It is a recommended for nonprofits to adopt a document retention policy.

The Sarbanes-Oxley Act of 2002 was bought into enactment after numerous corporate financial scandals. There are two main aspects of the Act that apply to nonprofits: (1) restrictions on destroying, falsifying, or otherwise modifying records to obstruct a federal proceeding or investigation; and (2) restrictions on retaliating against certain whistleblowers; hence a whistleblower policy is recommended as well.

A document retention policy generally sets out the length of time certain organizational physical and electronic documents must or should be retained, held in organizational files, and the manner of disposal of such documents. The adoption of this type of policy serves to provide notice to employees and the board of the types of documents to be retained and for how long. It also helps guard against preemptive destruction or inappropriate disposal ahead of an investigation.

Form 990 Disclosure Requirements
Also the IRS Form 990 nonprofit info return, Part VI, Section B, includes the following:
Question 14: Does the organization have a written document retention and destruction policy?

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