
MISCELLANEOUS PROFESSIONAL LIABILITY – TRUST
NADWP
S 60 32 Miscellaneous Professional Liability— 2. Trustees Errors and Omissions Insurance shall also be carried on all trust officers employed by the denominational entity as approved by the NAD Risk Management Committee.
The name of this policy is MISCELLANEOUS PROFESSIONAL LIABILITY – TRUST. This policy is directly related to the services that are specifically offered by PGTS and covers Trustee Errors and Omissions. If you have a document that was incorrectly prepared and results in litigation, this policy will help pay for the legal defense and any judgement resulting from that litigation.
When you receive your Trust Review Report and there are audit findings listed, they need to be taken seriously and corrected since these are the areas of your operation that carry the most significant possibility of risk.
Even though the MISCELLANEOUS PROFESSIONAL LIABILITY-TRUST policy is provided to your organization free of charge we hope that you take very seriously the operating of your office according to the PGTS standards, NADWP, and Guidelines.
EXECUTIVE RISK
An additional policy provides coverage required by PGTS Standard #3 and NADWP, both of which are shown below. This bond is referred to as EXECUTIVE RISK and covers multiple types of church personnel including clergy, education, notary public, internal auditors, accountants, attorneys, and PGTS employees as they offer trust fiduciary services to church members.
NAD WP
S 04 47 Fidelity Bond—It is recommended that denominational organizations protect church assets by utilizing a commercial blanket fidelity bond of adequate limits. Employees or volunteers who have committed prior acts of theft or dishonesty are not covered under fidelity bonds. Where fidelity bonds are not available, provision shall be made to allocate funds to cover possible fidelity losses.
The Miscellaneous Professional Liability Trust and the Executive Risk policies are provided by Adventist Risk Management and the GC PGTS department to all Seventh-day Adventist entities that offer Planned Giving & Trust Services world-wide. The cost of the Executive Risk Policy is prorated to all organizations world-wide. As we all work together to reduce the risk of offering our constituents Planned Giving & Trust Services we hope that these policies will never need to be used. If you have questions about these policies check with your treasury department or contact our office at 301-680-5002.
Take Immediate Action
If you have any indication that your organization may have a PGTS issue developing, you should always communicate immediately with your local legal counsel. Do not wait, hoping it may go away. You may also contact the GC PGTS office at [email protected] or 301-680-5002. If you have questions in the context of PGTS about a possible liability issue you may contact Adventist Risk Management at 301-680-6800.
Another resource that is available to you is the General Conference office of General Counsel. These are the attorneys who give counsel for the GC and NAD for PGTS issues. Tom Wetmore is the attorney assigned to PGTS, and may be reached at 301-680-6000.
How do the levels of service affect professional Liability?
There is always risk in whatever we do as a church organization. It is the degree of possible risk that will change in the new levels of service.
A less than full-time equivalent employee providing complex levels of service gives more opportunities for failing to provide the necessary services properly and exposes the organization to more risk. The new levels of service give smaller PGTS office operations the opportunity to reduce risk by providing less services that create risk.
Those programs who become PLANNED GIVING ONLY (PGO) will have a significant reduction of possible risk since they are providing no fiduciary and very limited services to members.
PLANNED GIVING PLUS (PGP) organizations offer more services and so the risks increase even though they offer no fiduciary services.
The highest risk is when an organization is involved in offering fiduciary services, this level of service is called PLANNED GIVING & TRUST SERVICES (PGTS). When an organization’s employees act on behalf of their members in a fiduciary capacity there is the greatest possibility of risk.