Managing the documents that are a part of your nonprofit organization can be daunting, particularly for nonprofits that have been around awhile! With advancing technology that allows us to digitize and store documents electronically, the need for keeping paper copies is declining a bit—and both ways of maintaining documents should be addressed in a policy.
Your document maintenance policy should consider which documents could be maintained electronically (and in what format and where will they be securely stored) and which should be kept in paper format and which could/should be kept in both formats.
There are many things to consider when developing a strong documents management policy. These include: requirements of funding sources relating to records; government requirements for privacy, retention and destroying records; records of minor children; data reports, historical documents, etc.
Spend thoughtful time with your board and staff thinking through the documents of your organization and come up with a plan for managing your documents. This plan should address how and where you will secure files, especially those nonprofits with files containing personal information on clients. The plan should also address when and how you will destroy documents.
Many funding sources ask about this important document, which makes having a robust document management policy (with retention information) beneficial for your nonprofit. And it is certainly a nonprofit best practice.
Thinking about and dealing with documents, including developing a policy for document management, is frequently placed on the back burner at many nonprofits. Leadership staff should be fully cognizant of document requirements of funders, regulatory agencies and laws. Your document management policy should address these requirements and be revised as necessary.
The Sarbanes-Oxley Act of 2002 provided guidance on several topics relating to nonprofits, including document retention and destruction. An excellent overview of the Act, including the provision for the retention of documents, can be found at Sarbanes-Oxley Act.
Like many other nonprofit policies, there are numerous resources and samples of document management policies available online. Check out these two from the NH Center for Nonprofits and Blue Avocado.