Model Document Retention Policy for Nonprofits

Retention of documents related to lawsuits is one of only two provisions of Sarbanes-Oxley that are applicable to nonprofits. Nationally recognized nonprofit attorney Tom Silk wrote this Model Document Retention Policy on a pro bono basis for CompassPoint Nonprofit Services to use and to make available for all nonprofits.

This document management policy is designed to conform with the charitable laws of states which, like California, given the Attorney General an unusually long statute of limitations (10 years) within which to bring an action for breach of charitable trust.

Three items to note in particular: First, think about this as part of document management, rather than simply document retention; holding on to documents too long is an unnecessary expense. Second, there may be some documents that are worth saving for the community's sake or for the sake of clients that go beyond these legal guidelines. And third, remember that e-mail messages are documents that should conform to these guidelines.

DOCUMENT MANAGEMENT POLICY

For each document, add its location or where it is stored.

Accounts payable ledgers and schedules: 10 years

Accounts receivable ledgers and schedules: 10 years

Audit reports of accountants: Permanently

Bank statements: 10 years

Capital stock and bond records:A ledgers, transfer payments, stubs showing issues, record of interest coupon, options, etc.: Permanently

Cash books: 10 years

Checks (canceled, with exception below): 10 years

Checks (canceled, for important payments; i.e., taxes, purchase of property, special contracts, etc. [checks should be filed with the papers pertaining to the underlying
transaction]): Permanently

Contracts and leases (expired): 10 years

Contracts and leases still in effect: Permanently

Correspondence, general: 4 years

Correspondence (legal and important matters): Permanently

Depreciation schedules: 10 years

Donation records of endowment funds and of significant restricted funds: Permanently

Donation records, other: 10 years

[Note: Donation records include a written agreement between the donor and the charity with regard to any contribution, an email communication or notes of or recordings of an oral discussion between the charity and the donor where the representative of the charity made representations to the donor with regard to the contribution on which the donor may have relied in making the gift.]

Duplicate deposit slips: 10 years

Employee personnel records (after termination): 7 years

Employment applications: 3 years

Expense analyses and expense distribution schedules (includes allowance and reimbursement of employees, officers, etc., for travel and other expenses: 10 years

Financial statements (end-of-year): Permanently

General ledgers and end-of-year statements: Permanently

Insurance policies (expired): Permanently

Insurance records, current accident reports, claims, policies, etc.: Permanently

Internal reports, miscellaneous: 3 years

Inventories of products, materials, supplies: 10 years

Invoices to customers: 10 years

Invoices from vendors: 10 years

Journals: 10 years

Minute books of Board of Directors, including Bylaws and Articles of Incorporation: Permanently

Payroll records and summaries, including payments to pensioners: 10 years

Purchase orders: 3 years

Sales records: 10 years

Scrap and salvage records: 10 years

Subsidiary ledgers: 10 years

Tax returns and worksheets, revenue agentsaEU(tm) reports, and other documents relating to determination of tax liability: Permanently

Time sheets and cards: 10 years

Voucher register and schedules: 10 years

Volunteer records: 3 years

Warning: All permitted document destruction shall be halted if the organization is being investigated by a governmental law enforcement agency, and routine destruction shall not be resumed without the written approval of legal counsel or the Chief Executive Officer.

[Note: this language, which is not typically included in document management policies from accounting firms, provides important addtional guidance and protection for the organization.]

#

Note that organizations that see patients or clients may also have special document retention and privacy policies related to patient and client information.

See also:

Model Whistleblower Policy for Nonprofits

Sarbanes-Oxley and Nonprofits

Comments (60)

  • Anonymous

    Electronic records are an acceptable format unless the paper has a raised seal on it. On the director / officer access. Is really comes down to if they need access to these records to perform job duties. Access should always be granted on this principle.

    Jun 23, 2013
  • Anonymous

    We are a community reentry program for a county jail. We do not provide medical services. How do I find the length of time for client record retention?

    Oct 07, 2013
  • Here is my response to a couple of posts. Electronic Records: generally speaking electronic records are acceptable if image is a true and accurate representation of the original. The only exception would be items with a raised seal. Keeping records on site: records should remain readily accessible. The term readily accessible could vary based on related laws an regs, although it basically means being able to retrieve in a reasonable amount of time. Access to corporate records: your records management policy is what should dictate whom can access records. The principle of least privilege is what should guide access. Basically says people should have access to information they need to perform their job. These are great questions! Keep them coming.

    Oct 12, 2013
  • Anonymous

    What about dissolved nonprofits?

    Nov 08, 2013
  • Anonymous

    This list mentions canceled checks, but who even gets those anymore? Do we need to print the image of our canceled checks off from our online banking? Or is the record of payment (the bottom stub of our checks that we keep) good enough? Thanks!

    Oct 30, 2014
  • Anonymous

    What about donor acknowledgements related to annual giving, sponsorship, and other monetary gifts? In this day of databases that record the date that an acknowledgment was generated and send, do non-profits need to keep an electronic copy of the letter to the donor or is it sufficient to just list the date that an acknowledgement was sent?

    Jan 13, 2015
  • Anonymous

    I need document retention for nonprofits specifically for Ohio. where can I find that information. Thanks

    Apr 20, 2015
  • Anonymous

    How long do you keep grant proposals that relate to a private foundation grant award? Does that fall under the "significant funds" category of keeping permanently?

    Jul 28, 2015
  • Any information as to how long nonprofits must retain child care signed consent and release forms from a program activity or convening? Thanks!

    Feb 06, 2017
  • It depends on the statute of limitations for personal injury in the state in which your nonprofit is located/activity takes place. A participant injury may not be realized or reported when it occurs. For adults, the statute of limitations in most states is 2 years; however, some states have a 1 year statute, while other states have 3, 4, 5 and 6 year statutes. In most states, the statute of limitations does not begin to run until the minor reaches the age of majority (typically 18 years of age), so in a state where the statute is 6 years, the minor could bring a claim before he/she reaches the age of 24. Best practice ... this means you should hold waivers for 10-20 years depending on the age of the participants.

    You should consider retaining the 'wet signature' copies for 12 months and then scan into a PDF for archiving.

    Most injuries/claims from an activity/event are going to be reported fairly soon, if not immediately. Use your judgment and establish a policy for document retention based on type of event/exposure.

    Feb 10, 2017

Pages

Leave a comment

Fill this field in if you want to post a name a user login

Filtered HTML

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <small> <sup> <sub> <cite> <blockquote> <code> <ul> <ol> <li> <dl> <dt> <dd> <h1> <h2> <h3> <h4> <img> <br> <br/> <p> <div> <span> <b> <i> <pre> <img> <u><strike>
  • Lines and paragraphs break automatically.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

subscribe (free)

 

Donate to American Nonprofits, sponsor of Blue Avocado