Policy 1 Governance, Organizational Values & Ethical Conduct
Section 1.3 Conflict of Interest
The purpose of the conflict of interest policy is to protect the UNG Foundation by identifying and properly managing all conflicts of interest and appearances of a conflict of interest. This policy is intended to supplement, but not replace, any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.
Interested Person – Any trustee, 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 Foundation has a transaction or arrangement.
- A compensation arrangement with the Foundation or with any entity or individual with which the Foundation has a transaction or arrangement, or
- A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Foundation 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. A person who has a financial interest may have a conflict of interest only if the Executive Committee decides that a conflict of interest exists, in accordance with this policy.
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 Executive Committee.
Recusal of Self – Any trustee, principal officer, or member of a committee with governing board delegated powers, may recuse him or herself at any time from involvement in any decision or discussion in which the individual believes he or she has or may have a conflict of interest, without going through the process for determining whether a conflict of interest exists.
Determining Whether a Conflict of Interest Exists – After the interested person discloses the potential conflict of interest and all related material facts and after any discussion, the interested person shall leave the board or committee meeting (if applicable) while the determination of a conflict of interest is discussed and voted upon. The Executive Committee members shall decide if a conflict of interests exists.
Procedures for addressing the Conflict of Interest -
- An interested person may make a presentation at the 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.
- The Chairman of the Board of Trustees shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
- After exercising due diligence, the Executive Committee shall determine whether the Foundation 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.
- If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the Executive Committee shall determine whether the transaction or arrangement is in the Foundation’s best interest and benefit, and whether it is fair and reasonable. In conformity with the above determination, the Executive Committee shall make its decision as to whether to enter into the transaction or arrangement.
Violations of the Conflicts of Interest Policy
If the Executive Committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the interested person of the basis for such belief and afford the individual an opportunity to explain the alleged failure to disclose.
If, after hearing the interested person’s response and after making further investigation as warranted by the circumstances, the Executive Committee determines the individual has failed to disclose an actual or possible conflict of interest, it shall take appropriate corrective action.
RECORDS OF PROCEEDINGS
The meeting minutes of the Board of Trustees and all Committees with board-delegated powers shall contain:
- 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 Executive Committee’s decision as to whether a conflict of interest in fact existed.
- 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.
A voting member of the Board of Trustees who receives compensation, directly or indirectly, from the Foundation for services is precluded from voting on matters pertaining to that member’s compensation.
A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Foundation for services is precluded from voting on matters pertaining to that member’s compensation.
No voting member of the Board of Trustees or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Foundation, either individually or collectively, is prohibited from providing information to any committee regarding compensation.
ANNUAL DISCLOSURE STATEMENTS
Each trustee, principal officer and member of a committee with board delegated powers shall annually sign a Conflict of Interest Disclosure Form (see Appendix) which affirms such person:
- Has received a copy of the conflict of interest policy,
- Has read and understands the policy,
- Has agreed to comply with the policy, and
- Has an understanding that the Foundation is a charitable organization which, in order to maintain its federal tax exemption, must engage primarily in activities, which accomplish one or more of its tax-exempt purposes.
If at any time during the year, the information in the annual statement changes materially, the individual shall disclose such changes and revise their annual conflict of interest disclosure form.
The Executive Committee shall regularly and consistently monitor and enforce compliance with this policy by reviewing annual disclosure forms and taking such other actions as are necessary for effective oversight.
To ensure the UNG Foundation 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:
- Whether compensation arrangements and benefits (if any), meet the IRS Rebuttable Presumption requirements:
- The compensation arrangement must be approved in advance by an authorized body of the applicable tax-exempt organization, which is composed of individuals who do not have a conflict of interest concerning the transaction,
- Prior to making its determination, the authorized body obtained and relied upon appropriate data as to comparability, and
- The authorized body adequately and timely documented the basis for its determination concurrently with making that determination.
- Whether partnerships, joint ventures, and arrangements with management organizations (if any), conform to the Foundation’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and do not result in inurement or impermissible private benefit or in an excess benefit transaction.
When conducting the periodic reviews, the UNG Foundation may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the Board of Trustees of its responsibility for ensuring periodic reviews are conducted.
This policy is based on the IRS model conflict of interest policy, which is an attachment to Form 1023.