Purpose
The purpose of the conflict of interest policy is to protect the Foundation’s interest when contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of the Foundation or might result in a possible excess benefit transaction. This policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.
Definitions:
Interested Person
Any director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, in an interested person.
Financial Interest
A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:
a. An ownership or investment interest in any entity with which the Foundation has a transaction or arrangement.
b. A compensation arrangement with the Foundation or with any entity or individual with which the Foundation has a transaction or arrangement, or
c. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Foundation is negotiating a transaction or arrangement.
Procedures
Duty to Disclose
In connection with any actual or possible conflict of interest, an interested party must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with the governing board delegated powers considering the proposed transaction or arrangement.
Determining Whether a Conflict of Interest Exists
After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she shall leave the governing board or executive committee meeting while the determination of a conflict of interest is discussed and voted upon. The remaining board or executive committee members shall decide if a conflict of interest exists.
Procedures for Addressing the Conflict of Interest
a. An interested person may make a presentation at the governing board or executive committee meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction arrangement involving the possible conflict of interest.
b. The chairperson of the governing board or executive committee shall, if appropriate appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
c. After exercising due diligence, the governing board or executive committee shall determine whether the foundation can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.
d. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing board or executive committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the Foundations’ best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination it shall make its decision as to whether to enter into the transaction or arrangement.
Violations of the Conflicts of Interest Policy
a. If the governing board or executive committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member on opportunity to explain the alleged failure to disclose.
b. If, after hearing the member’s response and after further investigation as warranted by the circumstances, the governing board or executive committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
Records of Proceedings
The Minutes of the governing board and all committees with board delegated powers shall contain:
a. The names of the persons who disclosed or otherwise were found to have a financial interest on connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing board’s or committee’s decision as to whether a conflict of interest in fact existed.
b. The names of the persons who were present for discussions and votes relating to the proposed transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
Compensation
a. A voting member of the governing board and or executive committee shall not receive compensation, directly or indirectly, for the Foundation.
Annual Statements
Each director, principal officer and a member of a committee with governing board delegated powers shall annually sign a statement which affirms such person:
a. Has received a copy of the conflicts of interest policy,
b. Has read and understands the policy,
c. Has agreed to comply with the policy, and
d. Understands the foundation is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
Periodic Reviews
To ensure the Foundation operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, include the following subjects:
a. Whether compensation arrangements and benefits are reasonable, based on competent survey information and the result of arm’s length bargaining.
b. Whether partnerships, joint ventures and arrangements with management organizations conform to the Foundation’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services further charitable purposes and do not result in impermissible private benefit or in excess benefit transaction.
It is now resolved that:
• Any duality or possible conflict of interest on the part of any board member should be disclosed to other board members and made a matter of record, either through an annual procedure, or when the interest becomes a matter of board action.
• Any board member having a duality of interest or possible conflict of interest on any matter should not vote or use his/her personal influence on the matter. The minutes of the meeting should reflect that a disclosure was made, the abstention from voting.
• The foregoing requirements should not be construed as preventing the board member from briefly stating his/her position in the matter, nor from answering pertinent questions of other board members since his/her knowledge may be of great assistance.
• It is further resolved that this policy be reviewed annually for the information and guidance of board members, and that any new board member be advised of the policy upon entering the duties of his/her office. The board chairperson and secretary are authorized and directed to see that this policy is followed.