A conflict of interest policy is essential to have in place for both governance (board of directors) and management to mitigate personal interests from competing with those of the nonprofit. Such a policy is so significant that it is one of only a handful of policies the IRS requires organizations to report on their Form 990, whether or not the policy has been adopted.
A conflict of interest policy should be written and should identify the organization’s process to identify conflicts of interest, as well as the process to oversee any conflicts of interest. A typical component of a conflict of interest policy is the annual completion of a conflict of interest disclosure form, and review of the forms at a board meeting.
Now is as good a time as any to ensure your nonprofit has adopted and is staying up to date with its conflict of interest policy.