Attorneys, accountants, and other professionals can contribute valuable expertise to a board. In the best-case scenario, it would be nice if their services would be given voluntarily. However, that is not always feasible.
The underpinnings of the policy that allows tax exemption for public charities is that the dollars raised are used for “exclusively charitable and educational” purposes. The IRS wants to be sure that none of the tax-exempt dollars raised by the nonprofit inure to the benefit of directors. The prohibition against private gain steers us away from hiring “interested persons” to conduct services in exchange for a fee. That said, it is possible to address the apparent conflict of interest you describe by following the Conflict of Interest Policy your board has adopted.
When making the determination whether to “hire” a board member to conduct a service for a fee, the board should be guided by the question: What is in the best interest of the organization?
You can address the conflict by:
- Raising it with the board;
- Discussing the conflict without the participation of the interested person;
- Voting about the conflict without the vote of the “interested person,” and recording that process in the minutes.
It is common for the “interested person” to offer the services at, or below, market rate, which helps the board demonstrate the value to the organization. All of this assumes the board has determined the service provider meets a reasonable standard of competence in the field and will provide the assistance the organization needs.
In most instances, there is nothing unlawful about an organization transacting business with an insider. The fact that a conflict exists does not necessarily mean that the organization shouldn’t proceed with a specific action or transaction. Rather, what is important in these circumstances is assuring that such transactions are scrutinized to determine whether the action or transaction is in the best interests of the organization. Generally, a conflicts policy will use a combination of “disclosure” and “independent review and approval” to evaluate potential conflicts. Also note that even if your organization properly follows your conflict of interest policy, contracting with a board member could raise questions in the community. Generally, if you wouldn’t want to read about it in the newspaper, don’t do it.
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Desde el Estándares para la Excelencia®: Código ético y de rendición de cuentas para el sector no lucrativo. El código de las Normas de Excelenciadesarrollado por el Standards for Excellence Institute, incluye puntos de referencia y medidas específicas que proporcionan un enfoque estructurado para crear capacidad, responsabilidad y sostenibilidad en su organización sin ánimo de lucro. El código identifica 6 áreas principales de gobierno y gestión de las organizaciones sin ánimo de lucro: Misión, Estrategia y Evaluación; Liderazgo: Consejo, personal y voluntarios; Cumplimiento legal y ética; Finanzas y operaciones; Desarrollo de recursos y recaudación de fondos; y Concienciación pública, compromiso y responsabilidad.
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El Instituto Standards for Excellence®, un programa de Maryland Nonprofits, proporciona los mejores recursos posibles a las organizaciones sin ánimo de lucro de todo el país, ayudándolas a desarrollar su capacidad para satisfacer de forma eficaz y eficiente las necesidades de sus comunidades. Los miembros de Maryland Nonprofits tienen acceso a una comunidad en línea con una amplia biblioteca de recursos y plantillas personalizables. La afiliación a Maryland Nonprofits está diseñada para ayudarle a recaudar más dinero, desarrollar su junta directiva, establecer relaciones, aprender, ahorrar en las cosas que necesita para dirigir su organización y amplificar su voz en Annapolis. Únase hoy mismo.
