Got any tips for keeping foundation records?

Most foundation files of any significance should be kept a minimum of 3 years. That can add up to a lot of paper! Here are filing and storage tips:

  • Give some thought to and take time setting up your filing system. Ultimately, you’ll waste less time and save yourself a lot of space.
  • A good rule generally is to have a separate, well-labeled file and location (even if it’s a cardboard box) for each type of paperwork so that it is easy to initially file, access when needed, and move to storage when not needed.
  • Have a set time each year to create new files and move old files to storage. For example, at the beginning of a new year, say, 2018, gather file folders of unfunded proposals for 2017 (if kept), and put them in a box clearly marked “Declined 2017 Proposals/Disposal Date January 2020.”
  • Only keep what you have to. For instance, grant proposals often have attachments included that were not required by you. Keep only what you require.
  • Consider accepting letters of inquiry, proposals, and so on 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.

If space is a major concern, it may be time to transition your paper files to electronic ones. This can be easily done by scanning the documents and placing the information on CDs, a hard drive, or in secure cloud storage. Again, you should have more than one copy before throwing out the paper copy. This can be time consuming, so contracting this task out may be the best solution.

The length of time you must keep each type of record is listed, as follows, by the main areas of foundation operations.

Founding papers and legal documents

Originals of these documents should be kept preferably in a secured, fireproof location off-site (and keep copies in your office too):

  • State sales tax exemption rulings: Permanently
  • Charter documents: Permanently
  • Amendments to your articles of incorporation: Permanently
  • All legal documents: Permanently

Board records

  • Minutes of board meetings: Permanently
  • Financial policies: Permanently
  • Board code of conduct: 3 years

Grantmaking records

  • Grant reports: Permanently
  • Grant records, including an annual financial record of grants, contributions correspondence, grantee Internal Revenue Service determination letters and verification, and matching gift records: 7 years
  • General grant correspondence, such as letters of inquiry and grant applications (even ones that were denied): 3 years

Accounting records

  • Tax returns with attachments: Permanently
  • Tax worksheets: 10 years
  • Accounting records, including 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: 7 years
  • Bank deposit slips and interim financial statements: 3 years
  • Paychecks: 3 years

Employment, office administration, and insurance records

  • Employment policies: Permanently
  • Benefits and salary information: Permanently
  • Employment records, including applications, personnel files, time reports, unemployment claims, withholding exemptions, workers’ compensation reports, and W-2 forms: 7 years
  • Workers’ compensation insurance policies: 7 years
  • Insurance policies, such as business owners’ package, crime coverage, coverage for directors and officers, pension plan and fiduciary liability, and umbrella coverage: 10 years
  • All insurance policy confirmations from insurance agent and auto insurance papers: 3 years
  • Real estate records: 10 years
  • Contracts, leases, and mortgages: 7 years
  • General correspondence: 3 years

Also see Keeping Good Records: Small Foundations’ Guide to Staying Organized.

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