A policy governing conflicts of interests is perhaps the most important policy a non-profit board can adopt. The ability to make good, effective decisions that suit your organization’s goals is essentially rooted in the idea that all involved in decision-making have the same interests in and focus on the organization’s success. This success is typically affected by each individual’s personal or professional interests. Non-profit organizations often require board members, directors, committee chairs, grant-writers and other officers to possess an absolute interest of loyalty to the organization. This duty also includes the duty to disclose any known conflicts between an individual’s personal or professional interests and the goals of the organization. Further, non-profit organizations are required to formulate a written plan for how to resolve any potential conflict of interests that may arise and submit that policy to the IRS as part of initial and ongling qualification as a non-profit organization.
The Kendrick Law Group recommends that certain questions are asked in order to determine whether any conflict of interests exist now or may exist in the future.
Questions to consider asking board members and other decision-makers of your non-profit organization include, but are not limited to:
- Do you volunteer with or hold any specified position with any organization outside of the non-profit?
- Do you knowingly possess any interests that are in opposition to the mission, values, or goals of the non-profit?
- As you will likely participate in the deliberation and resolution of issues important to the non-profit, do you or a close family member have other professional, business, or volunteer responsibilities outside of the non-profit that could bias you one way or another while you are working with the non-profit?
- Have you had an interest in or relationship with any of the non-profit’s current partners?
- Does the business, organization, or entity that the non-profit seeks to develop a working relationship with have conflicting goals or values?
- Has a family member been hired to work with the non-profit as a consultant or some other important role?
- Does the non-profit have expressly written policies and expectations related to the disclosure of conflicts of interest?
Contact Kate Hollis with The Kendrick Law Group today to discuss your nonprofit organization’s conflict of interest policy. (407) 641-5847
Co-written by: Kirsten Williams, Law Clerk