Developing a Non-Profit Conflict of Interest Policy

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Conflict of interest can be a difficult aspect to manage within the non-profit sector, as individuals with vested interests may at times make decisions that are not always in the best interests of the organization. This is why a conflict of interest policy is essential for non-profits.

The policy should be tailored to suit each organization’s individual requirements, and updated regularly in order to ensure it is effective. It should include clear definitions of what constitutes a conflict of interest and also address potential conflicts between board members, employees and volunteers. The consequences for violations should be made clear, as well as methods for disclosing any potential conflicts and preventing them from arising in the first place - such as prohibiting certain types of relationships between board members and employees.

At Genie AI, we believe this kind of policy can help protect an organization’s integrity by setting out expectations for its board members, employees and volunteers, which must then be enforced consistently. It is also important for maintaining accountability to stakeholders. Ultimately these policies are integral to the success of any non-profit organization - without them there may be risks associated with conflicts of interest that could potentially affect decision making processes or lead to serious issues down the line.

To assist you in drafting your own customized non-profit conflict of interest policy today, Genie AI provides free templates which have been derived from our extensive open source legal template library and millions of data points which together help inform our artificial intelligence on what constitutes market standard policies like this one. Our aim is simply to aid you in navigating through this potentially tricky process without having to pay lawyer fees - read on below for more detailed step-by-step guidance on how you can access our template library today!

Definitions (feel free to skip)

Conflict of Interest: A situation in which an individual’s personal interests could affect the decisions they make in their capacity as part of an organization.
Actual Conflict: A conflict of interest that exists when an individual has a direct personal interest that could influence their decision-making in their capacity with the organization.
Potential Conflict: A conflict of interest that exists when the individual might be influenced by the situation but there is no direct evidence of a conflict.
Policy: A set of rules and regulations that define how an organization should operate.
Prohibited Activity: An action or behavior that is not allowed according to a policy.
Disclosure: The act of making information or facts known to the public.
Compliance: Following a policy or set of rules.
Violation: An act that goes against a policy or set of rules.
Corrective Action: A course of action taken to address a problem or issue.

Contents

• Defining Conflicts of Interest
• This section will help board members and other stakeholders understand the different types of conflicts of interest that can arise in non-profit organizations. It will cover topics such as how to identify conflicts of interest, what types of conflicts of interest to look for, and how to distinguish between actual and potential conflicts of interest.
• Establishing a Conflict of Interest Policy
• This section will provide guidance on how to develop a conflict of interest policy that meets the needs of the organization. It will cover topics such as what should be included in the policy, how to communicate the policy to staff and stakeholders, and how to ensure compliance with the policy.
• Implementing the Conflict of Interest Policy
• This section will provide guidance on how to ensure the policy is implemented and enforced. It will cover topics such as how to monitor compliance with the policy, how to address any issues that arise, and how to provide resources and support staff to ensure the policy is followed.
• Training and Education
• This section will provide guidance on how to ensure staff and board members understand the conflict of interest policy, their responsibilities under the policy, and how to identify and report any potential conflicts of interest.
• Review and Evaluation
• This section will provide guidance on how to review and evaluate the policy on a regular basis. It will cover topics such as how to measure the effectiveness of the policy, how to make changes to the policy as needed, and how to ensure the policy remains up to date with any changes in the organization’s structure or operations.
• Monitoring Compliance
• This section will provide guidance on how to monitor compliance with the policy. It will cover topics such as how to identify potential conflicts of interest, how to investigate any potential conflicts of interest, and how to document all compliance activities.
• Reporting and Investigating
• This section will provide guidance on how to investigate and report any potential conflicts of interest. It will cover topics such as who is responsible for reporting any potential conflicts, who is responsible for investigating any potential conflicts, and how to ensure the proper procedures are followed when investigating any potential conflicts of interest.
• Addressing Violations
• This section will provide guidance on how to address any violations of the conflict of interest policy. It will cover topics such as how to determine the appropriate action to take in response to any violation, how to document any actions taken, and how to ensure the policy is enforced.
• Record Keeping
• This section will provide guidance on how to maintain accurate records of any conflicts of interest that arise. It will cover topics such as how to document all conflicts of interest, how to store records, and how to ensure the records are kept up to date.
• Establishing a Compliance Committee
• This section will provide guidance on how to establish a compliance committee to ensure the policy is implemented and enforced. It will cover topics such as how to appoint members to the committee, how to set up meetings, and how to ensure the committee is functioning properly.

Get started

Defining Conflicts of Interest

• Understand and define the different types of conflicts of interest that may arise in non-profit organizations
• Identify potential conflicts of interest and distinguish between actual and potential conflicts
• Develop a clear understanding of the ethical implications of conflict of interest
• Develop criteria for determining when a conflict of interest exists
• Document the criteria and the different types of conflicts of interest

You can check this off your list and move on to the next step when you have a clear understanding of the types of conflicts of interest that may arise in non-profit organizations, have identified potential conflicts of interest, and have documented the criteria for determining when a conflict of interest exists.

This section will help board members and other stakeholders understand the different types of conflicts of interest that can arise in non-profit organizations. It will cover topics such as how to identify conflicts of interest, what types of conflicts of interest to look for, and how to distinguish between actual and potential conflicts of interest.

• Identify the different types of conflicts of interest that can arise in non-profit organizations
• Understand how to identify conflicts of interest
• Identify the types of conflicts of interest to look for
• Distinguish between actual and potential conflicts of interest
• Utilize appropriate resources to stay up to date on conflict of interest regulations

You can check this step off your list when you have successfully identified and understood the different types of conflicts of interest that can arise in non-profit organizations, understand how to identify them, are aware of the types of conflicts of interest to look for, and can distinguish between actual and potential conflicts of interest.

Establishing a Conflict of Interest Policy

• Research and review laws and regulations that may affect the development of the conflict of interest policy.
• Identify the different types of conflicts of interest that may arise in the organization.
• Discuss and develop a list of procedures and rules regarding conflicts of interest.
• Develop a conflict of interest policy document that outlines the procedures and rules for dealing with conflicts of interest.
• Determine how the policy will be communicated to stakeholders and staff.
• Establish a system of checks and balances to ensure compliance with the policy.

When you can check this off your list and move on to the next step: When the conflict of interest policy document has been developed and communicated to stakeholders and staff, you can move on to the next step.

This section will provide guidance on how to develop a conflict of interest policy that meets the needs of the organization. It will cover topics such as what should be included in the policy, how to communicate the policy to staff and stakeholders, and how to ensure compliance with the policy.

• Research best practices and legal considerations to determine what should be included in the policy.
• Create a draft policy to review with stakeholders.
• Make any revisions or additions to the policy based on stakeholder feedback.
• Finalize the policy and make it available for staff and stakeholders.
• Establish a communication plan to ensure everyone is aware of the policy.
• Identify any training or resources that staff may need to understand and comply with the policy.
• Provide periodic updates on the policy to ensure staff and stakeholders remain informed.

You’ll know when you can check this off your list and move on to the next step when the final policy and communication plan have been established and all stakeholders have been notified.

Implementing the Conflict of Interest Policy

• Develop a system for tracking compliance with the policy
• Establish a process for reporting any violations of the policy
• Create mechanisms to ensure the policy is enforced fairly and consistently
• Clearly communicate the policy to staff and stakeholders
• Provide training and resources to support staff in following the policy
• Monitor compliance with the policy on an ongoing basis
• Address any issues that arise in a timely manner
• Review and update the policy as needed
• When all of the above are in place, the policy can be deemed successfully implemented.

This section will provide guidance on how to ensure the policy is implemented and enforced. It will cover topics such as how to monitor compliance with the policy, how to address any issues that arise, and how to provide resources and support staff to ensure the policy is followed.

• Create a plan to monitor compliance with the policy
• Establish a system to address any potential conflicts of interest that arise
• Develop resources (e.g., forms, templates, etc.) to support staff in following the policy
• Clearly communicate expectations to staff and volunteers on how to report potential conflicts
• Assign roles and responsibilities for staff to ensure the policy is enforced
• Provide training and education to staff and volunteers on the policy
• Identify and utilize available external resources for additional guidance
• Review the policy at least annually to ensure it remains up to date and relevant

When you can check this off your list and move on to the next step:

• When you have a plan in place to monitor compliance with the policy and address any potential conflicts of interest
• When you have communicated expectations to staff and volunteers on how to report potential conflicts
• When you have assigned roles and responsibilities to ensure the policy is enforced
• When you have provided training and education to staff and volunteers on the policy
• When you have identified and utilized available external resources for additional guidance
• When you have reviewed the policy at least annually to ensure it remains up to date and relevant

Training and Education

• Provide comprehensive training and education on the Non-Profit Conflict of Interest Policy to all staff and board members.
• Ensure that the training and education covers all aspects of the policy, such as definitions of conflicts of interest and the procedures for identifying and reporting potential conflicts.
• Make sure the training and education is tailored to the organization, its size, scope, and risk profile.
• Provide adequate resources and support staff to help staff and board members understand the policy and their responsibilities under it.
• Include interactive elements, such as quizzes, role-play activities, and group exercises, to help ensure understanding.
• Document all training and education activities and retain records of attendance.
• When training and education is complete and all staff and board members have been adequately informed of the Non-Profit Conflict of Interest Policy, the step can be considered complete.

This section will provide guidance on how to ensure staff and board members understand the conflict of interest policy, their responsibilities under the policy, and how to identify and report any potential conflicts of interest.

• Identify a conflict of interest policy that aligns with the mission and values of the non-profit organization.
• Provide education and training to all staff and board members on the conflict of interest policy.
• Require staff and board members to sign a statement acknowledging they have read and understand the policy.
• Develop a process for staff and board members to report potential conflicts of interest.
• Identify resources and/or personnel to review reported conflict of interests.
• Develop a process for resolving any conflicts of interest that arise.
• Document any resolutions reached and ensure proper follow-up has taken place.

You’ll know this step has been completed when all staff and board members have received training on the conflict of interest policy, and have acknowledged that they have read and understand the policy. You should also have a process in place for staff and board members to report any potential conflicts of interest.

Review and Evaluation

• Assign a staff member or board member responsible for monitoring conflict of interest policy
• Identify a timeline for reviewing and evaluating the policy
• Develop metrics to measure the effectiveness of the policy
• Identify any potential changes to the policy
• Develop a process to ensure the policy is regularly updated
• Create an evaluation form to document the review of the policy
• Track any changes to the policy
• Hold regular meetings to discuss any updates or changes to the policy
• Once the review and evaluation of the policy is completed, check off this step and move on to the next step in the guide.

This section will provide guidance on how to review and evaluate the policy on a regular basis. It will cover topics such as how to measure the effectiveness of the policy, how to make changes to the policy as needed, and how to ensure the policy remains up to date with any changes in the organization’s structure or operations.

• Assess the policy’s effectiveness by reviewing feedback from employees and making changes as needed.
• Conduct regular internal audits to make sure the policy is being followed.
• Monitor changes in the organization’s structure and operations to ensure the policy is up to date.
• Make changes to the policy as needed to reflect any changes in the organization’s operations or structure.
• Put together a timeline for regular review and evaluation of the policy.
• Consider the frequency of review and evaluation of the policy.
• Develop a plan to evaluate the effectiveness of the policy.
• Make sure the policy is being communicated to all employees.

You will know that you can check off this step and move on to the next step when you have assessed the policy’s effectiveness, conducted regular internal audits, monitored changes in the organization’s structure and operations, made changes to the policy when necessary, and put together a timeline for regular review and evaluation of the policy.

Monitoring Compliance

• Establish a system for regularly reviewing the policy and its implementation
• Establish a system for identifying potential conflicts of interest
• Establish a system for investigating potential conflicts of interest
• Establish a system for documenting compliance activities
• Set a timeline for checking the policy and for monitoring compliance
• Establish a process for making changes to the policy
• Establish a process for updating the policy to reflect changing organizational structure or operations
• Ensure that all relevant staff, board members, and volunteers understand the policy and their responsibility to adhere to it
• Ensure that policy is communicated to all stakeholders
• Set up a complaints procedure so that any concerns can be reported and addressed
• Once a system is in place, monitor compliance on a regular basis and take appropriate action when necessary
• At the end of the process, check off this step to indicate that the policy is being monitored and enforced.

This section will provide guidance on how to monitor compliance with the policy. It will cover topics such as how to identify potential conflicts of interest, how to investigate any potential conflicts of interest, and how to document all compliance activities.

• Establish a process for monitoring compliance with the policy. This should include documenting any potential conflicts of interest and investigating if necessary.
• Develop a system to track and document any compliance activities.
• Identify potential conflicts of interest, such as when a board member, employee, or volunteer has a financial interest in a relationship with the non-profit.
• Investigate any potential conflicts of interest thoroughly and document all findings.
• Develop a system for reporting any potential conflicts of interest.
• Ensure that all investigations are conducted in a timely manner and in accordance with the policy.
• Record all findings and take necessary action to address any potential conflicts of interest.
• Ensure that any necessary changes to the policy are implemented in a timely manner.

When you’ve established a process for monitoring compliance and developed a system to track and document any compliance activities, you can check this off your list and move on to the next step.

Reporting and Investigating

• Identify who is responsible for reporting potential conflicts of interest
• Establish a procedure for documenting and investigating potential conflicts of interest
• Review any potential conflicts of interest and determine whether it actually constitutes a conflict or not
• Document any potential conflicts of interest, including the process used to investigate them
• Establish a procedure for determining the resolution of potential conflicts of interest
• Ensure that the resolution of any potential conflicts is communicated to all relevant parties

When you can check this off your list:
You can check this step off your list when you have identified who is responsible for reporting potential conflicts of interest, established a procedure for documenting and investigating potential conflicts of interest, reviewed any potential conflicts of interest and determined whether it actually constitutes a conflict or not, documented any potential conflicts of interest, including the process used to investigate them, established a procedure for determining the resolution of potential conflicts of interest, and ensured that the resolution of any potential conflicts is communicated to all relevant parties.

This section will provide guidance on how to investigate and report any potential conflicts of interest. It will cover topics such as who is responsible for reporting any potential conflicts, who is responsible for investigating any potential conflicts, and how to ensure the proper procedures are followed when investigating any potential conflicts of interest.

• Identify who is responsible for reporting any potential conflicts of interest.
• Establish procedures for investigating any reported potential conflicts of interest.
• Ensure that all individuals who may be involved in investigating any potential conflict of interest are aware of the procedures and their roles; these may include members of the Board of Directors, executive staff, and other personnel.
• Determine how to document the investigation and its findings.
• Ensure that the investigation is conducted in a timely manner.
• When the investigation is complete, determine the appropriate action, such as revising the policy or taking disciplinary action.

How you’ll know when you can check this off your list and move on to the next step:
Once the investigation is complete and the appropriate action has been taken, you can move on to the next step of addressing any violations.

Addressing Violations

• Determine the appropriate action to take in response to any violation of the conflict of interest policy.
• Document any actions taken in response to any violation of the conflict of interest policy.
• Monitor any potential conflicts of interest and ensure the policy is enforced.
• Review the policy and update as necessary to ensure it reflects the current standards of the organization.

When you can check this off your list and move on to the next step:

• When you have determined the appropriate action to take in response to any violation, documented any actions taken, monitored any potential conflicts of interest, and reviewed and updated the policy as necessary.

This section will provide guidance on how to address any violations of the conflict of interest policy. It will cover topics such as how to determine the appropriate action to take in response to any violation, how to document any actions taken, and how to ensure the policy is enforced.

• Consider the nature of the violation, its impact, and the context in which it occurred in order to determine the appropriate course of action
• Document your decision and any action taken in writing
• Establish clear consequences for violations, such as suspension of board membership, monetary fines, or other appropriate measures
• Make sure all board members are aware of the policy, including the consequences for violations
• Implement a system of checks and balances to ensure that violations are reported and addressed in a timely manner
• Track and monitor violations to ensure the policy is effectively enforced

When you can check this off your list and move on to the next step:

• When you have established and documented clear guidelines for addressing violations of the conflict of interest policy, including consequences for violations and a system of checks and balances to ensure the policy is enforced.

Record Keeping

• Determine the appropriate record keeping system for your organization that is compliant with applicable laws and regulations
• Create forms to document any conflicts of interest that arise, including the date, parties involved, and resolution of the conflict
• Maintain accurate and up-to-date records of any conflicts of interest for easy access by staff and board members
• Establish a system for storing records, such as keeping digital copies in a secure file or having physical copies in a locked filing cabinet
• Put procedures in place to ensure all records are kept up-to-date and any changes are documented

You can check this step off your list once you have established a record keeping system and forms for documenting conflicts of interest, and set up a system for storing and maintaining records.

This section will provide guidance on how to maintain accurate records of any conflicts of interest that arise. It will cover topics such as how to document all conflicts of interest, how to store records, and how to ensure the records are kept up to date.

• Document any potential conflicts of interest through written disclosures
• Store the records in a secure and easily accessible location
• Ensure records are kept up to date by regularly reviewing the information
• Create a system to track and monitor any changes to the records
• Establish a process for how to review and resolve conflicts of interest

You can check this step off your list when you have created a system for storing and tracking conflicts of interest.

Establishing a Compliance Committee

• Designate members to the compliance committee, such as board members, staff, and volunteers.
• Have the board of directors or executive director appoint the members of the compliance committee.
• Establish a regular meeting schedule for the compliance committee and document the dates, times, and agenda items.
• Outline the roles and responsibilities of the compliance committee, such as reviewing and approving requests for conflicts of interest.
• Develop a system for collecting, organizing, and storing records of any conflicts of interest.
• You can check this off your list when the compliance committee is established and the roles, responsibilities, and meeting schedule are documented.

This section will provide guidance on how to establish a compliance committee to ensure the policy is implemented and enforced. It will cover topics such as how to appoint members to the committee, how to set up meetings, and how to ensure the committee is functioning properly.

• Appoint members of the compliance committee that are knowledgeable and have an understanding of the non-profit organization.
• Set up a regular schedule of meetings for the committee to review the organization’s conflict of interest policy and report any issues.
• Establish procedures for the committee to evaluate and assess potential conflicts of interest.
• Create a means of reporting any violations of the conflict of interest policy.
• Ensure that the committee is regularly monitoring the organization’s conflict of interest policy and taking action when necessary.

How you’ll know when you can check this off your list and move on to the next step:
Once the compliance committee is established, with members appointed, regular meetings scheduled, procedures in place, and a means of reporting violations, you can check this off your list and move on to the next step.

FAQ:

Q: What are the differences between conflict of interest policies in the UK, USA and EU?

Asked by Kyle on 15th April 2022.
A: Conflict of interest policies can vary significantly between countries, regions, and legal jurisdictions. In the UK, there are laws governing conflicts of interest which must be followed by non-profits, such as the Companies Act 2006, the Charities Act 2011 and the Bribery Act 2010. In the US, organisations may have to comply with a variety of different state laws as well as federal laws such as the Sarbanes-Oxley Act 2002 and the Foreign Corrupt Practices Act 1977. The EU has a number of regulations which must be followed by non-profits such as Regulation (EU) No 537/2014 on conflict of interest rules applicable to members of its executive bodies.

Q: How does a non-profit conflict of interest policy differ from other types of policies?

Asked by Sydney on 5th January 2022.
A: Non-profit conflict of interest policies are designed to prevent conflicts of interest that may arise for employees and volunteers working in a non-profit organisation. They typically aim to promote transparency and accountability within an organisation by making sure that any potential or actual conflicts of interest are managed appropriately. These policies may also include specific rules or guidelines relating to fundraising activities, procurement practices, and financial management. This type policy is distinct from other types of policies such as employment policies, which may include rules about employee conduct and behaviour or health and safety policies which cover matters such as workplace safety or pest control.

Q: What specific elements should be included in a non-profit conflict of interest policy?

Asked by Greg on 1st March 2022.
A: A non-profit conflict of interest policy should include several important elements such as clear definitions of what constitutes a conflict of interest, procedures for identifying, disclosing and managing conflicts of interest when they arise, and reporting requirements for those with potential conflicts. It should also state how employees and volunteers should behave when managing conflicts, such as avoiding activities which would place them in a position where their personal interests could influence their decisions. Additionally, it should outline appropriate disciplinary measures for those found to be in breach of the policy.

Q: Are there any industry-specific considerations when creating a non-profit conflict of interest policy?

Asked by Avery on 6th November 2022.
A: Yes, depending on the industry your non-profit operates within there may be additional considerations to take into account when creating your policy. For example, if your non-profit operates within the technology sector then you may need to consider data privacy implications when determining what constitutes a conflict of interest. Similarly, if you are operating in the B2B space then you would need to consider how your relationships with business partners could potentially create conflicts within your organisation. It is important to ensure that your policy takes into account any specific industry considerations relevant to your organisation so that it can adequately protect against potential conflicts of interest.

Q: What is the best way to ensure compliance with my non-profit’s conflict of interest policy?

Asked by Logan on 11th October 2022.
A: Ensuring compliance with your non-profit’s conflict of interest policy is essential in order to protect both your organisation and its members from potential conflicts. The best way to ensure compliance is through ongoing education and training for all stakeholders so that everyone is aware of what constitutes a conflict and how it should be managed if it arises. Additionally, all relevant stakeholders should have access to an updated version of the policy document so that they can refer to it whenever necessary. Finally, implementing regular audits or reviews will help ensure that any changes or updates to the policy are implemented correctly and that compliance is maintained throughout the organisation.

Example dispute

Lawsuit against a Non-profit Organization

• The plaintiff may raise a lawsuit against a non-profit organization if they believe there is a conflict of interest policy that has been violated.
• The plaintiff must provide evidence that the non-profit organization has breached its fiduciary duties, or acted in a manner that is not in the best interest of the organization.
• The plaintiff must also demonstrate that their rights were violated as a result of the breach of the conflict of interest policy.
• The lawsuit may seek damages, or it may seek an injunction that would force the organization to abide by its conflict of interest policy.
• In order to win the lawsuit, the plaintiff must demonstrate that the non-profit organization had a duty to act in the best interests of the public, and that they breached that duty.
• If damages are awarded, they may be calculated based on the financial loss suffered by the plaintiff, or any other harm caused by the breach of the conflict of interest policy.

Templates available (free to use)

Non Profit Conflict Of Interest Policy

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