Nonprofit Compliance & Legal Toolkit — Sample

Heads up: This is a starter template, not legal advice. Nonprofit law varies by state, and your situation may have wrinkles a template can't anticipate. Have your attorney review this before your board adopts it, and record the adoption in your board minutes.

The purpose of this policy is to protect the interests of [Organization Name] when it considers a transaction or arrangement that might benefit the private interest of an officer, director, or key employee. This policy supplements, and does not replace, any applicable state and federal laws governing conflicts of interest for nonprofit and charitable organizations.

This policy applies to every voting member of the board, every officer, and any employee or committee member with board-delegated powers (each an "interested person").

Article III: What Counts as a Financial Interest

A person has a financial interest if, directly or through a family member or business, they have an ownership or investment interest in any entity the organization does business with, a compensation arrangement with the organization or with any entity or individual it does business with, or a potential ownership, investment, or compensation interest in any entity or individual the organization is negotiating with. A financial interest is not automatically a conflict of interest. A conflict exists only when the board or a committee decides one exists after reviewing the facts.