Not-for-profit board directors, trustees and key employees must not have a direct or indirect financial interest in a transaction or arrangement that might benefit them personally. This is why nonprofits are required to have a written conflict-of-interest policy. To stress the importance of this requirement, the IRS asks you to acknowledge the existence of a policy on your annual Form 990. Your policy should define all potential conflicts and provide procedures for avoiding them. It’s also critical to outline the steps you’ll take if a possible conflict arises. Contact us for help crafting a thorough policy.