How can nonprofits make sure that they are retaining the right documents – and for the right amount of time?
A Document Retention Policy is an organized and efficient way to help nonprofits clean up old, unnecessary documents while ensuring that important documents are preserved for the benefit of the organization.
Some examples of useful documents include:
IRS Forms 1023 and 990 – legally required for public disclosure
Founding Documents (such as bylaws) – necessary for running the organization
Financial information – may be required for an audit
Administrative information – needed for record keeping purposes
Old marketing materials, emails, etc. – useful references in drafting new marketing materials and correspondence; may also be helpful for new directors and staff members wishing to learn more about an organization and how it is run
Having a schedule of retention helps an organization to stay organized and to clarify once and for all which documents need to be saved – and for how long – and which need to be disposed.
Why should donors care about document retention?
As a donor, it’s nice to know that the organization you’re donating to is thorough with their work and pays attention to the details. But that’s not the only perk. Having a document retention policy also helps in ensuring that confidential information is being handled carefully and that it is disposed of in a proper manner.
In order to meet this Standard, nonprofits must maintain a written policy outlining the retention and destruction requirements for its key governing, legal audit, and financial documents and ensure that the policies and procedures described are enforced and upheld.
To learn more about the Council's Accountability Standards or to download the complete list, click here.