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SAMPLE DOCUMENT RETENTION AND DESTRUCTION POLICY
AS OF DECEMBER 1, 2009

NOTE ON THE SCOPE OF THIS MATERIAL

This material is designed to provide general guidance about an aspect of nonprofit corporate governance in the specific and limited context of the governance questions contained in the new IRS Form 990 (published by the IRS in 2008 and applicable to 990 filers based on a 2009-2011 filing year phase-in period depending on the size of the nonprofit). It is intended to provide some general guidance on the establishment of processes and/or policies to address a specific governance question in the Form. The subject matter of that question implicates a broad array of legal and practical issues ranging far beyond the immediate subject matter of the question itself. This material may address some of those issues but does NOT attempt to review them comprehensively and is NOT intended to be relied on for guidance on how they should be addressed in any specific situation. Whether or not a nonprofit organization adopts a specific governance process or policy (or modifies an existing one), either in response to the disclosure requirements of the new IRS Form 990 or to change its governance practices for other reasons is a matter to be carefully considered by that organization, with input from its board and advisors and evaluation of its specific circumstances. The IRS has explicitly stated that adoption of the policies and practices about which the new Form 990 asks is not mandatory, although the IRS has also indicated that it attaches significance to the manner in which all tax-exempt nonprofit organizations govern themselves. These sample policies are not intended to suggest that the policy is appropriate for every nonprofit organization nor that, if a policy on that topic is determined to be appropriate, the formulations in the samples necessarily fit the needs of an individual nonprofit organization. A customized approach, with outside professional advice, is recommended. Accordingly, this material is intended as general information for legal practitioners advising nonprofit organizations as to their governance and does not constitute legal advice for any particular nonprofit organization. For more information, see the related Form 990 Policy Series Memorandum at: http://www.publiccounsel.org/tools/assets/files/DocMemo.pdf. Although the subject matter of this material may have relevance to nonprofit organizations that are not required to file informational tax returns with the IRS or are permitted to file on an IRS form other than Form 990, the focus of this material is 990 filers. While this material is meant to apply to Form 990 filers who are exempt under Section 501(c) of the Internal Revenue Code, certain portions of this material may be applicable only to Section 501(c)(3) organizations. In addition, although this material may be of assistance with respect to nonprofit organizations that are not subject to oversight under California law, there may be portions of this material that are relevant only to nonprofits organized under, or (by reason of their California-related activities) otherwise subject to, California law. The reader has permission to copy, modify and otherwise use this policy for the reader's or his or her client's use. All other rights are reserved by the copyright holder.

DOCUMENT RETENTION AND DESTRUCTION POLICY

1. Policy and Purposes

This Policy represents the policy of ____________ (the “organization”) with respect to the retention and destruction of documents and other records, both in hard copy and electronic media (which may merely be referred to as “documents” in this Policy). Purposes of the Policy include (a) retention and maintenance of documents necessary for the proper functioning of the organization as well as to comply with applicable legal requirements; (b) destruction of documents which no longer need to be retained; and (c) guidance for the Board of Directors, officers, staff and other constituencies with respect to their responsibilities concerning document retention and destruction. Notwithstanding the foregoing, the organization reserves the right to revise or revoke this Policy at any time.

2. Administration

2.1 Responsibilities of the Administrator. The organization’s _________ [CEO, President, Executive Vice President, Vice President for___, etc.] shall be the administrator (“Administrator”) in charge of the administration of this Policy. The Administrator’s responsibilities shall include supervising and coordinating the retention and destruction of documents pursuant to this Policy and particularly the Document Retention Schedule included below. The Administrator shall also be responsible for documenting the actions taken to maintain and/or destroy organization documents and retaining such documentation. The Administrator may also modify the Document Retention Schedule from time to time as necessary to comply with law and/or to include additional or revised document categories as may be appropriate to reflect organizational policies and procedures. The Administrator is also authorized to periodically review this Policy and Policy compliance with legal counsel and to report to the Board of Directors as to compliance. The Administrator may also appoint one or more assistants to assist in carrying out the Administrator’s responsibilities, with the Administrator, however, retaining ultimate responsibility for administration of this Policy.

2.2 Responsibilities of Constituencies. This Policy also relates to the responsibilities of board members, staff, volunteers and outsiders with respect to maintaining and documenting the storage and destruction of the organization’s documents. The Administrator shall report to the Board of Directors (the board members acting as a body), which maintains the ultimate direction of management. The organization’s staff shall be familiar with this Policy, shall act in accordance therewith, and shall assist the Administrator, as requested, in implementing it. The responsibility of volunteers with respect to this Policy shall be to produce specifically identified documents upon request of management, if the volunteer still retains such documents. In that regard, after each project in which a volunteer has been involved, or each term which the volunteer has served, it shall be the responsibility of the Administrator to confirm whatever types of documents the volunteer retained and to request any such documents which the Administrator feels will be necessary for retention by the organization (not by the volunteer). Outsiders may include vendors or other service providers. Depending upon the sensitivity of the documents involved with the particular outsider relationship, the organization, through the Administrator, shall share this Policy with the outsider, requesting compliance. In particular instances, the Administrator may require that the contract with the outsider specify the particular responsibilities of the outsider with respect to this Policy.

3. Suspension of Document Destruction; Compliance. The organization becomes subject to a duty to preserve (or halt the destruction of) documents once litigation, an audit or a government investigation is reasonably anticipated. Further, federal law imposes criminal liability (with fines and/or imprisonment for not more than 20 years) upon whomever “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States … or in relation to or contemplation of any such matter or case.” Therefore, if the Administrator becomes aware that litigation, a governmental audit or a government investigation has been instituted, or is reasonably anticipated or contemplated, the Administrator shall immediately order a halt to all document destruction under this Policy, communicating the order to all affected constituencies in writing. The Administrator may thereafter amend or rescind the order only after conferring with legal counsel. If any board member or staff member becomes aware that litigation, a governmental audit or a government investigation has been instituted, or is reasonably anticipated or contemplated, with respect to the organization, and they are not sure whether the Administrator is aware of it, they shall make the Administrator aware of it. Failure to comply with this Policy, including, particularly, disobeying any destruction halt order, could result in possible civil or criminal sanctions. In addition, for staff, it could lead to disciplinary action including possible termination.

4. Electronic Documents; Document Integrity. Documents in electronic format shall be maintained just as hard copy or paper documents are, in accordance with the Document Retention Schedule. Due to the fact that the integrity of electronic documents, whether with respect to the ease of alteration or deletion, or otherwise, may come into question, the Administrator shall attempt to establish standards for document integrity, including guidelines for handling electronic files, backup procedures, archiving of documents, and regular checkups of the reliability of the system; provided, that such standards shall only be implemented to the extent that they are reasonably attainable considering the resources and other priorities of the organization.

5. Privacy. It shall be the responsibility of the Administrator, after consultation with counsel, to determine how privacy laws will apply to the organization’s documents from and with respect to employees and other constituencies; to establish reasonable procedures for compliance with such privacy laws; and to allow for their audit and review on a regular basis.

6. Emergency Planning. Documents shall be stored in a safe and accessible manner. Documents which are necessary for the continued operation of the organization in the case of an emergency shall be regularly duplicated or backed up and maintained in an off-site location. The Administrator shall develop reasonable procedures for document retention in the case of an emergency.

7. Document Creation and Generation. The Administrator shall discuss with staff the ways in which documents are created or generated. With respect to each employee or organizational function, the Administrator shall attempt to determine whether documents are created which can be easily segregated from others, so that, when it comes time to destroy (or retain) those documents, they can be easily culled from the others for disposition. For example, on an employee-by-employee basis, are e-mails and other documents of a significantly non-sensitive nature so that they might be deleted, even in the face of a litigation hold with respect to other, more sensitive, documents? This dialogue may help in achieving a major purpose of the Policy -- to conserve resources -- by identifying document streams in a way that will allow the Policy to routinely provide for destruction of documents. Ideally, the organization will create and archive documents in a way that can readily identify and destroy documents with similar expirations.

8. Document Retention Schedule. [Periods are suggested but are not necessarily a substitute for counsel’s own research and determination as to appropriate periods.]

Document Type Retention Period

Accounting and Finance

Accounts Payable 7 years
Accounts Receivable 7 years
Annual Financial Statements and Audit Reports Permanent
Bank Statements, Reconciliations & Deposit Slips 7 years
Canceled Checks – routine 7 years
Canceled Checks – special, such as loan repayment Permanent
Credit Card Receipts 3 years
Employee/Business Expense Reports/Documents 7 years
General Ledger Permanent
Interim Financial Statements 7 years

Contributions/Gifts/Grants

Contribution Records Permanent
Documents Evidencing Terms of Gifts Permanent
Grant Records 7 yrs after end of grant period

Corporate and Exemption

Articles of Incorporation and Amendments Permanent
Bylaws and Amendments Permanent
Minute Books, including Board & Committee Minutes Permanent
Annual Reports to Attorney General & Secretary of State Permanent
Other Corporate Filings Permanent
IRS Exemption Application (Form 1023 or 1024) Permanent
IRS Exemption Determination Letter Permanent
State Exemption Application (if applicable) Permanent
State Exemption Determination Letter (if applicable) Permanent
Licenses and Permits Permanent
Employer Identification (EIN) Designation Permanent

Correspondence and Internal Memoranda

Hard copy correspondence and internal memoranda relating to a particular document otherwise addressed in this Schedule should be retained for the same period as the document to which they relate.

Hard copy correspondence and internal memoranda relating to routine matters with no lasting significance Two years

Correspondence and internal memoranda important to the organization or having lasting significance Permanent, subject to review

Electronic Mail (E-mail) to or from the organization

Electronic mail (e-mails) relating to a particular document otherwise addressed in this Schedule should be retained for the same period as the document to which they relate, but may be retained in hard copy form with the document to which they relate.

E-mails considered important to the organization or of lasting significance should be printed and stored in a central repository . Permanent, subject to review

E-mails not included in either of the above categories 12 months

Electronically Stored Documents

Electronically stored documents (e.g., in pdf, text or other electronic format) comprising or relating to a particular document otherwise addressed in this Schedule should be retained for the same period as the document which they comprise or to which they relate, but may be retained in hard copy form (unless the electronic aspect is of significance).

Electronically stored documents considered important to the organization or of lasting significance should be printed and stored in a central repository (unless the electronic aspect is of significance). Permanent, subject to review

Electronically stored documents not included in either of the above categories Two years

Employment, Personnel and Pension

Personnel Records 10 yrs after employment ends
Employee contracts 10 yrs after termination
Retirement and pension records Permanent

Insurance

Property, D&O, Workers’ Compensation and
General Liability Insurance Policies Permanent
Insurance Claims Records Permanent

Legal and Contracts

Contracts, related correspondence and other supporting documentation 10 yrs after termination
Legal correspondence Permanent

Management and Miscellaneous

Strategic Plans 7 years after expiration
Disaster Recovery Plan 7 years after replacement
Policies and Procedures Manual Current version with revision history

Property – Real, Personal and Intellectual

Property deeds and purchase/sale agreements Permanent
Property Tax Permanent
Real Property Leases Permanent
Personal Property Leases 10 years after termination
Trademarks, Copyrights and Patents Permanent

Tax

Tax exemption documents & correspondence Permanent
IRS Rulings Permanent
Annual information returns – federal & state Permanent
Tax returns Permanent

*********

Document Retention & Destruction Final 12-1-09…...

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...effective purchasing power plus relevant export markets • Central banking system and monetary policy – controls of the commercial banks, the ability and willingness to control the money supply, the effectiveness of government policies regarding price stability, commercial bank reserves, discounting, credit controls and similar factors • Fiscal policy – general policies concerning government expenditures, their timing and their impact • Economic stability – the vulnerability of the economy to economic fluctuations of depression and boom, price stability and overall economic growth stability • Organization of capital markets – their existence, integrity, effectiveness and total impact • Factor endowment – relative supply of capital and land; size and general health of the work force • Social ahead capital – availability and quality of power supplies, water, communication systems, transportation, public warehousing, etc. • Competition – number of competitors and degree of competition Administrative and political factors • Relevant legal rules of the game – quality, efficiency, and effectiveness of legal structure relevant to business • Defense policy – impact of defense policy on industrial enterprise in terms of trading and purchasing policies • Foreign policy – impact of policy on industrial enterprise in terms of trading restrictions • Political organization......

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Doc Holiday

...bDoc Holliday 1 Doc Holliday Doc Holliday Holliday's dental school graduation photo, age 20, 1872 Born John Henry HollidayAugust 14, 1851Griffin, Georgia, U.S. Died November 8, 1887 (aged 36)Glenwood Springs, Colorado, U.S. Education Graduated from Pennsylvania College of Dental Surgery in 1872 at age 20 Occupation Dentist, Professional gambler, Gunfighter Known for Arizona War *Gunfight at the O.K. Corral *Earp Vendetta Ride John Henry "Doc" Holliday (August 14, 1851 – November 8, 1887) was an American gambler, gunfighter and dentist of the American Old West, who is usually remembered for his friendship with Wyatt Earp and his involvement in the Gunfight at the O.K. Corral. Early life and education "Doc" Holliday was born in Griffin, Georgia, to Henry Burroughs Holliday and Alice Jane Holliday (née McKey).[1] His father served in the Mexican–American War and the Civil War.[2] His family baptized him at the First Presbyterian Church in 1852.[3] In 1864 his family moved to Valdosta, Georgia.[3] Holliday's mother died of tuberculosis on September 16, 1866, when he was 15 years old.[1] Three months later his father married Rachel Martin. While in Valdosta, he attended the Valdosta Institute,[3] where he received a strong classical secondary education in rhetoric, grammar, mathematics, history, and languages – principally Latin, but also French and some Ancient Greek.[3] Autographed photo of Holliday taken in 1879 in......

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Policy

...THE CASE OF THE PRICING PREDICAMENT Cost-cutting customers. Hungry Foreign rivals. Should Standard Machine Lowerits bid? By MARY KARR As soon a Scott Palmer’s secretary told him that Joanne Braker form Occidental Aerospace was on the phone, he knew he was in for a long day. Inheriting the Occidental account had helped him earn top sales commissions last year, his first at Standard Machine Corporation. But a month ago, Joanne informed Scott of the purchasing department’s new, more aggressive competitive bid policy, and said it would apply to the acquisition of a computerized milling machine for Occidental’s new training center. Scott nevertheless submitted his $429,000 proposal with great confidence and even boasted to his regional sales manager that the deal was “in the bag”. After two weeks of unreturned phone calls, however, Scott got the feeling his confidence had been sorely misplaced. “Hi, Joanne, Long time, no hear. What’s up?” Joanne got right to the point. “Scott, I’ve got a $22,000 problem you can solve”. “What do you mean?” “You know we have to look hard at a number of different vendors on purchases of this size. And your bid is well above the competition’s. Kakuchi came in under $390,000, and Akita Limited at a little over 400K”. She waited, and Scott waited back, not wanting to show his anxiousness. “The way I count it,” she finally continued, “You’re $22,000 too high, and I just can’t sell that here”. “Well, Joanne,......

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