ARTICLE VII. CONFLICT OF INTERESTS
Section 1: Purpose
The purpose of the conflict of interest policy is to protect this tax-exempt organization’s
(Organization) interest when it is contemplating entering into a transaction or arrangement
that might benefit the private interest of an officer or director of the Organization 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.
Section 2: Definitions
a. 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, is an
interested person.
b. Financial Interest
A person has a financial interest if the person has, directly or indirectly, through
business, investment, or family:
- An ownership or investment interest in any entity with which the Organization
has a transaction or arrangement, - A compensation arrangement with the Organization or with any entity or
individual with which the Organization has a transaction or arrangement, or - A potential ownership or investment interest in, or compensation arrangement
with, any entity or individual with which the Organization is negotiating a
transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are not
insubstantial.
A financial interest is not necessarily a conflict of interest. Under Article II, Section 2, a person
who has a financial interest may have a conflict of interest only if the appropriate governing
board or committee decides that a conflict of interest exists.
Section 3. Procedures
a. Duty to Disclose. In connection with any actual or possible conflict of interest, an
interested person 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 governing board delegated powers considering the proposed transaction or
arrangement.
b. 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 committee meeting while the determination
of a conflict of interest is discussed and voted upon. The remaining board or committee
members shall decide if a conflict of interest exists.