Donor Records Retention Policies

We found few articles online that provide guidance on recordkeeping for donor relationships. Most online resources provide guidance for general recordkeeping for 501(c)3s but not for donor recordkeeping specifically. We provide links at the bottom of this page for these resources.

Upon finding little information online, we consulted with industry professionals on what records nonprofits should retain for their donor relationships and for how long. Here is the result of our findings:

Paper Records
- Digital records are increasingly accepted as valid, but it’s a good idea to retain paper originals of some documents seven years.  In the case of a multi-year pledge, I’d recommend seven years after the pledge is paid in full.  
- The documents an organization should retain are any having to do with making and substantiating a gift.  (Pledge forms, checks, acknowledgements, reminders.)  
- Documents relating to stewardship are not essential to the substantiation of a gift for the donor.  
- The organization may wish to digitize some paper records for more long-term retention. 
- The process for destruction of records needs to be stated in policy so that donor confidentiality and security is honored. 
 
Digital Records
While we have more space in the digital world, it may be limited for some organizations.  There is sometimes a maximum number of records that a system can house, so it’s good practice to have procedures for regularly maintaining digital records.
- Creating a hierarchy of records - and developing retention guidelines accordingly
- Non-donor prospects these records can quickly grow in certain institutions, and there need to be practical guidelines for managing and retaining them.  
For example, a school may enter all alumni, parents, or grandparents as prospects, but there is a point at which it becomes clear that the prospect will not be a donor.  
- One-time donors - (for example, memorial donations)
- Lapsed donors
- Current donors - obviously, one should never delete the record of a current donor.  But, all donors become inactive at some time. (Through relocation, age, death, etc.)  
The amount of time that records are kept will depend upon the above…..and upon the organization.  For example, a school may want to retain records for the practical lifetime of its alumni so that they can reach out for reunions, planned gifts, etc. 
- Archiving records - Assuming that the database has limited space, the need to archive some records
- Phasing out records.  Depending upon the development plan, there may be merit in moving records

Professional accountants can also be helpful with tailoring a records retention policy for your organization.

It is common for organizations to retain both physical and digital files. I think a Cloud platform is a good choice for saving records however to be completely safe from loss, paper copies should be kept as a backup. Also, a Cloud platform should have a cybersecurity policy in place to prevent theft of donor information.

It is most common for organizations to retain records for seven years (not including some higher level documents which must be retained permanently). See links below for a list of permanent documents.

Center for Nonprofit Excellence:

https://www.centerfornonprofitexcellence.org/news/record-keeping-right-way/2015-6-19

Council of Nonprofits:

https://www.councilofnonprofits.org/tools-resources/document-retention-policies-nonprofits

AFP Global:

https://afpglobal.org/chapter-record-retention-guidelines

https://afpglobal.org/sites/default/files/attachments/2018-10/DonorBillofRights.pdf

https://afpglobal.org/sites/default/files/attachments/2019-03/CodeofEthics.pdf

Other:

https://www.missionbox.com/article/351/document-retention-for-us-nonprofits-a-simple-guide

https://www.smartfile.com/blog/nonprofit-document-retention-policy/

Of course, the IRS will have guidance on this topic as well, especially with regards to tax compliance.

IRS Form 990 instructions

https://www.irs.gov/pub/irs-pdf/p4221pc.pdf (Private Charity)

https://www.irs.gov/pub/irs-pdf/p4221pf.pdf (Private Foundation)

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