What type of activities could constitute a conflict of interest for a nonprofit organization?

A conflict of interest can occur when a nonprofit organization engages in activities that are not related to their mission, have the potential to benefit an individual or organization, or which could give the appearance of impropriety. Generally, any action that could appear to be in conflict with the mission of the nonprofit organization or its duty to act in the public’s best interests, or any activity that could be used to benefit private interests rather than those of the nonprofit itself, should be avoided. Some examples of activities that can constitute a conflict of interest include awarding contracts to family and friends, providing excessive benefits or salaries to employees or board members, using charitable donations for personal gain, and providing services, goods, or other resources to benefit someone who has a personal relationship to the organization or its Board of Directors. Nonprofit organizations should also be aware of potential conflicts of interest from outside sources such as vendors, contractors, or donors. A nonprofit should never accept donations or services from donors if it could influence the organization’s decision-making or put the organization in a position of appearing to be influenced by the donor. Nonprofit organizations in Indiana are expected to abide by the same laws and regulations as any other business. It is important for nonprofit organizations to be aware of laws that might create a conflict of interest and to work with their legal counsel to ensure that their activities comply with the law.

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What type of activities could constitute a conflict of interest for a nonprofit organization?

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