How Long Should I Keep Nonprofit and Not-for-Profit Records?
This question is often a concern that is mistakenly placed on the back burner by nonprofits. However, keeping documents for the proper length of time is crucial when it comes to maintaining regulatory compliance. Many companies keep all records to simply have them, “just in case;” but this logic can backfire on these organizations and end up causing a lawsuit or worse.
Applicable to nonprofits, the Sarbanes-Oxley Act of 2002 closes many of the loopholes, for all enterprises, for-profit and not-for-profit, relating to document destruction, audit compliance and whistle-blower protection. A very good overview of the Act including the provision for the retention of documents is “Nonprofits and Sarbanes-Oxley”.
It is recommended that:
- "a nonprofit organization should have a written, mandatory document retention and periodic destruction policy. Such a policy also helps limit accidental or innocent destruction.
- The document retention policy should include guidelines for handling electronic files and voicemail. Electronic documents and voicemail messages have the same status as paper files in litigation-related cases.
- The policy should also cover back-up procedures, archiving of documents, and regular check-ups of the reliability of the system. If an official investigation is underway or even suspected, nonprofit management must stop any document purging in order to avoid criminal obstruction charges."
The nationally known, nonprofit attorney, Tom Silk, created a Document Retention Policy* on a pro bono basis defining the required document retention periods for nonprofits so that they may become more informed on document management and document retention regulatory standards. The policy emphasizes that disposing documents when the retention period is expired is necessary for nonprofits to avoid unnecessary fines as well as storage expenses.
Ideally nonprofits can automate the retention scheduling and ensure compliance using technology tools that are designed to capture, store and manage the documents and their retention schedules. View the recommended retention period schedule and notes providing further information.