CONFLICT OF INTEREST POLICY
Section 1. Preamble and Purpose.
ORGANIZATION and all its various affiliated organizations (collectively referred to as “NPO”), are nonprofit, tax-exempt organizations, and, as such, must conform with the requirements of the Internal Revenue Code and of state corporate law. NPO’s board members, officers, and employees owe a fiduciary duty of care and loyalty to NPO and have the responsibility for administering the affairs of NPO honestly and prudently and for exercising their best care, skill, and judgment for the sole benefit of NPO. By assuming their office or duties, those persons are expected to exercise the utmost good faith in their management of NPO, not to use their positions with NPO or any knowledge they may have gained from those positions for their personal benefit, and to advance the interests of NPO over any personal interests that may be adverse to NPO.
In addition, NPO’s financial stability requires that it enjoy continuing support from the general public. Ensuring that potential conflicts of interest are handled appropriately is thus important, not just for the sake of satisfying the applicable legal requirements, but also for the purpose of maintaining the public’s trust in NPO as an organization that is managed responsibly and with integrity.
The purpose of this conflict of interest policy statement is to ensure that these goals are met, by providing general guidelines to NPO’s directors, officers, employees, and volunteers concerning the policies and procedures to be followed whenever NPO is contemplating entering into a transaction or arrangement that might benefit the private interest of any person who is in a position to influence NPO’s decision. This conflict of interest policy is intended to supplement, but not replace, any applicable federal or state laws affecting conflicts of interest.
A copy of this policy statement shall be provided to all persons who may be Responsible Persons.
Section 2. Responsible Persons.
This policy statement is directed not only to the directors and officers of NPO, but also to all employees, committee members, and volunteers who may be in a position to exercise substantial influence over the actions and affairs of NPO. including anyone who has proprietary information concerning NPO. In this policy statement, all the preceding individuals are referred to as “Responsible Persons.”
Section 3. Interested Persons.
For purposes of this policy statement, the following definitions shall also apply:
An “Interested Person” shall mean a Responsible Person, as well as the Family Members and Controlled Entities of that Responsible Person, if any of them has a direct or indirect interest in a transaction or arrangement involving NPO.
A “Family Member” shall mean the spouse, ancestors, children, grandchildren, great grandchildren, and brothers and sisters (whether of the whole or half blood) of a Responsible Person, and the spouse of each such child, grandchild, great grandchild, and brother or sister.
A “Controlled Entity” shall mean any corporation or organization of which a Responsible Person is a board member, an officer, a partner, participates in the management of or is employed by, or is, directly or indirectly, a debt holder or the beneficial owner of any class of equity securities; and any trust or other estate in which a Responsible Person has a substantial beneficial interest or as to which a Responsible Person serves as a trustee or in a similar capacity.
Certain transactions with any person who was in a position to exercise substantial influence over the actions and affairs of NPO at any time within the five years preceding a transaction may be subject to the provisions of Section 4858 of the Internal Revenue Code. Even though such persons may no longer be associated with NPO at the time of transaction in question, NPO and those making decisions on its behalf shall adhere to and apply this policy as if such persons (and their Family Members and Controlled Entities) were Interested Persons at the time of the transaction involved.
Section 4. Nature of Potential Conflicts of Interest.
It is not possible to describe all conceivable situations that constitute a conflict of interest. The facts of each situation will determine whether the interest in question is such as to give rise to a potential conflict, including the amount of money involved, the extent to which a person affected could influence NPO’s decisions, and whether the interest is of such a nature that it might affect the objectivity or the business judgment of the person involved. In determining whether a conflict is involved, there is no substitute for sound judgment in each case based upon the particular facts involved. Nonetheless, the following information is intended to provide general guidelines.
A.Personal Gain From Position. A potential for a conflict of interest arises whenever NPO proposes to engage in any transaction or arrangement with an Interested Person, and such Interested Person stands in any way to gain from that transaction or arrangement. Examples of potential conflict of interest transactions include the following:
[1]An Interested Person supplies facilities, goods, or services to, or acquires facilities, goods, or services from, NPO.
[2]An Interested Person may receive any compensation or other consideration from a third party in connection with a gift, purchase or sale of real estate, securities, or other property involving that third party.
[3]An Interested Person is employed by or holds a position of authority or responsibility with another organization that may compete with NPO with respect to programs, services, or donors.
[4]An Interested Person uses NPO’s personnel, equipment, supplies, or good will for other than NPO approved activities, programs, and purposes.
[5]An Interested Person receives a substantial gift, loan, or other similar benefit from a third party that would not have been made but for a Responsible Person’s duties towards or relationship with NPO.
The preceding examples are not intended to be exhaustive, and a potential for a conflict of interest may arise in other ways or through other types of transactions. NPO anticipates that Responsible Persons will weigh and recognize other potential for conflicts of interest by analogy.
B.Use of Confidential Information. A Responsible Person may have a conflict of interest when he or she uses for personal advantage or for the advantage of any other group, organization or business any confidential information or material acquired in course of carrying out the Responsible Person’s responsibilities with NPO. Such information may include, but is not limited to, rosters, mailing lists, telephone directories, business plans, certain information regarding vendors and donors, and confidential board proceedings.
C.Prohibition Against Loans. Colorado law prohibits the making of any loans by NPO to its directors and officers. Any director or officer who participates in the making of any such loan shall be liable to NPO for the amount of such loan until it is repaid.
D.Transactions Generally Excluded. Certain types of transactions, either because of their incidental nature, because they are a necessary consequence of NPO’s ordinary and routine operations, or otherwise, generally do not arise to the level of presenting a conflict of interest. These might include, for example, the following:
[1]An Interested Person’s participation in NPO’s normal employee benefits programs.
[2]An Interested Person’s gift or receipt of common courtesies, such as flowers or other inexpensive gifts on special occasions, occasional meals, or reasonable entertainment appropriate to a business relationship and associated with business discussions, if such may be regarded as being consistent with sound business practice.
[3]Because of the compatibility of their mission, programs, and services, transactions and arrangements between ORGANIZATION and its various affiliated entities are not subject to the conflicts of interest policy set forth in this statement. However, transactions or arrangements between ORGANIZATION and individuals who may occupy positions of influence with its various affiliated entities may fall within the scope of this conflict of interest policy and, under appropriate circumstances, such individuals should be considered Responsible Persons with respect to ORGANIZATION.
Section 5. Procedures for Disclosure, Review, and Action on Conflicts of Interest.
The mere fact that an Interested Person may have a financial interest in a transaction or arrangement involving NPO does not necessarily means that a conflict of interest exists, or that, if one does exist, that it is material enough to be of practical importance, or if material, that upon full disclosure of all relevant facts and circumstances, it is necessarily adverse to the interests of NPO. It is the policy of NPO that only its board of directors and those to whom it has properly delegated such authority are authorized to determine whether a conflict of interest exists with respect to any particular transaction.
In order that the board of directors may exercise that authority responsibly, it is important that each Responsible Person scrutinize his or her transactions and outside business interests and relationships for potential conflicts and make appropriate disclosure to the appropriate decision-maker before NPO enters into a transaction. Therefore, in each case in which a Responsible Person believes or reasonably should believe that a proposed transaction creates a potential for a conflict of interest, the following steps shall be taken:
A.Duty to Disclose. In connection with, and prior to NPO’s entering into, any transaction or arrangement that might present an actual or possible conflict of interest, the Responsible Person involved shall disclose the existence and nature of his or her interest in the transaction, as well as all material facts relating to the transaction. In the case of NPO staff, this disclosure should be made to the President (or if the President is the one with the conflict, then to the board chair), who shall bring the matter to the attention of the board. In the case of directors, this disclosure should be made to the board chair, (or if the board chair is the one with the conflict, then to the board vice-chair), who shall bring the matter to the attention of the board as a whole.
B.Determining Whether a Conflict of Interest Exists. After a Responsible Person’s full disclosure of any interest in a proposed transaction or arrangement and of all material details concerning the transaction, the board or any committee of the board properly delegated such power may discuss the matter with the applicable Responsible Person to clarify or obtain additional relevant information. The applicable Responsible Person shall then leave the meeting, and the board or such committee shall determine whether a conflict of interest exists and whether the conflict can be eliminated or avoided. In connection with such determination, the board or such committee shall consider whether NPO can obtain a more advantageous transaction or arrangement with reasonable efforts from a person or entity that would not give rise to a conflict of interest, and the chair of the board or such committee may, if appropriate, appoint a disinterested person or committee to assist in such an investigation.
C.Procedures for Addressing a Conflict of Interest. If the board or any committee of the board properly delegated such power determines that a conflict of interest exists and cannot be eliminated or avoided and, if appropriate, that a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the board or committee shall determine by a majority vote of disinterested directors whether the transaction or arrangement is in NPO’s best interest and whether the transaction or arrangement is fair and reasonable to NPO despite the existence of the conflict, based on whether the proposed transaction or arrangement is at least as favorable to NPO as an arm’s-length transaction with disinterested individuals or organizations. The decision of the board or committee shall rest in its sole discretion, but shall be made in good faith and in manner such board or committee reasonably believes to be in NPO’s best interest.
D.Abstention of Responsible Person. The Responsible Person involved shall not be present during any discussions or vote by the board or such committee on the proposed transaction or arrangement and shall not participate in any final deliberations or vote on such matter.
E.Violations of Duty to Disclose. If the board or any proper committee has reasonable cause to believe that a Responsible Person has failed to disclose any actual or potential conflict of interest, it shall inform the Responsible Person of the basis for its belief and afford the Responsible Person an opportunity to explain the alleged failure to disclose. If, after hearing the Responsible Person’s response and after making such further investigation as may be warranted under the circumstances, the board or committee determines that the Responsible Person has in fact failed to disclose an actual or potential conflict of interest in violation of this policy statement, then the board or committee shall take appropriate disciplinary or corrective action.
Section 6. Record of Proceedings.
The minutes of the board and all committees with board-delegated powers shall contain —
[a]The names of the persons who, at such meeting, disclosed or otherwise were found to have an actual or potential conflict of interest in connection with a proposed transaction or arrangement, the nature of the interest, any action taken to determine whether a conflict of interest existed, and the 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 the discussions and votes relating to the transaction or arrangement, a summary of 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. Compensation.
A member of the board who receives compensation, directly or indirectly, from NPO for services shall not vote on matters pertaining to his or her compensation.
A member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from NPO for services shall not vote on matters pertaining to his or her compensation.
Members of the board or any committee whose jurisdiction includes compensation matters and who receive compensation, directly or indirectly, from NPO, either individually or collectively, are not precluded from providing information to the board any committee regarding compensation matters.
Section 8. Annual Statements.
Each director, principal officer and member of a committee with board-delegated powers shall, at the time of appointment to such position and annually thereafter, sign a Disclosure Statement in a form substantially similar to that attached that affirms that such person —
[a]has received a copy of this conflicts of interest policy,
[b]has read and understands this policy,
[c]has agreed to comply with this policy,
[d]discloses any transactions or arrangement between NPO and such person during the preceding year that might have given rise to a conflict of interest.
In addition, each director, principal officer and member of a committee with board-delegated powers shall annually sign a Gift Policy Disclosure Form in a form substantially similar to that attached acknowledging that such person understands NPO’s policy concerning the receipt of gifts, entertainment, or other favors and agrees to comply with that policy.
Section 9. Periodic Reviews.
To ensure NPO 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, at a minimum, 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 and third-party vendors conform to NPO’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and do not result in inurement, impermissible private benefit or in an excess benefit transaction.
Section 10. Use of Outside Experts.
When conducting the periodic reviews as provided for in Section 9, NPO may, but need not, use outside advisors. If outside advisors are used, their use shall not relieve the board of its responsibility for ensuring periodic reviews are conducted.
CONFLICT OF INTEREST DISCLOSURE FORM
Preliminary Note: In order to comply with NPO’s conflict of interest policy, this Disclosure Statement requires you to provide information with respect to certain parties that are related to you. These persons are termed “Related Parties” and include the following:
[a] your spouse, ancestors, children, grandchildren, great grandchildren, and brothers and sisters (whether of the whole or half blood), and the spouse of each such child, grandchild, great grandchild, and brother or sister;
[b] any corporation or organization of which you are a board member, an officer, a partner, participate in management or are employed by, or are, directly or indirectly, a debt holder or the beneficial owner of any class of equity securities; and
[c] any trust or other estate in which you have a substantial beneficial interest or as to which you serve as a trustee or in a similar capacity.
1. YOUR NAME: (Please print)
_______________________________
2. YOUR POSITION:
______ director
______ executive committee
______ officer
______ committee member
______ staff (position): ____________
3. Have you or any of your Related Parties provided services or property to NPO in the past year?
_____ YES _____ NO
If yes, please describe the nature of the services or property and if a Related Party is involved, the identity of the Related Party and your relationship with that person or entity:
____________________________________________________
4. Have you or any of your Related Parties purchased services or property from NPO in the past year?
_____ YES _____ NO
If yes, please describe the purchased services or property and if a Related Party is involved, the identity of the Related Party and your relationship with that person or entity:
____________________________________________________
5. Please indicate whether you or any of your Related Parties had any direct or indirect interest in any business transaction(s) in the past year to which NPO was or is a party?
_____ YES _____ NO
If yes, describe the transaction(s) and if a Related Party is involved, the identity of the Related Party and your relationship with that person or entity:
____________________________________________________
6. Were you or any of your Related Parties indebted to pay money to NPO at any time in the past year (other than travel advances or the like)?
_____ YES _____ NO
If yes, please describe the indebtedness and if a Related Party is involved, the identity of the Related Party and your relationship with that person or entity:
____________________________________________________
7. In the past year, did you or any of your Related Parties receive, or become entitled to receive, directly or indirectly, any personal benefits from NPO or as a result of your relationship with NPO, that in the aggregate could be valued in excess of $1,000, that were not or will not be compensation directly related to your duties to NPO ?
_____ YES _____ NO
If yes, please describe the benefit(s) and if a Related Person is involved, the identity of the Related Party and your relationship with that person or entity:
____________________________________________________
8. Are you or any of your Related Parties a party to or have an interest in any pending legal proceedings involving NPO?
_____ YES _____ NO
If yes, please describe the proceeding(s) and if a Related Party is involved, the identity of the Related Party and your relationship with that person or entity:
____________________________________________________
9. Are you aware of any other events, transactions, arrangements or other situations that
have occurred or may occur in the future that you believe should be reviewed by NPO’s board in accordance with the terms and intent of NPO’s conflict of interest policy?
_____ YES _____ NO
If yes, please describe the situation(s) and if a Related Party is involved, the identity of the Related Party and your relationship with that person or entity:
____________________________________________________
I certify that I have received, read, understand, and agree to comply with NPO’s conflict of interest policy and that my responses to the above questions are complete and correct to the best of my information and belief. I agree that if I become aware of any information that might indicate that this disclosure is inaccurate or that I have not complied with this policy, I will immediately notify either the President or board chair as specified by NPO’s conflicts of interest policy.
| Date: ______________________ | _______________________________________ |
| Signature |
GIFT POLICY AND DISCLOSURE FORM
As part of its conflict of interest policy, ORGANIZATION and all its various affiliated entities (collectively referred to as “NPO”) requires that Interested Persons and their Related Parties decline to accept certain personal gifts, consideration or remuneration from individuals or companies that seek to do business with NPO or are a competitor of NPO. This policy and disclosure form is intended to implement that prohibition on gifts.
Section 1. “Responsible Person” is any director, officer, employee, committee member, or volunteer who may be in a position to exercise substantial influence over the actions and affairs of NPO.
Section 2. “Related Party” is a spouse, ancestors, children, grandchildren, great grandchildren, and brothers and sisters (whether of the whole or half blood) of a Responsible Person, and the spouse of each such child, grandchild, great grandchild, and brother or sister.
Section 3. “Contract or Transaction” is any agreement or relationship involving the sale or purchase of goods, services or rights of any kind, receipt of a loan or grant, or the establishment of any other pecuniary relationship. The making of a gift to NPO is not a “Contract” or “Transaction.”
Section 4. Prohibited Gifts, Gratuities and Entertainment. Except as approved by the Chairman of the Board or his designee or for gifts of a value less than $50 which could not be refused without discourtesy, no Responsible Person or Related Party shall accept gifts, entertainment, or other favors from any person or entity which:
[a]does or seeks to do business with NPO,
[b]does or seeks to compete with NPO, or
[c]has received, is receiving, or is seeking to receive a Contract or Transaction with NPO.
I certify that I have read the above policy concerning gifts, and I agree that I will not accept, nor will any Related Party to me accept, gifts, entertainment, or other favors from any individual or entity, which would be prohibited by the above policy. Following my initial statement, I agree to provide a signed statement at the end of each calendar year certifying that I have not received, nor has any Related Party to me received, any such gifts, entertainment, or other favors during the preceding year.
| Date: ______________________ | _______________________________________ |
| Signature |
