With Congress and the media focusing on corporate governance and foundation administration, it is a good time to make sure that all grantmakers have a strong conflict of interest policy in place. Both private foundations and public charities (such as community foundations) should have clear guidelines on financial or other interests that must be disclosed and transactions that must be scrutinized or avoided. The policy should cover both board members and foundation staff. A robust conflicts policy can not only help a grantmaker stay on the right side of the law but can also keep the organization from engaging in behavior that gives even the appearance of conflict.
Section 501(c)(3) organizations are prohibited from engaging in activities that result in “inurement” of the organizations earnings to insiders, such as founders, directors and officers. The essence of inurement is that a person in a position to influence the decisions of an organization receives disproportionate benefits. Find questions and answers on common self-dealing snares such as sharing office equipment, employees and receiving free tickets and other tangible gifts.
In-Depth knowledge on Self-Dealing
This question regarding the permissibility of a corporate matching gift contribution to a public television station, when appreciation gifts are provided.
Can a company and its related private foundation share office equipment and supplies?
What should corporate foundations and the parent company consider when purchasing tickets to fundraisers?
Slide presentation reviewing the basics of self-dealing for family foundations.
Why do Council on Foundations membership materials and invoices state that if my foundation and corporate giving program share a membership, dues must be paid by the corporation? Is this true for other memberships as well?
Can a company provide office space to the company foundation?
How should the company foundation's grants and activities fit into the sponsoring company's efforts to develop strong relationships with government officials? Is it self-dealing for company lobbyists to mention the good works of the foundation? May foundation employees lobby legislators? Should foundation grantees play a role in promoting the interests of the sponsoring corporation?
This article explores one of the more common questions about conflicts of interest: May the foundation's lawyer serve as a trustee?