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Nonprofit document retention requirements โ€” understanding what merits retention

The Sarbanes-Oxley Act (SOX) is directed at improving corporate transparency and accountability. For nonprofits, key among the SOX provisions are document retention practices โ€” yet the law doesn't provide explicit document retention schedules. Still, you're not left to figure it out on your own.

Here's a quick summary of common recommendations from the Charities Review Council and other nonprofit-focused organizations. In some cases, state-specific sample document retention policies are available through the local state association of nonprofits.

Keep in mind, however, these are simply guidelines. Your organization may choose to keep certain documents permanently โ€” or on a schedule recommended by your finance or legal advisers.

Corporate records

Document Retention period

Annual reports to the secretary of state or attorney general

Permanent

Articles of incorporation

Permanent

Board meeting and board committee minutes

Permanent

Board policies and resolutions

Permanent

Bylaws

Permanent

Construction documents

Permanent

Fixed asset records

Permanent

IRS application for tax-exempt status (Form 1023)

Permanent

IRS determination letter

Permanent

State sales tax exemption letter

Permanent

Contracts

7 years after termination

General correspondence

3 years

Accounting and corporate tax records

Document Retention period
Annual audits and year-end financial statements Permanent
Depreciation schedules Permanent
IRS Form 990 tax returns Permanent
General ledgers 7 years
Business expense records 7 years
IRS Form 1099 7 years
Journal entries 7 years
Invoices 7 years
Sales records (books) 5 years
Petty cash vouchers 3 years
Cash receipts 3 years
Credit card receipts 3 years

Bank records

Document Retention period

Check registers

7 years

Bank deposit slips

7 years

Bank statement and reconciliation

7 years

Electronic fund transfer documents

7 years

Payroll and employment tax records

Document Retention period
State unemployment tax records Permanent
Payroll records Permanent
Garnishment records 7 years
Payroll tax returns 7 years
W-2 statements 7 years
Employment tax records At least 4 years after filing the year's 4th quarter taxes (or longer, if required by state law)

Human resource records

Document Retention period
Employment and termination agreements Permanent
Retirement and pension plan documents Permanent
Records relating to promotion, demotion or discharge 7 years after termination
Accident reports and workers' compensation records 5 years
Background checks, drug test results, driving records and employment verifications 5 years
Resumes, employment applications and related materials (including interview notes) for employees 4 years after termination
Resumes, employment applications and related materials (including interview notes) for applicants not hired 3 years
Timesheets, compensation history and job history 4 years after termination
Performance appraisal and disciplinary action records 4 years after termination
I-9 forms 3 years after hire date or 1 year after employment ends (whichever is later)

Donor and grant records

Document Retention period
Donor records and acknowledgment letters 7 years
Grant applications and contracts 7 years after expiration

Legal, insurance and safety records

Document Retention period
Appraisals Permanent
Copyright registrations Permanent
Environmental studies Permanent
Insurance policies Permanent
Real estate documents Permanent
Stock and bond records Permanent
Trademark registrations Permanent
Leases 7 years after expiration
OSHA documents 5 years
General contracts 3 years after expiration

When the retention period for any particular document has ended, be careful to erase, shred or otherwise destroy the document so that any confidential information can't be read or reconstructed.

This article draws on the expertise of Grace Davies, a Minneapolis-based attorney with special interest in product liability, medical malpractice and employment discrimination.

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Disclaimer

MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.

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References

Adelphi University: Document destruction and retention policy

National Council of Nonprofits: Document retention policies for nonprofits

U.S. Citizenship and Immigration Services: Retaining Form I-9 (2016)

References

Author

Librarian, freelance researcher and nonprofit enthusiast