Conflict of Interest

The revised 990 asks not only about whether the nonprofit has a written conflict of interest policy, but also about the process that a nonprofit uses to manage conflicts and how the nonprofit determines whether board members have a conflict of interest.

• Minutes of board meetings should reflect when a board member discloses that s/he has a conflict of interests and how the conflict was managed. The minutes should describe that there was a discussion on the matter without the board member in the room and that when a vote was taken the “interested” board member (board members with a conflict are “interested” – board members without a conflict are “disinterested”) abstained. 
• A process used by many nonprofits to find out whether any board member (or staff member) has a conflict of interests, is to circulate an annual “conflict disclosure questionnaire” that asks board and staff members to disclose existing conflicts and reminds them to disclose any that may evolve in the future.

• View this Sample Conflict of Interest Policy and Annual Statement for nonprofit board members and committee chairs from the Montana Nonprofit Association. The policy includes a description of the process used every year for board members to review the policy and disclose any conflicts.

To help your organization with an annual disclosure process, the National Council has developed this Basic Conflict Questionnaire for Board members.