Tip of the Week: Nonprofit Document Retention

Now that you have good accounting records, what do you do with all those documents?

It is a best practice to have a written document management policy that describes what types of records and documents to keep, for how long, and schedules what to do with those records after that time passes. On the Form 990, the IRS asks whether an organization has a document management policy, and in its 990 instructions, describes it as: “A document retention and destruction policy identifies the record retention responsibilities of staff, volunteers, board members, and outsiders for maintaining and documenting the storage and destruction of the organization’s documents and records.”

Adopting a document management policy is a key governance step that will serve as a protection for the organization, its staff, and its board. It’s a worthwhile investment of time and resources to craft a policy that will effectively apply to an organization’s specific recordkeeping requirements. Remember that electronic documents are equally governed by adopted policies, and email messages count as documents, too!