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Directories - Configure directories in your file system for temporary files, images, custom files and custom templates.
Click Directories which brings you to the Upload Directories page.
Indicate a path on your server or network for the item(s) you wish to setup - temporary files, images, custom files and/or custom templates.
For example, a temporary file path might look like this: /home/drupal/public_html/drupal/files/civicrm/upload/
Click Save to save your action or Cancel to cancel it.
If successful you will see the message "Your settings changes have been saved."
To create custom templates, simply create a folder (ex. drupal/sites/all/civicrm_templates ). And add the full system path into the custom templates section on the directories page.
To modify a template (ex. civicrm/templates/CRM/History/Selector/Activity.tpl ) simply copy the path and file in your custom templates directory (ex. drupal/sites/all/civicrm_templates/CRM/History/Selector/Activity.tpl ) You can then modify the custom template. CiviCRM searches your custom template directory and if it finds a template, it will use that instead of the stock template.
Now when you upgrade CiviCRM your custom template will not be overwritten.