Conflict of Interest Policy Sample for Nonprofit

CONFLICT OF INTEREST POLICY AND PROCEDURES

Document ID: GOV-COI-001
Effective Date: [Effective Date]
Version: 1.0
Governing Jurisdiction: [State/Province], [Country]

---

1. STATUTORY & LEGAL COMPLIANCE NOTICE

LEGAL DISCLAIMER: This document is provided for institutional informational purposes and constitutes a template for legal consideration. Conflict of Interest (COI) policies must comply with the specific nonprofit statutes (e.g., IRS Form 990 requirements in the U.S., or local Corporations Acts). This document does not constitute formal legal advice. Counsel of record should review this policy against the specific organizational bylaws and state/provincial non-profit statutes applicable to the [Company Full Legal Name].

---

2. PARTIES & RECITALS

This Conflict of Interest Policy (the "Policy") is adopted by [Company Full Legal Name], a non-profit organization organized under the laws of [Governing Jurisdiction], with its principal office located at [Principal Address] (the "Organization").

WHEREAS, the Organization’s Board of Directors, officers, and key employees (collectively, "Interested Persons") have a fiduciary duty to act in the best interest of the Organization and to avoid situations where personal or professional interests may conflict with the mission and operations of the Organization.

---

3. OPERATIVE CLAUSES

SECTION 1: PURPOSE

The purpose of this Policy is to protect the tax-exempt status of the Organization and to ensure that when the Organization enters into transactions or arrangements, they are fair, reasonable, and for the benefit of the Organization, preventing the improper private benefit to any individual.

SECTION 2: DEFINITIONS

2.1. Interested Person: Any director, officer, or member of a committee with governing board-delegated powers who has a direct or indirect Financial Interest, as defined below. 2.2. Financial Interest: A person has a financial interest if they have, directly or indirectly, through business, investment, or family: (a) An ownership or investment interest in any entity with which the Organization has a transaction or arrangement; (b) A compensation arrangement with the Organization or with any entity or individual with which the Organization 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 Organization is negotiating a transaction or arrangement.

SECTION 3: PROCEDURES

3.1. 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. 3.2. Determining Conflict: After disclosure of the Financial Interest and all material facts, and after any discussion with the Interested Person, they 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.

SECTION 4: PROCEDURES FOR ADDRESSING THE CONFLICT

4.1. The governing board or committee may appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. 4.2. After exercising due diligence, the governing board or committee shall determine whether the Organization 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. 4.3. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the Organization’s best interest, for its own benefit, and whether it is fair and reasonable.

SECTION 5: VIOLATIONS OF THE POLICY

If the governing board or 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 an opportunity to explain the alleged failure to disclose. If, after hearing the member’s response and making further investigation, the board determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.

SECTION 6: 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 in 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 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.

SECTION 7: ANNUAL STATEMENTS

Each director, principal officer, and member of a committee with governing board-delegated powers shall annually sign a statement which affirms that such person: (a) Has received a copy of the conflict of interest policy; (b) Has read and understands the policy; (c) Has agreed to comply with the policy; and (d) Understands the Organization 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.

---

4. EXECUTION & SIGNATURES

FOR [ORGANIZATION NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Company: [Company Legal Name] Date: [Date]

FOR [BOARD MEMBER / OFFICER]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

---

5. STEP-BY-STEP EXECUTION & FILING GUIDE

1. Customization: Open the document in your preferred word processor. Use "Find and Replace" to populate all bracketed fields (e.g., [Company Full Legal Name]).
2. Review: Ensure the "Governing Jurisdiction" matches the state where the Articles of Incorporation are filed.
3. Approval: Present this Policy to the Board of Directors for a formal vote. Record the adoption in the official Board Minutes.
4. Distribution: Once adopted, distribute to all key personnel and board members.
5. Execution:
   • Utilize digital signature software (e.g., DocuSign or Adobe Sign) to track timestamps and audit trails of signatures.
   • If using paper, ensure blue ink for original wet signatures.
6. Record Retention: Maintain the signed Annual Statements (Section 7) and copies of this signed Policy in the Organization’s permanent governance binder (Corporate Minute Book). Retain digital backups in a secure, encrypted cloud repository.