DOCUMENT RETENTION AND DESTRUCTION POLICY [ORGANIZATION NAME] A [STATE] Nonprofit Corporation EIN: [XX-XXXXXXX] Adopted by the [Board of Directors / Vestry / Session / Board of Trustees] on [Month Day, Year] =============================================================================== HOW TO USE THIS TEMPLATE - This is a general document retention AND destruction policy for a nonprofit or church. It does two jobs: it sets how long each kind of record is kept, and it sets when records are destroyed once that period ends. - Fill in every [BRACKETED] placeholder with your organization's details. - The IRS asks whether an organization has a document retention and destruction policy on the Form 1023 application for 501(c)(3) recognition. A church is a 501(c)(3), so this policy applies to a congregation as well. - The retention periods below are a REASONABLE, GENERAL starting point. Exact periods vary by state, by record type, and sometimes by a grant or contract. Confirm your schedule with a qualified accountant or attorney before adopting it (see footer). Do not treat any period here as a precise legal requirement. - Decide WHO administers this policy (Section 6) before you adopt it — a schedule with no owner does not get followed. =============================================================================== SECTION 1 — PURPOSE The purpose of this policy is to ensure that [ORGANIZATION NAME] (the "Organization") keeps the records it needs and destroys the records it no longer needs, on a consistent and documented schedule. This policy exists to: a. ensure records required for audits, the Form 990 (where applicable), tax filings, grants, and legal needs still exist when they are needed; b. ensure records are destroyed routinely, consistently, and only after their retention period has passed, so that disposal is ordinary housekeeping rather than a selective act; c. suspend all destruction immediately when litigation, a government investigation, or an audit is pending or reasonably anticipated (see Section 4 — Litigation Hold); d. support the Organization's tax-exempt status and good governance. This policy applies to records in every form, including paper, email, and other electronic files. SECTION 2 — RETENTION SCHEDULE The Organization retains the following records for at least the periods shown. Where state law, a grant agreement, or a contract requires a LONGER period, the longer period controls. KEEP PERMANENTLY (corporate and governance records): - Articles of incorporation and all amendments - Bylaws and all amendments - IRS determination (tax-exemption) letter and exemption application - Board and committee meeting minutes - Form 990 and other annual information/tax returns - Audit reports and year-end financial statements - Key contracts, deeds, titles, leases, and insurance policies (keep at least while in force; keep permanently if [ORGANIZATION NAME] determines they have lasting legal value) - [Add any record your state or denomination requires kept permanently] KEEP APPROXIMATELY [7] YEARS (financial and supporting records): - General ledger and accounting records - Bank statements and reconciliations - Cancelled checks (keep permanently if for an important payment) - Donation and contribution records / giving statements - Payroll records and payroll tax filings - Paid invoices and expense documentation (receipts, mileage logs) - Grant records (retain [7] years after the grant closes, OR per the grant's own terms if longer) - Employee records (retain [7] years after [separation], or per state law) - [Add other supporting financial records here] KEEP SHORT-TERM: - Routine correspondence, internal memos, and general emails: [1-3] years - Drafts and superseded working copies: keep until final, then discard - [Add other routine records here] [Adjust every period above to match your state's requirements and any grant or contract terms. Confirm with a professional.] SECTION 3 — DESTRUCTION OF RECORDS Once a record has reached the end of its retention period under Section 2, and is not subject to a litigation hold under Section 4, the Organization will destroy it on a regular, scheduled basis: a. Paper records will be shredded or otherwise destroyed so they cannot be reconstructed. b. Electronic records will be deleted, and the Organization will take reasonable steps to remove them from backups over time. c. Destruction is carried out on a [annual / semi-annual] schedule by, or under the supervision of, the Records Administrator named in Section 6. d. The Organization will keep a brief log of what categories of records were destroyed and when, so that destruction can be shown to be routine. Destruction is applied consistently to every record of a given type. No one may single out an individual record for early destruction outside this schedule. SECTION 4 — LITIGATION HOLD (EXCEPTION TO DESTRUCTION) This is the exception that overrides the schedule. If [ORGANIZATION NAME] learns of, or reasonably anticipates, any litigation, government investigation, audit, subpoena, or similar proceeding, it must IMMEDIATELY suspend the destruction of every record that could relate to the matter — including records that would otherwise be due for routine disposal under Sections 2 and 3. a. The Records Administrator, in consultation with [the Board and/or legal counsel], will identify the records covered by the hold and notify everyone who holds them to preserve them. b. No covered record may be altered, deleted, or destroyed while the hold is in effect. c. The hold remains in place until [the Board / legal counsel] determines in writing that it may be lifted. Destroying records after a dispute is foreseeable can be treated as obstruction or spoliation of evidence, with serious legal consequences. When in doubt, preserve the record and ask counsel. SECTION 5 — ELECTRONIC RECORDS AND BACKUPS Electronic records (email, accounting files, scanned documents) are subject to the same retention periods as their paper equivalents. The Organization will: a. store electronic records so they remain readable and retrievable for their full retention period; b. maintain reasonable backups; and c. apply litigation holds to electronic records and backups the same way it applies them to paper. SECTION 6 — WHO ADMINISTERS THIS POLICY a. The [Board of Directors / Vestry / Session] OWNS this policy. It adopts the policy and reviews it at least [annually]. b. The day-to-day administrator is the [Executive Director / Treasurer / Records Officer / Church Administrator] (the "Records Administrator"). The Records Administrator is responsible for: - keeping records for their full retention period, - carrying out scheduled destruction, - implementing and lifting litigation holds, and - reporting to the [Board] on the policy's operation. c. Questions about whether a specific record should be kept or destroyed are directed to the Records Administrator, who may consult [legal counsel]. SECTION 7 — ADOPTION This Document Retention and Destruction Policy was adopted by the [Board of Directors / Vestry / Session / Board of Trustees] of [ORGANIZATION NAME] on [Month Day, Year], and supersedes any prior retention policy. _______________________________ _______________________________ [Name], [Board Chair / President] [Name], [Secretary] Date: ____________________ Date: ____________________ =============================================================================== NOTES FOR CHURCHES - A church is a 501(c)(3). The body that adopts this policy may be called a vestry, session, board of elders, or board of trustees rather than a board of directors — the legal role is the same. - Most churches do NOT file a Form 990, but the IRS still expects a church to keep records that substantiate its income and expenses (see IRS Publication 1828, Tax Guide for Churches and Religious Organizations). Keep your giving records, bank statements, payroll, and expense documentation for the period in Section 2. - Add church-specific records to the schedule as needed, for example: membership and baptism rolls, ordination and clergy-credential records, benevolence-fund documentation, and designated/restricted-gift letters from donors (keep the donor-restriction letter for as long as the restricted fund exists). - Clergy payroll and housing-allowance records belong in the ~[7]-year financial bucket; the board resolution that sets the housing allowance lives in the board minutes, which are kept permanently. =============================================================================== ------------------------------------------------------------------------------- This is a general template, not legal advice. Retention periods vary by state and by record type, and may be changed by a grant or contract. Have this policy reviewed and adjusted by a qualified accountant or attorney in your state before your board adopts it. -------------------------------------------------------------------------------