Scott Lowe goes over the most important things to keep in mind when managing records in small organizations.
I've spent most of my career in the world of the non-profit. In all, I spent five years working for government organizations, one year in the for-profit world and thirteen years in organizations that fall into the IRS' broad 501(c)(3) category. These kinds of organizations operate with a focus on mission under which the funding to the organization is directly applied to the mission and money is not divided up among shareholders.
Although many don't always equate these kinds of organizations with money, accountability or cutting edge technology, the reality is that these kinds of organizations live and die on their outcomes... which are driven through the strategic application of budgetary dollars raised from donors, spun off from endowments or through chargebacks to members.
Because the money provided to these organizations is a gift-at least from the perspective of the donor-there is a major need to be accountable for outcomes and that means demonstrating that money being spent is being put to good use.
Just as it is in the large for-profit world, too, small non-profits need to manage their records. For associations, that might mean maintaining an association management tool or ERP that tracks member activity or it may mean the development of an in-house system to keep track of goings on. And, just as it is in larger organizations, a non-profit often lives or dies by its data. If the data is lost or it's a particularly poor quality, the organization risks alienating its members or its donors and also risks the tax-exempt gifts from their members. And, because of the mission focus, there is added pressure to keep costs to a minimum.
First of all, when it comes to managing records in any organization, develop a records retention schedule and then stick to it. This schedule should define each type of record that needs to be stored and the duration of storage for each type. The document retention period may be stipulated by regulation or by reasonable need. It should further outline the disposition process that takes place once a document has expired. The retention document needs to include information regarding both physical and electronic records and should include information regarding how documents are to be backed up.
Moreover, it's important for the organization, no matter how small, to operate within the bounds sets forth in the records retention policy. Doing so will minimize the organizations exposure to litigation and damages resulting from improper records management.
Fortunately, nonprofits don't have to go it alone. There are a number of services available in the marketplace that can help these organizations handle what can be a complex undertaking. For example, one such service, DocuVantage, provides a recommended records retention schedule for free on their web site. So, even if you do plan to go it alone, don't overlook the resources that you might be able to find on vendor web sites.
Further, don't forget that, in some cases, even a non-governmental non-profit organization may be subject to a state's open records laws. This is heavily dependent on the state in which the non-profit operates and on the kind of activity that is being performed. There are numerous examples of this and it was a consideration in our record keeping in one of the non-profits at which I worked because the membership was made up of the fifty six state and territory attorneys general.
Here's an excerpt from a Wikipedia article with an example:
The Times of Trenton v. Lafayette Yard Community Development Corp.
In this case, the New Jersey Supreme Court unanimously ruled in 2005 that Lafayette Yard CDC, a private non-profit, was subject to the provisions of New Jersey's open records (OPRA) legislation because it issued city-backed bonds and the majority of its board was appointed by the city council of Trenton. The litigation arose because the board of Lafayette Yard CDC kicked a reporter for the Trenton newspaper out of a meeting on the grounds that, as a private non-profit, they were not subject to open records or open meetings laws.
In short, it's critical to understand the organization's requirements around record-keeping and to stay on the right side of open records laws. The fact that open records laws can be applied to some private non-profits makes it especially important to stick to records retention guidelines.