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 |
