Conflict of Interest Policy
Article I: Purpose
The purpose of this policy is to protect X-Road Connections Social Organization when it is contemplating a transaction or arrangement that might benefit the private interest of an officer or director. This policy is intended to supplement, but not replace, any applicable state and federal laws.
Article II: Definitions
1. Interested Person: Any director, principal officer, or member of a committee with governing board-delegated powers who has a direct or indirect financial interest.
2. Financial Interest: A person has a financial interest if they have, directly or indirectly:
• An ownership or investment interest in any entity with which the Organization has a transaction.
• A compensation arrangement with the Organization or any entity/individual the Organization deals with.
Article III: Procedures
1. 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 Board.
2. Determining Whether a Conflict Exists After disclosure and any discussion with the interested person, they shall leave the Board meeting while the determination of a conflict of interest is discussed and voted upon.
3. Procedures for Addressing the Conflict
• The Board shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction.
• The Board shall determine whether the Organization can obtain a more advantageous transaction with reasonable effort from a person or entity that would not give rise to a conflict of interest.
• If a more advantageous transaction is not possible, the Board shall determine by a majority vote of disinterested directors whether the transaction is in the Organization's best interest and is fair and reasonable.
Article III: Procedures
The minutes of the Board shall contain:
• The names of the persons who disclosed financial interests.
• The nature of the financial interest and the Board’s decision as to whether a conflict existed.
• The names of the persons who were present for discussions and votes.
Article V: Annual Statements
Each person covered by this policy shall annually sign a statement which affirms such person:
• Has received a copy of the policy.
• Has read and understands the policy.
• Has agreed to comply with the policy
Why this is vital for X-Road Connections
If our organization ever buys supplies from a board member's business or hires a member's relative, this policy provides the paper trail that proves the deal was fair. Without it, you risk "Private Inurement" penalties, which can lead to the IRS revoking your nonprofit status.
Annual disclosure form that board members would actually sign each year. It is designed to be signed by every board member of X-Road Connections during our first board meeting of the year.
1. Keep a "Conflict Folder": File these signed forms in a dedicated folder (digital or physical). When the IRS or an auditor asks if you "regularly and consistently monitor conflicts," this folder is your proof.
2. The "Family" Scope: Remind board members that "conflicts" usually include their spouse, children, and business partners.
3. Mid-Year Updates: If a board member starts a new business in July, they shouldn't wait until next year to disclose it. They should submit a new form immediately.
A Conflict of Interest Policy is our organization’s "ethical compass." It ensures that when a leader or member has a personal interest in a business deal, the organization’s mission—not their wallet—comes first.
The IRS specifically asks if you have this policy when you apply for 501(c)(3) status.
Annual Conflict of Interest Disclosure Form
Organization: X-Road Connections Social Organization
Fiscal Year: 2026
Part 1: Affirmation of Policy
I, _________________ the undersigned, hereby affirm that:
• I have received a copy of the X-Road Connections Conflict of Interest Policy.
• I have read and understand the policy in its entirety.
• I agree to comply with the policy at all times during my service.
• I understand that X-Road Connections is a nonprofit organization 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.
Part 2: Disclosure of Interests
Please check the appropriate box below and provide details where necessary.
[ ] I have NO conflicts to report. To the best of my knowledge, neither I nor any of my family members have a financial interest in, or a dual-loyalty relationship with, any entity that does business with or competes with X-Road Connections.
[ ] I HAVE potential conflicts to report. Please list any relationships, transactions, or positions you hold (as an owner, officer, employee, or volunteer) that could potentially result in a conflict of interest.
Entity/Company/Organization
Your Relationship (or Family Member's)
Nature of Potential Conflict
Example: Acme Printing
I am a 10% shareholder
Organization buys event flyers here
_________________________ _____________________ _____________________
Part 3: Gift & Gratuity Certification
I certify that during the past year, I have not accepted gifts, entertainment, or services of more than a nominal value ($50) from any person or entity that does business with or seeks to do business with X-Road Connections Social Organization.
Signature & Date
Name (Printed): ________________________________________________
Position/Title: _________________________________________________
Signature: ____________________________________________________
Date: _________________________