According to the 2025 State of the Nonprofit Sector Survey, high costs are among the top challenges modern nonprofit organizations face. Therefore, the rising costs of potential data breaches are something they cannot afford. That’s why the solution for a secure and effective document management is of paramount importance for them.
This article discusses the reasons why proper document management is essential for such organizations and explains how solutions like board portals can improve document management for nonprofits.
What is document management for nonprofits?
Document management for nonprofits is the process of organizing, storing, securing, and accessing key documents in a way that supports the organization’s daily operations and long-term goals.
It’s typically about using dedicated document management systems (DMS), often cloud-based document management software, which helps to keep important records safe, easy to find, and only available to the right people.
Nonprofits deal with a wide range of documents that require proper management, such as:
- Donor records
- Financial documents
- Volunteer agreements
- Grant applications
- Tax-exempt status certificates
- Tax invoices
- Board meeting materials
These documents often contain personally identifiable information and must be stored with care using encryption tools and access restrictions. This is what reliable document management solutions do.
The most common choice for file management for nonprofit boards is a board portal. It’s a centralized platform for managing sensitive information like meeting minutes, board resolutions, and compliance-related documents. This helps nonprofits stay transparent, organized, and legally compliant — all while saving time and reducing risk. What’s more, it allows board members to collaborate effectively.
Why document management is crucial for nonprofits
In short, without proper document management, a nonprofit organization would be lost in files like nonprofit board meeting minutes, financial records, tax documents, etc. But there’s much more.
Here’s why adequate document management is essential for nonprofit organizations:
- Compliance with regulations
Nonprofits must follow rules from the IRS, GDPR, the Sarbanes-Oxley Act, and grantmakers. A structured system helps track and store key files required for audits and reporting. - Transparency and accountability
Proper document storage supports clear communication with donors, board members, and the public. It shows that the organization is using funds responsibly and making informed decisions. - Operational efficiency
With cloud-based DMS software or dedicated board portals for nonprofits, staff can access the same document remotely, without digging through file cabinets. This speeds up workflows, reduces errors, and helps teams focus on mission-driven work. - Data security
Sensitive data like financial contracts and personally identifiable information must be protected. Encryption tools, antivirus software, and access controls help eliminate potential threats. - Secure board collaboration
Board portals offer remote access features for securely sharing board meeting materials, voting records, and strategy documents — all while meeting compliance standards.
Key benefits of document management systems for nonprofits
Here are the main advantages of nonprofit board software for effective document management:
- Centralized document storage
Document management software or a board portal keeps all essential records — from donor files to tax invoices — in one secure place. This makes it easier for teams to find, update, and manage documents without having to sort through multiple folders or file cabinets. - Remote access and collaboration
With a board portal, a nonprofit’s staff and board members can access the same document from any location with a stable internet connection. This is especially helpful for remote teams or boards working across different time zones. - Improved security and compliance
Encryption tools, antivirus software, and restricted access settings help protect sensitive information and confidential documents. Certified security experts often build these systems to support legal and regulatory compliance. - Data backup and disaster recovery
Most data management systems include automatic data backup programs that protect against accidental loss or hardware failure. This ensures critical documents are never lost. - Increased efficiency and time savings
A well-organized DMS helps streamline day-to-day operations by reducing manual work and making document retrieval possible in just a few clicks. This allows nonprofits to focus more on their mission and less on administrative tasks. - Cost savings over time
While some platforms have upfront costs, they help save money in the long run by reducing paper use, minimizing errors, and avoiding compliance penalties. Plus, eliminating physical storage needs lowers operational expenses. - Better board communication
For governance tasks, board portals offer specialized tools for sharing board meeting materials, tracking decisions, and storing sensitive files securely. This strengthens transparency and collaboration at the leadership level.
Also read: Learn more about nonprofit governance best practices to improve transparency in your organization.
Common document management challenges for nonprofits
Despite their best efforts, nonprofits may still struggle with document management due to a mix of reasons. Here are some of the most common challenges:
- Data breaches and security risks
In 2024, 1.35 billion individuals were impacted by data breaches in the US, representing a significant increase from the 353 million affected individuals in 2023. Considering the sensitive nature of the data nonprofits handle, such as donor records and personal information, data breaches pose a significant threat to them. Without proper security measures, these records can be vulnerable to cyberattacks or internal misuse. - Slow, paper-based processes
Relying on physical documents leads to lengthy processing times, especially for approvals, reimbursements, or compliance reporting. Storing and retrieving files from paper-based archives also slows down day-to-day operations. - Disorganized digital files
Even digital systems can cause problems when documents are scattered across multiple platforms or saved under unclear names. Confusion over which is the latest version of the same document can lead to costly errors or outdated information being used. - Compliance and audit risks
Missing certain records, such as documents related to financial transactions or grant reports, can put the nonprofit’s tax-exempt status or funding eligibility at risk. Weak retention policies make it difficult to prove accountability or meet legal requirements. - Limited resources for implementation
Many nonprofits lack the staff capacity or budget to research, select, and roll out new cloud-based DMS software. This leads to delays in modernization and leaves teams stuck with inefficient legacy systems.
Most of these challenges can be addressed by board portals. With remote access features, built-in version control, and encrypted storage, they give board members and leadership teams the tools to work efficiently and safely, even with limited resources.
Key features to look for in a document management system
Now, let’s focus on what you should look for in a nonprofit document storage and management solution to make this process secure and smooth:
| Feature | Why it matters |
| Cloud-based accessibility | Enables remote access for staff and board members at any time and from any location. |
| Robust search and retrieval | Helps users find the right document instantly — no more digging through folders or renaming files. |
| Version control and audit trails | Prevents confusion by tracking changes and showing who accessed or edited the same document. |
| Automated workflows | Speeds up tasks like approvals, reimbursements, or grant reporting while reducing manual errors. |
| Data backup and disaster recovery | Protects donor records, financial documents, and tax files from loss due to accidents or cyberattacks. |
| Third-party integrations | Seamlessly connects with CRM, accounting, and project management tools that nonprofits already use. |
| Granular access controls | Allows you to restrict access based on roles, ensuring personally identifiable information stays protected. |
| Board book creation | Allows board secretaries or admins to compile and share secure, professional board meeting packets in minutes. |
| E-signature support | Enables legally binding approvals and document sign-offs without printing, scanning, or emailing PDFs. |
Also read: Are nonprofit board meetings open to the public?
Steps to implementing a document management system
Setting up a document management system (DMS) may seem like a big task, but breaking it down into clear steps makes the process much more manageable, even for a small nonprofit team. Here’s how to do it right:
- Understand your needs
Start by assessing what types of documents your organization handles — donor records, financial documents, volunteer forms, board meeting minutes, and so on. Think about who needs access and how often. This will help you understand what features and capabilities you need and, therefore, choose the right system from the beginning. - Choose the right platform
Look for a solution that fits your budget and can grow with you. Many providers offer nonprofit discounts, so don’t hesitate to ask. Prioritize nonprofit board management software that includes strong security, remote access, and effective collaboration tools. Additionally, pay attention to an intuitive interface — after all, not all members of our board will be of the same technical background. - Train your team
A good system only works if your staff and volunteers know how to use it. Set aside time for onboarding and practice. This way, everyone feels confident and uses the tools consistently. What’s even better is to look for the solution that offers effective onboarding. This way, you’ll ensure all members of your board will understand how to use the software. - Move your documents
Migrate your digital files into the new system, and scan paper records where possible. Focus on good document organization — label everything clearly to avoid confusion later. - Set clear policies
Decide how long you’ll keep certain records, who can access what, and how to handle file naming. Write these rules down and make them part of your onboarding for new team members. - Keep improving
Your needs will evolve, so review your DMS setup regularly. Fix security bugs, update permissions, and make sure you’re still protecting sensitive data. - Onboard your board
Don’t forget to bring your board members into the system, especially if you’re using a board portal. Offer a walkthrough of key features like board book creation, remote access, e-signatures, and secure document sharing. This way, governance stays organized, transparent, and easy to manage — even during leadership changes.
Best practices for document management in nonprofit organizations
Choosing the right software for nonprofit board document management is only the beginning of the process. For it to be effective and improve your board’s operation, you’ll still need to take certain regular steps.
Here are some of the best recommendations:
- Clean up your storage regularly
Every few months, review what’s in your system. Delete outdated drafts, duplicates, or documents no longer needed. This keeps your document library clean and makes it easier to find what matters. - Secure sensitive data
Any files with financial records, donor information, or personally identifiable data should be protected. Ensure you use encryption tools, antivirus software, and access restrictions. Also, make sure people only use secure devices when working with confidential documents. - Create habits around good documentation
Encourage your team to name files clearly, follow folder structures, and track changes properly. For example, instead of naming a file “report_final_v2,” use something like “2025_Q2_Donor_Report_Approved.pdf” — it’s clearer and easier to search later. When everyone knows what’s expected, it’s easier to stay organized and accountable, especially during audits or leadership transitions. - Use a board portal
For board-level materials like nonprofit board meeting agendas, resolutions, or confidential updates, a board portal is a smart solution. It helps board members access documents securely, sign papers electronically, and keep discussions in one safe place, without relying on messy email chains or shared drives.
Also read: How to run a nonprofit board meeting?
Final words
A nonprofit organization’s success largely depends on how it manages all the documentation. Needless to say, nonprofits deal with piles of files, which makes it easy to get lost in them. As a result, it can significantly impact operations and harm decision-making.
A solution to that? A secure and reliable document management system, like board portals. It can help keep your files organized, protect sensitive data, and give your team easy access to the documents they need, when they need them. What’s more, it might enable a more effective collaboration between all board members with dedicated tools. All together, this will help your nonprofit save time, reduce risk, and stay focused on its mission.
Start small: evaluate how you manage documents in your nonprofit right now; this can already make a big difference. By realizing the problem, you can then proceed with searching for a solution. And here’s where board portals might become helpful.
Explore the variety of document and board management software for nonprofits on our main page and make an informed choice.