March 6, 2024
Iowa native George Nissen built his first “tumbling device” in 1934 out of angle iron, canvas, and rubber springs. He perfected the contraption, renamed it the “trampoline,” after the Spanish word for springboard. On March 6, 1945, Nissen received a patent for the springy piece of equipment.
Nissen’s trampoline was used to train aviators in World War II and astronauts during the Space Age. Athletes still use it for cross-training and trampolining has become a competitive sport in itself.
The backyard trampoline with a safety net is as ubiquitous as the swing set and — even better — can be repurposed for other uses after the kids get tired of it. People have turned them into everything from chicken coops to greenhouses to sunshades.
You could say a Document Retention Policy is like a trampoline — it will always give you something good to fall back on. (Ouch!)
Seriously, though, nonprofits need a good Document Retention Policy to ensure all information related to their business operations, employees, and finances is managed in a systematic and well-organized manner.
A well-drafted Document Retention Policy sets guidelines for how long particular records and documents — both electronic and paper — must be kept and how and when they should be destroyed. It serves two primary functions. First, making sure your nonprofit meets federal and state legal and regulatory requirements. Second, and just as important, it protects the reputation, privacy, and interests of you and your employees.
It should include a description of each kind of document the Policy covers and the retention time for each, because these can vary. For example, bank statements should be kept for at least three (3) years. On the other hand, the IRS requires that year-end financial statements be kept permanently, while the minimum retention period for general correspondence is two (2) years.
The Policy must also provide detailed information about how to label and store paper documents and electronic files. There should be guidelines for backing up electronic files, as well as a secure method for purging this information.
Following the guidelines of a Document Retention Policy might seem rather time-consuming and nit-picky, but in reality it will improve the efficiency of your record management while at the same increasing the security of the sensitive information in your files.
If you’re dedicated to elevating your nonprofit to new heights, creating, implementing, and observing a Document Retention Policy is essential. (Double ouch!)
If your organization is interested in adopting (or revisiting!) a Document Retention Policy, please don’t hesitate to reach out to Gordon Fischer Law Firm.
For the month of March, I’m offering a special to Iowa nonprofits. I will draft, revise, and edit the ten (10) policies expressly referenced by the IRS on Form 990 (which of course includes a Document Retention Policy) specific to the unique mission of your nonprofit.
My email is:
gordon@gordonfischerlawfirm.com
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Iowa Nonprofits Need to Jump Into Adopting and Implementing a Flexible-But-Firm Document Retention Policy
