Without a doubt, giving plenty of time and thought to your foundation recordkeeping system will pay off in the long run. In general, you should keep most foundation files of any significance for a minimum of three years. However, this can add up to a lot of paper!
For one thing, if space is a major concern, it’s probably time to transition your paper files to electronic ones. Admittedly, you should have more than one copy before throwing out the paper. Of course, this can be time consuming. Thus, contracting this task out may be the best solution.
Other foundation recordkeeping tips include:
- By and large, a good rule is to have a separate, well-labeled file and location for each type of paperwork. After that, it’s easy to initially file, access when needed, and move to storage when not.
- As shown above, consider accepting letters of inquiry, proposals, etc. online, and use that online source as your main storage. If doing so, it is important that you have a system to ensure regular backups because computers can crash.
- Have a set time each year to create new files and move old ones to storage. As an illustration, at the beginning of a new year, gather file folders of unfunded proposals for 2021 (if kept). Then, put them in a box clearly marked “Declined 2021 Proposals/Disposal Date January 2024.”
- Keep only what you have to. For instance, grant proposals sometimes have attachments that you didn’t request.
What documents to keep, and for how long:
Founding papers and legal documents
Most important, keep originals of these documents in a secured, fireproof location off-site. In addition, keep copies in your office:
- All legal documents: Permanently
- Amendments to your articles of incorporation: Permanently
- Charter documents: Permanently
- State sales tax exemption rulings: Permanently
- Accounting records, especially bank statements and reconciliations, checks, budget and expense reports, check requests and invoices, depreciation schedules, general ledger, general journal, board honorarium reports, investment reports, payroll taxes, and security brokerage slips: Seven years
- Bank deposit slips and interim financial statements: Three years
- Paychecks: Three years
- Tax returns with attachments: Permanently
- Tax worksheets: Ten years
- Board code of conduct: Three years
- Financial policies: Permanently
- Board meeting minutes: Permanently
- General grant correspondence, such as letters of inquiry and grant applications (even ones that were denied): Three years
- Grant records, particularly an annual financial record of grants, contributions correspondence, grantee Internal Revenue Service determination letters and verification, and matching gift records: Seven years
- Grant reports: Permanently
Employment, office administration, and insurance records
- All insurance policy confirmations from insurance agent and auto insurance papers: Three years
- Benefits and salary information: Permanently
- Contracts, leases, and mortgages: Seven years
- Employment policies: Permanently
- Employment records, especially applications, personnel files, time reports, unemployment claims, withholding exemptions, workers’ compensation reports, and W-2 forms: Seven years
- General correspondence: Three years
- Insurance policies, such as business owners’ package, crime coverage, coverage for directors and officers, pension plan and fiduciary liability, and umbrella coverage: Ten years
- Real estate records: Ten years
- Workers’ compensation insurance policies: Seven years
Ready to streamline your grantmaking at last?
Letting Go: The First Step to Greater Impact
September 22 & 29 | 2 – 4 p.m. ET
In this program, you’ll learn practical ways to re-focus and streamline your grantmaking processes to center learning, engagement, relationships and creativity in your work. Register now >>
Want even more on good foundation recordkeeping?
Keeping Good Records: A Small Foundations’ Guide to Staying Organized
Even if it takes a little time to set up and maintain a records management system, the benefits to your foundation are invaluable. In brief, this primer explains what documents to keep and for how long. It also describes how to organize your documents with a records management system. Check out the primer now >>