The purpose of the conflict of interest policy is to protect SOAR, Inc.’s interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of the Organization or might result in a possible excess benefit transaction. This policy is intended to supplement but not replace any applicable state and federal laws governing conflicts of interest applicable to nonprofit and charitable organizations.
Definitions
Interested Person
Any director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person.
Financial Interest
A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:
An ownership or investment interest in any entity with which the Organization has a transaction or arrangement,
A compensation arrangement with the Organization or with any entity or individual with which the Organization has a transaction or arrangement, or
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.
Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
A financial interest is not necessarily a conflict of interest. Under Section 3, Paragraph 2, a person who has a financial interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exists.
Procedures
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.
Determining Whether a Conflict of Interest Exists
After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she 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.
Procedures for Addressing the Conflict of Interest
a. An interested person may make a presentation at the governing board or committee meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest.
b. The chairperson of the governing board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
c. 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.
d. 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. In conformity with the above determination, it shall make its decision as to whether to enter into the transaction or arrangement.
Violations of the Conflicts of Interest Policy
a. 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.
b. If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the governing board or committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
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.
Compensation
a. A voting member of the governing board who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member’s compensation.
b. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member’s compensation.
c. No voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization, either individually or collectively, is prohibited from providing information to any committee regarding compensation.
Annual Statements
Each director, principal officer and member of a committee with governing board delegated powers shall annually sign a statement which affirms such person:
a. Has received a copy of the conflicts 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.
Periodic Reviews
To ensure the Organization 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 conform to the Organization’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.
SOAR Conflict of Interest Policy Statement
(Revised 12-1-08)
Purpose
Each private, nonprofit entity eligible to receive State funds is required to have a policy that addresses conflict of interest that may arise when members of its governing body or managing staff are involved in the disbursement of State funds; and requires the private, nonprofit entity to file with the agency that disburses State funds a notarized copy of its conflict of interest policy before any State funds can be disbursed to the entity. The policy shall address situations where any of these individuals may directly or indirectly benefit. The policy shall include actions to be taken by the entity or the individual, or both to avoid conflicts of interest and the appearance of impropriety.
Accordingly, no member or board member of the private, nonprofit entity may receive directly or indirectly, any funds received from the State of North Carolina, except for duly, authorized staff compensation and benefits, and reimbursement for expenses actually incurred in connection with the private, nonprofit entity’s business and in accordance with final approved grant agreements.
Policy
WHEREAS, SOAR, Inc. requires its Board of Directors and managing employees to avoid conflicts of interest or the appearance of impropriety in the disbursement of State funds;
THEREFORE, no member of the Board of Directors or staff members of said private, nonprofit entity shall participate in the solicitation, negotiation, formation, award, arbitration, modification, or settlement of any contract or grant funded in whole or in part by State funds or of any dispute arising under such contract or grant when the director or staff members stands to benefit, either directly or indirectly, from such grant or contract;
PROVIDED, no member of the Board of Directors or staff members shall be deemed to benefit directly or indirectly from any contract or grant funded in whole or in part by State funds if he/she receives only the salary or stipend due to him/her in the normal course of employment with, or service to, said private, nonprofit entity.
FURTHERMORE, said private, nonprofit entity has written conflict of interest policies and reporting procedures applicable to board members, staff members and volunteers who have any interest or any authority regarding the resources of the private, nonprofit entity. These policies have been communicated to board members, staff members and volunteers and full disclosure has been provided for any possible appearance of conflict of interest that may exist.
Conflict of Interest Checklist
The following serves to identify and document any personal interest staff members, officers, and members of the Board of Directors may have. This document is also to be used to disclose any transactions that may result in personal, financial, professional and/or political gain at the expense of SOAR, Inc. The statement requires all personal relationships that may inappropriately influence actions be disclosed. Relationships, be it personal, financial, professional and/or political are required to be disclosed to SOAR, Inc. Conflict means a conflict or the appearance of a conflict between the private interests and official responsibilities of a person in a position of trust. Persons in a position of trust include staff members or the Board.
Private, nonprofit entities shall make full disclosure by notice in writing to the full Governing Board/Council all conflicts of interest, if “yes” is answered to any of the following:
- A Board member is related to a staff member.
- A staff member in a supervisory capacity is related to another staff member whom he/she supervises.
- A staff member is related to another staff member.
- A board member or staff member has or may have personal, financial, professional, and/or political gain at the expense or benefit of the private, nonprofit entity (other than salary or stipends due in the normal course of employment.)
- There is a business entity in which a staff, board, or family member participates that may be viewed as having direct or indirect influence over the private, nonprofit entity’s business.
- A staff, board, or family member may be viewed as having direct or indirect financial gain from personal or business investments/interest in real property held by that staff, board, or family member.
- A staff or board member received honorarium or other compensation outside of the scope of employment / operations with the private, nonprofit entity that creates or appears to create bias.
- A staff or board member secured employment with a competitor or other similar private, nonprofit entity.
- Ongoing, paid consulting work outside of the staff member’s current employment or board member’s with your private, nonprofit entity exists.
If you have answered, “yes” to any of the aforementioned items you are required to provide details for any transaction that exists.
If this statement fails to list a transaction that may exist that is non-financial in nature, please attach details.
Details must include at least the name, and, address, or persons involved, and a description of the relationship and the transaction.
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