Foundation Recordkeeping: A Quick Guide - Exponent Philanthropy
A post to Exponent Philanthropy's blog

Foundation Recordkeeping: A Quick Guide

Photo by Bernd Klutsch on Unsplash

Without a doubt, giving plenty of time and thought to your foundation’s recordkeeping system will pay off in the long run. In general, you should keep most foundation files of any significance for a minimum of 3 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.

Foundation Recordkeeping Tips

  • 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.
  • Consider accepting letters of inquiry, proposals, and other materials 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. For example, 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 must. For instance, grant proposals sometimes have attachments that you didn’t request.

What Documents to Keep (and for How Long)

Below is a list of the length of time you must keep each type of record by the main areas of foundation operations.

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

  • 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 (7 years)
  • Bank deposit slips and interim financial statements (3 years)
  • Paychecks (3 years)
  • Tax returns with attachments (permanently)
  • Tax worksheets (10 years)

Board Records

Grantmaking Records

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

Employment, Office Administration, and Insurance Records

  • All insurance policy confirmations from insurance agent and auto insurance papers (3 years)
  • Benefits and salary information (permanently)
  • Contracts, leases, and mortgages (7 years)
  • Employment policies (permanently)
  • Employment records, especially applications, personnel files, time reports, unemployment claims, withholding exemptions, workers’ compensation reports, and W-2 forms (7 years)
  • General correspondence (3 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)
  • Real estate records: Ten years
  • Workers’ compensation insurance policies (7 years)

    Ready To Learn More?

    Keeping Good Records: A Small Foundations’ Guide to Staying Organized
    If you haven’t yet established a system for keeping good records, now is the time. This primer explains what documents to keep and for how long, and then describes how to organize your documents by creating a records management system. Learn more »

    Subscribe to Blog via Email

    Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Leave a Comment

    Your email address will not be published. Required fields are marked *