Conflict of Interest Policy

A. Purpose:
The purpose of this conflict-of-interest policy is to protect the church’s interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of a church leader or member of the church, or might result in a possible excess benefit transaction. This policy is intended to supplement, but not replace, any applicable state or federal laws governing conflicts of interest applicable to nonprofit and charitable organizations.

B. Definitions

1. Interested Person: Any church leaders, 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 the person has, directly or indirectly, through business, investment, or family:

An ownership or investment interest in any entity with which the church has a transaction or arrangement;
A compensation arrangement with the church or with any individual or entity with which the church has a transaction or arrangement; or
A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the church is negotiating a transaction or arrangement.
A financial interest is not necessarily a conflict of interest. A person who has a financial interest may have a conflict of interest only if the board of directors decides that a conflict of interest exists.

3. Compensation: Direct and indirect remuneration, as well as gifts or favors that are not insubstantial.

4. Board: The pastor, deacons, and trustees will serve as the board to determine procedures for determining a possible conflict of interest.

C. 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 pastor, the deacons, and if applicable, members of committees with governing board-delegated powers considering the proposed transaction or arrangement.

2. Determining whether a Conflict of Interest Exists.
After disclosure of the financial interest & all material facts, including any presentations by & discussion with the interested person, he or she shall leave the board or committee meeting while the determination of a conflict of interest involving the transaction or arrangement is discussed. The pastor and deacon board shall decide if a conflict of interest exists.

3. Procedures for Addressing the Conflict of Interest

The chairman of the board shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
After exercising due diligence, the pastor or the board shall determine whether the church 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.
If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the pastor or the board shall determine whether the transaction or arrangement is in the best interests of the church, 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.

4. Violations of the Conflict-of-Interest Policy

If the pastor or the board 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 to disclose.
If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the board determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.