Discretionary mutual funds (DMFs) are attracting increased attention as alternative risk solutions for groups like churches and camp organisers. While DMFs can provide member-focused benefits and sometimes lower costs, this excerpt from the full report explains the unique risks that set them apart from traditional insurance. Notably, DMFs lack a legally binding contract to pay claims, do not fall under strict financial and consumer protection laws, and rely on member contributions rather than regulated reserves. For church leaders and managers, it’s vital to understand the lack of guaranteed payouts and more limited dispute resolution options available compared to standard insurance policies.

Read on for further details about the pros, cons, and key differences between DMFs and regulated insurance arrangements.