Nonprofit Conflict of Interest Policy Template

Conflict of Interest Policy: [Organisation name]

A written conflict of interest policy for a nonprofit or charity board, its committees, officers and senior staff: what counts as a conflict, who it covers, the annual disclosure, the declare, decide, recuse and record procedure, compensation decisions and breaches. The structure follows the elements the US IRS describes for Form 990 Part VI lines 12a to 12c (2025 instructions) and the sample policy in Appendix A of the Instructions for Form 1023 (Rev. 12/2024), with notes for the four-step approach of the Charity Commission for England and Wales. The example organisation, Brackenfold Reading Trust, is fictional. Replace every [bracketed] value and every row marked Example. This is a documentation format, not legal advice: check your governing document, the current official texts and a qualified adviser in your jurisdiction.

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Revision history

1. Purpose

This policy protects [Organisation name] when it considers a transaction, arrangement or decision that might benefit the private interest of a board member, officer, committee member or senior employee, or a person or organisation connected to them. It makes sure that decisions are taken only in the organisation's best interests, that interests are disclosed openly, and that the record shows how each conflict was handled. It supplements, and does not replace, the law that applies to the organisation and its governing document.

2. Who the policy covers

A connected person includes a covered person's spouse or partner, children, parents, siblings and their spouses or partners, any business in which the covered person or a family member holds [more than 5% Example] of the shares or is a director, partner or employee, and any other organisation they serve as a board member or officer.

3. What counts as a conflict

A financial interest exists when a covered person or connected person, directly or indirectly, has an ownership or investment interest in, a compensation arrangement with, or is negotiating either with, an entity or individual with which the organisation has or is negotiating a transaction. Gifts and favours above [USD 100 Example] a year from such a party count as compensation for this policy.

A loyalty conflict exists when a covered person's duty to another body or person (an employer, another charity, the body that appointed them, a friend or relative) could compete with their duty to this organisation, even with no money involved.

A financial interest is not automatically a conflict of interest. The disinterested board members decide whether a conflict exists (section 6, step 3).

4. Duties of covered persons

Each covered person must:

1. Disclose any actual or possible conflict as soon as they become aware of it, and before the matter is discussed.
2. Give the board or committee all material facts it needs to decide.
3. Not try to influence the decision, formally or informally.
4. Keep their entry in the register of interests up to date within [30 Example] days of a change.
5. Ask the chair or secretary when unsure, rather than deciding alone that an interest is irrelevant.

5. Annual disclosure and register of interests

Each covered person completes the declaration in Annex A on appointment and every [January Example], and confirms that they have read this policy. The secretary keeps the register of interests at [location or system], reports any missing declaration to the chair within [30] days, and presents the updated register to the board at the [first meeting of the year]. A covered person who has not returned a declaration does not vote until they do.

6. Procedure at meetings

1. Standing item. Every board and committee agenda opens with "Declarations of interest".
2. Declare. The interested person states the interest and the material facts.
3. Decide whether a conflict exists. The interested person leaves the room (or the virtual meeting) while the remaining members discuss and vote on whether a conflict exists.
4. Consider removing it. Where possible, avoid the conflict: for example, ask a different supplier to quote, or let the interested person step back from the related role.
5. Manage it. If a conflict exists, the interested person may give a short factual presentation if invited, then leaves for the discussion and the vote. The chair may appoint a disinterested person or committee to look at alternatives. The disinterested members decide, by majority, whether the transaction is in the organisation's best interests, fair and reasonable, and whether a better arrangement is reasonably available without a conflict.
6. Quorum. The interested person does not count towards the quorum for that item. If the quorum fails, [defer the item / refer it to the chair's committee / seek regulator consent where required].
7. Record. The minutes follow section 7.

7. Records

For each declared interest the minutes record: the person, the nature of the interest, whether the board found a conflict, who was present for the discussion and the vote, the alternatives considered, the decision and the vote count, and the steps taken to manage the conflict. Minutes are approved by the later of the next meeting or [60] days after the meeting. The secretary updates the conflicts log:

8. Compensation decisions

• No covered person votes on their own pay, benefits or expenses, or on those of a connected person.
• A member who receives pay or other payments subject to approval by the person whose pay is under review does not vote on that pay.
• The [remuneration committee / board] uses comparability data for similar roles and records the data and the decision at the time.
• Payment of any board member for serving as a board member happens only where the governing document and the law allow it.

9. Breaches

If the board has reasonable cause to believe that a covered person has failed to disclose an actual or possible conflict, the chair informs the person of the basis for that belief and gives them a chance to explain. After hearing the response and any further enquiry, the board decides whether a breach occurred and what corrective action to take: for example, a formal note, removal from a committee, a request to step down, or a review of the affected transaction. Serious matters are reported to the regulator where the law requires.

10. Annual statements and periodic review

Each year the [governance committee] checks that every declaration was returned, that every conflict in the log was minuted, and that transactions with connected parties were at fair value and approved under section 6. It reports to the board, which reviews this policy at least every [two] years. Outside advisers may help with reviews; the board keeps responsibility.

11. Jurisdiction notes

Annex A. Annual declaration form

I confirm that I have read and understood the Conflict of Interest Policy, that the information above is complete and accurate, and that I will update it within [30] days of any change.

Signed: [Name] Date: YYYY-MM-DD

12. Related templates

• Board minutes for the declarations of interest item and recusal record
• Board governance calendar to schedule the annual declarations and policy review
• Gift acceptance policy for gifts from connected persons
• Conflicts of interest policy and register for investment firms under MiFID II and SEC rules
• Whistleblowing policy for reporting undeclared conflicts

Glossary

• Covered person: anyone listed in section 2.
• Connected person: a family member, business or organisation linked to a covered person (section 2).
• Disinterested member: a board or committee member with no financial interest or loyalty conflict in the matter.
• Recusal: leaving the discussion and the vote on a matter.
• Register of interests: the living list of declared interests (section 5).

Standard and licence note

Based on the US IRS Instructions for Form 990 (2025), Part VI lines 8, 12a to 12c and 15, and the structure of the sample conflict of interest policy in Appendix A of the Instructions for Form 1023 (Rev. 12/2024), which says it prescribes no specific requirements; with notes from the Charity Commission for England and Wales guidance "Managing conflicts of interest in a charity" (2020, Open Government Licence v3.0). The text, thresholds and fictional Brackenfold examples are original. Check the current official texts, your governing document and a qualified adviser before adoption. Template licence: MIT.