When or Do I Get to Throw It Away??? Document Destruction The Sarbanes-Oxley Act addresses the destruction of business records and documents and turns intentional document destruction into a process that must be carefully monitored. Nonprofit organizations should have a written, mandatory document retention and periodic destruction policy. Policies such as this will eliminate accidental or innocent destruction. In addition, it is important for administrative personnel to know the length of time records should be retained to be in compliance. The following table provides the minimum requirements. This information is provided as guidance in determining your organization’s document retention policy. Type of Document Minimum Requirement Accounts payable ledgers and schedules 7 years Audit reports Permanently Bank Reconciliations 2 years Bank statements 3 years Checks (for important payments and purchases) Permanently Contracts, mortgages, notes and leases (expired) 7 years Contracts (still in effect) Permanently Correspondence (general) 2 years Correspondence (legal and important matters) Permanently Correspondence (with customers and vendors) 2 years Deeds, mortgages, and bills of sale Permanently Depreciation Schedules Permanently Duplicate deposit slips 2 years Employment applications 3 years Expense Analyses/expense distribution schedules 7 years Year End Financial Statements Permanently Insurance Policies (expired) 3 years Insurance records, current accident reports, claims, policies, etc. Permanently Internal audit reports 3 years Inventories of products, materials, and supplies 7 years Invoices (to customers, from vendors) 7 years Minute books, bylaws and charter Permanently Patents and related Papers Permanently Payroll records and summaries 7 years Personnel files (terminated employees) 7 years Retirement and pension records Permanently Tax returns and worksheets Permanently Timesheets 7 years Trademark registrations and copyrights Permanently Withholding tax statements 7 years ©2004 National Council of Nonprofit Associations, www.ncna.org May be duplicated for non-commercial use, with attribution, by charitable organizations. The National Council of Nonprofit Associations (NCNA) is the network of state and regional nonprofit associations serving over 22,000 members in 46 states and the District of Columbia. NCNA links local organizations to a national audience through state associations and helps small and mid-sized nonprofits: manage and lead more effectively; collaborate and exchange solutions; save money through group buying opportunities; engage in critical policy issues affecting the sector; and achieve greater impact in their communities.
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GIFT ACCEPTANCE POLICIES
By Larry C. Howlett CPA The following policies intend to provide guidance to a charity in accepting gifts in setting standards in evaluating various kinds of gifts. The types of gifts, the limitation/restrictions placed on the gifts and the charity’s administration of the gifts should be considered in accepting gifts. The members of the board of directors, officers and staff should determine how these points apply to the charity, make changes as needed and operate within these guidelines to best deal with donors and protect the charity. Gifts should only be accepted if the donor intends to benefit the charity and not seek personal financial gain from the gift. Gift acceptance policies may be used to preserve relationships with donors, a valuable asset of a charity. Established written policies provide a means for the contact person of the charity to defect the rejection of an offered gift on the policy, not a personal choice. The donor may observe the charity is professional in its operations and maintains a high level of integrity. A gift acceptance policy provides a means of consistency and communication with donors. The mission statement should be stated to remind everyone of the purposes of gifts must conform to the purposes of the charity. The charity should primarily only accept unrestricted gifts so the donated items may be used as the organization wishes for its purposes. Donor imposed restrictions should conform to the mission of the charity. One of the recognized restrictions may be endowment for board established purposes. Restrictions that are beyond the mission of the donor or for the private benefit of the donor should be declined. Donors must retain no control over the gifts. Any offers of gifts, where the donors retain any degree of control should be rejected. The organization must accept only gifts when they have free and unencumbered control to the gifts. In evaluating if the charity should accept real estate gifts, it must request the donor secures an environmental clearance of the property. The organization should also consider if it can manage the property or dispose of it properly if it chooses. |
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