As nonprofits that have filled out the new 990 have found out, the IRS has started asking about a number of governance policies – a conflict of interest policy being one of them. Just having a conflict of interest policy isn’t enough, though, as the Form 990 also asks whether:
- Officers, directors or trustees, and key employees annually disclose interests, and;
- An organization regularly and consistently monitors and enforces compliance with the policy.
Now, it’s important to state that the IRS isn’t requiring a conflict of interest policy that meets these two points – they’re just asking about it. However, the new Accountability Standard around conflict of interest policies has been tweaked to reflect both of these points. To meet the new standard an organization would have to have an annual disclosure and consistently enforce the policy.
This, of course, begs the question, what does “regularly and consistently monitor and enforce compliance” mean? This is something we’re wrangling with and thought it might be interesting to get other people’s opinions on. Comments?
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