Nonprofits: Record Keeping & Retention policy

Accountability is the buzzword with the nonprofit watchdogs. At the helm of accountability is the record keeping and retention policy of an organization.

A well written record keeping and retention policy is recommended by IRS for proper governance.

The record keeping & retention policy must be formally approved and adopted by the board of the organization.

Following is a sample record keeping and retention policy for a nonprofit organization which can be used as a reference for drafting the organization’s record keeping and retention policy.

The documents that are generally maintained are mentioned below. The records to be kept are categorized based on their retention period.

Documents to be retained permanently

Articles of Incorporation & By Laws
Certificate of Incorporation/Other Incorporation documents
Board & Committee meetings – minutes
Form 1024 – Application for tax exemption
E.I.N allotment letter
IRS Determination letter and related papers
Construction related documents
Contracts and Leases agreements and related documents
Important legal correspondence
Staff personnel records
Staff retirement & Pension records
Employment applications of existing staff
Financial statements
General ledgers
Subsidiary ledgers
Cash book
Fixed Asset records
Tax returns
Canceled checks – related to important payments
Current Insurance policy
Expired Insurance policy
Accident reports and Claims (Current & settled claims)
Copyright, patents & related documents
Property appraisals documents
Real asset documents – Property deeds, mortgages, etc.
Investment records – stock /bond certificates and others

Document to be retained for 11 years – Employee Workman’s Compensation Documents

Documents to be retained for 5 years

Bank statements & reconciliations
All canceled checks
Cash receipts and payments
Expired contracts and leases
Assignments and Garnishments
Employee Benefit Plan Documents
Payroll Records
Payroll Reports (Federal, State or Local)
Personnel Records of terminated employees
Time sheets & Attendance records
Bills Payable Ledgers and Schedules
Bills Receivable Ledgers and Schedules
Tax Return Worksheets
Organization write-offs
Form 990, W-2 / W-4 /  etc.
Grant Inquiries
Inventories register
Vendor invoices
Customers invoices
Paid Bills & Vouchers
Canceled stock and bond certificates
Vendor Payment register
E mail records

Records to be maintained for 3 years

Correspondences of general nature
Bank deposit slips
Application for employment
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About the Author:

Shirley Adair is the founder of 'Dreams Unlimited', a nonprofit organization working in areas of child care, child welfare, juvenile justice, addiction, health and unemployment

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6 Responses to “Nonprofits: Record Keeping & Retention policy”

  1. Chris Curtiss says:

    I see guidelines re: separation of general employee records & medically related employee records. But, a question: After termination, but before the deadline when such records would be shredded/destroyed, is it still necessary to store employee general records & medical information separately AFTER an employee is terminated or resigns? Can both be combined & securely stored for the duration?
    Thank you.

  2. Earl Johnson, Jr., CRM says:

    As a records and information management (RIM) professional of some 30 years, I can tell you that email is generally a “transport vehicle/media” for information, and the retention of it should be based on its CONTENT, and not the media or vehicle itself. 5 years may be suitable for some email records based on content, but may not be for others—again, based on content. However, [even] suggesting that ALL email be kept for 5 years “across the board” without regard to content, IMHO, is doing a disservice to your readership.

  3. Sue says:

    Your list indicates that a non-profit needs to permamently retain employment applications of existing staff, and staff personnel records but then you indicate personnel records of terminated employees can be destroyed after 5 years. Would you please clarify?

  4. Adrian B. Bennett says:

    This is an indicative list of likely records that a nonprofit organization might decide to keep. There are no specific rules related to record keeping and retention that can be applied here.

  5. Adrian B. Bennett says:

    Hi agree with every word you say. This is an indicative record keeping policy.. just to provide a format for drafting the policy.

  6. Gregory Wallace says:

    Do (Texas) Non-Profits have to retain records in accordance with the Texas State Library and Archives Commission Local Library Schedules S-D and G-R, or any other Schedules.

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