Compliance guide
Nonprofit Conflict of Interest Policy Template
A nonprofit conflict of interest policy protects your charity's decisions from bias and is expected by funders and regulators, the IRS Form 990 even asks whether you have one. This guide gives you a free template written for boards and nonprofits, plus a done-for-you option.
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Key takeaways
- A nonprofit conflict of interest policy sets out how board members, officers and staff declare and manage personal interests that could clash with the organisation's mission.
- The IRS Form 990 asks whether your nonprofit has a written conflict of interest policy, so most US charities are expected to have one.
- It focuses on the board of directors and key decision-makers, who must recuse themselves from votes where they have an interest.
- It pairs with a declaration of interest form and a register of interests.
- Use the free template below, or have a tailored, ready-to-issue version done for you.
Why nonprofits need a conflict of interest policy
Nonprofits and charities are held to a high standard of public trust. A conflict of interest policy shows that board members and staff put the organisation's mission ahead of personal gain, and that decisions, especially about contracts, pay and related parties, are made fairly.
- Regulator and funder expectations, grant-makers and regulators commonly expect a written COI policy.
- Board governance, directors owe a duty of loyalty; the policy gives them a clear process to follow.
- Protecting your status, mishandled conflicts (e.g. self-dealing) can threaten a charity's standing and tax-exempt status.
The IRS Form 990 angle
US nonprofits that file Form 990 are asked whether they have a written conflict of interest policy, and whether officers, directors and key employees are required to disclose annually. While not strictly mandatory, a "yes" signals good governance to the IRS, funders and the public, which is why the IRS publishes a sample policy in the Form 1023 instructions.
A solid nonprofit policy therefore includes annual disclosure statements and a clear recusal process for the board, the things Form 990 effectively asks about.
What to include: nonprofit COI policy template structure
Adapt this outline to your organisation:
- Purpose, protecting the nonprofit's interest when a transaction or arrangement might benefit a board member or officer.
- Who it covers, directors, officers, key employees and committee members.
- Definition of a conflict, including financial interests and interests of family members or related businesses.
- Duty to disclose, the obligation to declare an interest before any discussion or vote.
- Recusal and decision process, how an interested person leaves the room and abstains from the vote.
- Determining fair arrangements, how the board decides a transaction is in the nonprofit's best interest.
- Annual disclosure statements, each covered person confirms they've read the policy and discloses interests.
- Records and minutes, documenting disclosures, recusals and decisions.
- Violations, what happens if someone fails to disclose.
- Review and approval, board adoption, ownership and review cycle.
Download the editable nonprofit COI policy template
Add your email and we'll send the nonprofit conflict of interest policy template along with an annual disclosure statement your board can adopt (Word and PDF).
How to implement your nonprofit COI policy
For nonprofits, adoption and annual disclosure are what regulators and funders look for.
- 1
Adapt it to your organisation
Match the covered persons and definitions to your structure and jurisdiction.
- 2
Adopt it at board level
Have the board formally approve the policy and record it in the minutes.
- 3
Collect annual disclosures
Ask every director, officer and key employee to sign a disclosure statement each year.
- 4
Follow the recusal process
When a conflict arises, the interested person leaves the discussion and abstains from the vote, and you minute it.
- 5
Keep a register
Maintain a register of interests and decisions for transparency and audits.
- 6
Review annually
Revisit the policy and disclosures each year, ahead of your Form 990 or equivalent filing.
Free template vs done-for-you document
If your board has the time, the free template is genuinely all you need. If you'd rather hand it over, here's what the done-for-you version adds.
| Free template | Done-for-you document | |
|---|---|---|
| Price | £0 | Fixed fee |
| Effort from you | A few hours editing | A short intake form |
| Fitted to your nonprofit | You write it in | Done for you |
| Annual disclosure statement | Basic sample | Tailored form |
| Ready for board adoption | You format it | Yes, adoption-ready |
| If it needs changes | You redo it | We revise it free |
Prefer your nonprofit COI policy done for you?
Tell us about your nonprofit and board, and we'll prepare a tailored conflict of interest policy and annual disclosure statement, written for adoption at your next board meeting.
Requests for the nonprofit conflict of interest policy are reviewed and prepared manually, we'll follow up by email.