Document Retention Policies for Non-Profits

Posted on: November 28, 2016

Non-profit organizations, like any other type of business, tend to generate a great deal of paper—and chances are not all of it needs to be kept on file. The question is, exactly what does need to be kept and what can be safely destroyed?

Because they are tax-exempt, non-profits are held to a different standard by the IRS than a for profit organization and the rules for document retention are more stringent. Exact standards vary by state and the type of activity the non-profit is engaged in, so there is no one size fits all list—just as there is no single type of document that each organization produces.

Should You Keep or Toss?

In order to follow the laws governed by each state, it’s up to each individual non-profit to investigate on their own what is needed, but there are some general guidelines for document retention which can be safely followed by all. Developing a written document retention and destruction policy allows every member of staff, including volunteers, to see first hand what is required and to be consistent with document management. Adopting a written policy is also referenced by the IRS, on Form 990, asking whether such a policy has been put in place, and highlighting the responsibilities of the organization and it’s individual members.

Records which should be kept indefinitely include:

  • Checks
  • Financial statements
  • Insurance policies
  • Documentation from independent audits
  • Tax returns
  • Minutes from all annual, and board meetings
  • Articles of Incorporation
  • Corporate resolutions
  • Determination Letter from the Internal Revenue Service and all accompanying documentation
  • Bills of sale
  • Mortgage documents
  • Real estate deeds

It’s important to verify state policy on the following items, but when in doubt, include them as part of your document retention policy:

  • Donation records
  • Correspondence
  • Credit card receipts
  • Employee records
  • Vendor contracts
  • Banking information
  • Volunteer records
  • Grants and grant applications
  • Licensing records
  • Investment documents
  • Associated activities or programs

Tips For Document Retention

Document retention is not only applicable to paper items, but also to any records kept on computer hard drives, information contained in emails, or stored in the cloud. When composing your written policy, be sure to include this information, and to back up your data. Additional tips include:

  • Your accountant can provide further information regarding financial documents and the required length of retention.
  • An effective document retention policy protects the organization, its members, and the public from scrutiny, while ensuring accountability.
  • Include this policy as part of the onboarding process, to ensure new members are aware.

Disposal of Unwanted Items

Those documents and records which are deemed safe to destroy, should be disposed of in a manner that ensures the information contained within them remains confidential. The only method of secure document destruction, is professional, on-site shredding, which guarantees the permanent destruction of paper, and other materials such as CD’s, DVD’s, computer backups, instructional materials, and more.

TrueShred is a trusted source for secure document destruction, in and around Washington, DC, Maryland, and Northern Virginia, shredding exclusively on-site, to ensure a secure chain of custody. TrueShred is AAA NAID (National Association for Information Destruction) certified, for guaranteed compliance with regulatory bodies such as FACTA, HIPAA, Sarbanes Oxley Act, and  the Graham-Leach-Bliley Act. At the conclusion of the shredding process you will be issued a Certificate of Destruction as part of your audit trail.

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