CONFLICT OF INTEREST POLICY
TEACHING & SHARING CENTERS
February 28, 2005
The purpose of the conflict of
interest policy is to protect this tax-exempt organization's
(Organization) interest when it is contemplating entering into a
transaction or arrangement that might benefit the private interest
of an officer or director of the Organization or might result in a
possible excess benefit transaction. This policy is intended to
supplement but not replace any applicable state and federal laws
governing conflict of interest applicable to nonprofit and
Any director, principal officer, or member of a committee with
governing board delegated powers, who has a direct or indirect
financial interest, as defined below, is an interested person.
A person has a financial interest if the person has, directly or
indirectly, through business, investment, or family:
a. An ownership or investment interest in any entity with which the
Organization has a transaction or arrangement,
b. A compensation arrangement with the Organization or with any
entity or individual with which the Organization has a transaction
or arrangement, or
c. A potential ownership or investment interest in, or compensation
arrangement with, any entity or individual with which the
Organization is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as
gifts or favors that are not insubstantial.
A financial interest is not necessarily a conflict of interest.
Under Article III, Section 2, a person who has a financial interest
may have a conflict of interest only if the appropriate governing
board or committee decides that a conflict of interest exists.
Duty to Disclose.
In connection with any actual or possible conflict of interest,
an interested person must disclose the existence of the financial
interest and be given the opportunity to disclose all material facts
to the directors and members of committees with governing board
delegated powers considering the proposed transaction or
Determining Whether a
Conflict of Interest Exists. After disclosure of
the financial interest and all material facts, and after any
discussion with the interested person, he/she shall leave the
governing board or committee meeting while the determination of a
conflict of interest is discussed and voted upon. The remaining
board or committee members shall decide if a conflict of interest
Addressing the Conflict of
a. An interested person may make a presentation at the
governing board or committee meeting, but after the presentation,
he/she shall leave the meeting during the discussion of, and the
vote on, the transaction or arrangement involving the possible
conflict of interest.
b. The chairperson of the governing board or committee shall, if
appropriate, appoint a disinterested person or committee to
investigate alternatives to the proposed transaction or arrangement.
c. After exercising due diligence, the governing board or committee
shall determine whether the Organization can obtain with reasonable
efforts a more advantageous transaction or arrangement from a person
or entity that would not give rise to a conflict of interest.
d. If a more advantageous transaction or arrangement is not
reasonably possible under circumstances not producing a conflict of
interest, the governing board or committee shall determine by a
majority vote of the disinterested directors whether the transaction
or arrangement is in the Organization's best interest, for its own
benefit, and whether it is fair and reasonable. In conformity with
the above determination it shall make its decision as to whether to
enter into the transaction or arrangement.
Violations of the Conflicts
of Interest Policy.
a. If the governing board or committee has reasonable cause to
believe a member has failed to disclose actual or possible conflicts
of interest, it shall inform the member of the basis for such belief
and afford the member an opportunity to explain the alleged failure
b. If, after hearing the member's response and after making further
investigation as warranted by the circumstances, the governing board
or committee determines the member has failed to disclose an actual
or possible conflict of interest, it shall take appropriate
disciplinary and corrective action.
Records of Proceedings
Minutes. The minutes of the governing
board and all committees with board delegated powers shall contain:
a. The names of the persons who disclosed or otherwise were found to
have a financial interest in connection with an actual or possible
conflict of interest, the nature of the financial interest, any
action taken to determine whether a conflict of interest was
present, and the governing board's or committee's decision as to
whether a conflict of interest in fact existed.
b. The names of the persons who were present for discussions and
votes relating to the transaction or arrangement, the content of the
discussion, including any alternatives to the proposed transaction
or arrangement, and a record of any votes taken in connection with
a. A voting member of the governing board who
receives compensation, directly or indirectly, from the Organization
for services is precluded from voting on matters pertaining to that
b. A voting member of any committee whose jurisdiction includes
compensation matters and who receives compensation, directly or
indirectly, from the Organization for services is precluded from
voting on matters pertaining to that member's compensation.
c. No voting member of the governing board or any committee whose
jurisdiction includes compensation matters and who receives
compensation, directly or indirectly, from the Organization, either
individually or collectively, is prohibited from providing
information to any committee regarding compensation.
Each director, principal officer and member of
a committee with governing board delegated powers shall sign a
statement which affirms such person:
a. Has received a copy of the conflicts of interest policy,
b. Has read and understands the policy,
c. Has agreed to comply with the policy, and
d. Understands the Organization is charitable and in order to
maintain its federal tax exemption it must engage primarily in
activities which accomplish one or more of its tax-exempt purposes.
To ensure the Organization operates in a
manner consistent with charitable purposes and does not engage in
activities that could jeopardize its tax-exempt status, periodic
reviews shall be conducted. The periodic reviews shall, at a
minimum, include the following subjects:
a. Whether compensation arrangements and benefits are reasonable,
based on competent survey information, and the result of arm's
b. Whether partnerships, joint ventures, and arrangements with
management organizations conform to the Organization's written
policies, are properly recorded, reflect reasonable investment or
payments for goods and services, further charitable purposes and do
not result in inurement, impermissible private benefit or in an
excess benefit transaction.
Use of Outside Experts
When conducting the periodic
reviews as provided for in Article VII, the Organization may, but
need not, use outside advisors. If outside experts are used, their
use shall not relieve the governing board of its responsibility for
ensuring periodic reviews are conducted.