Gainesville Fisher House Foundation, Inc

Conflict of Interest Policy

June 5, 2021

 Adopted by the Board of Directors on this date.

 Overview

 1.           Purpose

The purpose of this Conflict of Interest and Compensation Policy (the “policy”) is to protect the Corporation’s interests when it is considering taking an action or entering into a transaction that might benefit the private interests of a director, officer or key person, result in the payment of excessive compensation to a director, officer or key person; or otherwise violate state and federal laws governing conflicts of interest applicable to nonprofit, charitable organizations.

This conflict-of-interest policy is designed to foster public confidence in the integrity of the Gainesville Fisher House Foundation and to protect the Organization’s interest when it is contemplating entering a transaction (defined below) that might benefit the private interest of a director, a corporate officer, the top management or top financial official, or a key employee (defined below).   [Note to Organization:  Compliance with this Sample Policy A will not insure compliance with Code Section 4958 or CCC Section 5233 or 9243.  Although the range of interests covered by this policy may be broader than those covered by law, the range of covered persons is more narrow.  Additional procedures may apply to transactions covered by Code Section 4958 or CCC Section 5233 or 9243.]  

 The following are considered insiders for the purposes of this policy:

 1.           Each member of the Board of Directors or other governing body.

 2.           The president, chief executive officer, chief operating officer, treasurer and chief financial officer, executive director, or any person with the responsibilities of any of these positions (whether or not the person is an officer of the Organization under the Organization’s Bylaws and the Florida Corporations Code).

 3.           Any key employee, meaning an employee whose total annual compensation (including benefits) from the organization and its affiliates is more than $150,000 and who (a) has responsibilities or influence over the organization similar to that of officers, directors, or trustees; or (b) manages a program that represents 10% or more of the activities, assets, income, or expenses of the organization; or (c) has or shares authority to control 10% or more of the organization’s capital expenditures, operating budget, or compensation for employees.

Interest means any commitment, investment, relationship, obligation, or involvement, financial or otherwise, direct or indirect, that may influence a person’s judgment, including receipt of compensation from the Organization, a sale, loan, or exchange transaction with the Organization.

 A conflict of interest is present when, in the judgment of the Board of Directors, an insider’s stake in the transaction is such that it reduces the likelihood that an insider’s influence can be exercised impartially in the best interests of the Organization.  

 Transaction means any transaction, agreement, or arrangement between an insider and the Organization, or between the Organization and any third party where an insider has an interest in the transaction or any party to it: “Transaction does not include compensation arrangements between the Organization and the Executive Director or employees that may work for the foundation which is covered under our compensation agreement.

Procedures

 1.         Duty to Disclose

 Each insider shall disclose to the Board all material facts regarding his or her interest in the transaction, promptly upon learning of the proposed transaction.

 2.         Determining Whether a Conflict of Interest Exists

With regard to an insider, the Board shall determine if a conflict of interest exists.  The insider(s) and any other interested person(s) involved with the transaction shall not be present during the Board’s discussion or determination of whether a conflict of interest exists, except as provided below. 

2.           Why is a policy necessary?

1. As a nonprofit, charitable organization, the Corporation is accountable to both government agencies and members of the public for responsible and proper use of its resources. Directors, officers, and employees have a duty to act in the Corporation’s best interests and may not use their positions for their own financial or personal benefit.

 2. Conflicts of interest must be taken very seriously since they can damage the Corporation’s reputation and expose both the Corporation and affiliated individuals to legal liability if not handled appropriately. Even the appearance of a conflict of interest should be avoided, as it could undermine public support for the Corporation.

 3.           To whom does the policy apply?

This policy applies to all directors, officers, and key persons. 

 1.       Narrow Range of Covered Persons.  The policy is narrow in terms of covered persons; it applies to officers, directors, and key employees ONLY.  It does not cover all insiders that are disqualified persons under Code Section 4958, and it does cover key employees using the definition from the Form 990 Instructions (which is not part of Code Section 4958).  This range of coverage may be appropriate for an organization that wishes to have in place a conflict of policy that meets the minimum requirements necessary to answer “Yes” to Lines 12a-c of Part VI.B, or an organization that wishes to have a separate conflict of interest policy that meets allows it to answer “Yes” to these questions, and separate policies that set forth the policy and procedure for dealing with the conflicts of interests of other persons.

 2.  Broad Range of Covered Interests.  The policy is broad in scope; it applies broadly to all interests potentially affecting a person’s judgment, not just financial and not just those regulated by federal tax law or state corporate law.  Some organizations will prefer a narrower scope, focusing only on interests and transactions that are regulated by law.

3.  Covered Transactions and Relationships.  While the policy is designed to pick up many transactions and relationships to be disclosed on Form 990, it may not reach all of them.  An organization may need a more detailed disclosure form to collect all the information requested on other parts of current or future versions of Form 990.

4.  Disclosure of Family Relationships.  The form limits disclosure of family members to those presenting a specific potential conflict.  Please be aware that the IRS may want names of all listed relatives.  Be aware that, pending clarification by the IRS, not listing all relatives may not be sufficient disclosure to answer “Yes” to Part VI.B, Line12c.

 5.  Prior Transactions Not Addressed.  This policy does not address the approval process for past transactions that have already occurred or commenced.

 6.  Statutory Compliance Not Guaranteed.  Compliance with this sample policy does not guarantee compliance with Code Section 4958 or other applicable rules of law, including Florida state corporate law.

 7.  The Board of Directors as Arbiter of Conflicts.  This policy assumes that the Board of Directors will be the arbiter of conflicts, and not a committee of the Board.

Procedures for Addressing a Conflict of Interest

 The Board shall follow the procedures set forth above in order to decide what measures are needed to protect the Organization’s interests in light of the nature and seriousness of the conflict, to decide whether to enter into the transaction and, if so, to ensure that the terms of the transaction are appropriate.      

 Review by the Board

The Board may ask questions of and receive presentation(s) from the insider(s) and any other interested person(s), but shall deliberate and vote on the transaction in their absence.  The Board shall ascertain that all material facts regarding the transaction and the insider’s conflict of interest have been disclosed to the Board and shall compile appropriate data, such as comparability studies, to determine fair market value for the transaction. 

After exercising due diligence, which may include investigating alternatives that present no conflict, the Board shall determine whether the transaction is in the Organization’s best interest, for its own benefit, and whether it is fair and reasonable to the Organization; the majority of disinterested members of the Board then in office may approve the transaction.

 Records of Proceedings

 The minutes of any meeting of the Board pursuant to this policy shall contain the name of each insider who disclosed or was otherwise determined to have an interest in a transaction; the nature of the interest and whether it was determined to constitute a conflict of interest; any alternative transactions considered; the members of the Board who were present during the deliberations on the transaction, those who voted on it, and to what extent interested persons were excluded from the deliberations; any comparability data or other information obtained and relied upon by the Board and how the information was obtained; and the result of the vote, including, if applicable, the terms of the transaction that was approved and the date it was approved.

Annual Disclosure and Compliance Statements

 Each director, each corporate officer, the top management official, the top financial official, and each key employee of the Organization, shall annually sign a statement on the form attached, that:

 •            affirms that the person has received a copy of this conflict-of-interest policy, has read and understood the policy, and has agreed to comply with the policy; and

 •            discloses the person’s financial interests and family relationships that could give rise to conflicts of interest.

Violations                   

          If the Board has reasonable cause to believe that an insider of the Organization has failed to disclose actual or possible conflicts of interest, including those arising from a transaction with a related interested person, it shall inform such insider of the basis for this belief and afford the insider an opportunity to explain the alleged failure to disclose.  If, after hearing the insider’s response and making further investigation as warranted by the circumstances, the Board determines that the insider has failed to disclose an actual or possible conflict of interest, the Board shall take appropriate disciplinary and corrective action. 

Annual Reviews

To ensure that the Organization operates in a manner consistent with its status as an organization exempt from federal income tax, the Board shall authorize and oversee an annual review of the administration of this conflict-of-interest policy.  The review may be written or oral.  The review shall consider the level of compliance with the policy, the continuing suitability of the policy, and whether the policy should be modified and improved.