All non-profit entities and charities have one goal in common – to help others. Whether it's to improve the quality of life for a specific community or raise funds for a school, assisting is the critical element.
Unlike businesses and corporations, private and financial gain isn't and shouldn't be the goal. However, people with executive positions in non-profit organizations are typically busy people. And, as such, they may sometimes overlook specific conflicts of interest they may have in their roles.
These conflicted roles needn't be nefarious, and you can easily manage them if they're talked about openly. Furthermore, disclose any potential conflicts of interest in an official document called a Conflict of Interest Policy.
Even if a director or someone in a position of authority at a non-profit organization doesn't have a specific conflict of interest, they should sign the policy regardless.
They can simply state that a conflict of interest doesn't exist. On the other hand, this type of policy allows people in power to be fair and open about any possible conflicts.
But it's also mandatory for the non-profit organization leaders to abide by Duty of Loyalty, which describes their obligation to act in the organization's best interest.
On top of that, as a tax-exempt entity, every non-profit organization is required to submit an IRS 990 Form. The form acknowledges that the organization's board of directors signed Conflicts of Interest Policies.
Depending on your state, you may also know a Conflicts of Interest Policy as:
Essentially, every non-profit entity that is considered tax-exempt is required to create Conflicts of Interest Policies.
There are many types of non-profit organizations such as unions, religious institutions, social welfare organizations, recreational clubs, teacher associations, veterans' organizations, and similar.
Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your Conflicts of Interest Policy.
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A Conflicts of Interest Policy form isn't a complicated document. But it needs to contain important details regarding potential conflicts of interest by directors of the board.
You must have a clear purpose of the policy and clearly define what conflict of interest is within an organization. We can make this process easy for you.
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Before a director or an employee of a non-profit organization signs the policy, they should take the time to review it.
Often, the document requires them to choose from the list of potential conflicts, and other times they must enter specific information. Upon reading and reviewing, they should sign the policy before a board president or the secretary.
The Conflicts of Interest Policy doesn't require notarization, and you don't have to file with a government entity.
However, it should be noted in the organizations' meeting minutes and kept on file. Both the organization and the person signing the policy should have a copy of the form.
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