Conflicts of Interest in Grantmaking

How to Use This Checklist

Use it before any meeting where grants will be decided, and again when you file the record. It covers board members and trustees, staff, panel members and family members who sit on a family fund's decisions.

A conflict of interest exists when someone can influence a decision that brings personal gain, or gain for a relative, through the organization's dealings. It is a risk that judgment about what the organization needs will be pulled off course by a second interest. The second interest can be financial, when someone could get money or something of value from the decision, or a matter of loyalty, when a duty to another person or organization could compete with the duty to this one.

A financial conflict still counts as a conflict even if the organization would get a good deal. That is why you can declare and defuse it early, before any harm. Disclosure is no cure on its own, though. The steps below ask for more than a declaration.

Declare Before You Discuss

• A standing agenda item for declaring conflicts opens every meeting where grants are decided.
• Each person was asked, before the first application was discussed, whether they have a conflict.
• Anyone with a personal conflict told the others early, before any discussion or decision.
• The declaration was made out loud, not left to the paperwork.
• The register of interests was in the room and was brought up to date if a new interest came out.

Step Out of the Decision

• The conflicted person left the relevant discussions, took no part in the decision or vote, and was not counted in the quorum.
• If you had no rule for managing conflicts, you wrote one before the meeting: the conflicted person leaves the discussion, does not vote and is not counted in the quorum.
• The conflicted person did not vote.
• The conflicted person was not counted in the quorum.

Check for Gain and Close Ties

• No one involved has received a kickback, a bribe, a substantial gift or special consideration linked to this decision.
• No one involved has a significant ownership stake in an applicant or in a firm that does business with you.
• No relative of anyone involved gains from the decision. A relative is anyone related by blood or marriage, or in a relationship similar to that.
• No relative of an official is being employed or paid for work for the organization.
• No one is dealing with themselves. Self-dealing is when the organization sells to, leases to, buys from or leases from an official, or buys goods from a business the official owns.
• No one's duty to another organization, such as an employer or another charity, competes with their duty to this one.
• If you run a private foundation in the United States, you have checked the rules on self-dealing with disqualified persons. Violations can bring excise taxes, including on a foundation manager who knowingly takes part.

Record It

• The record says what the conflict was.
• The record says who or what it affected.
• The record says when it was declared.
• The record says how it was managed.

If the Conflict Is Serious

A conflict is serious when a majority of the decision-makers share it, when a single member, such as a company or local authority, has a commercial interest in the decision, or when the decision carries significant money or risk and there is a conflict.

• You have decided whether the plan can change so the conflict no longer matters.
• You have considered asking a conflicted board member to resign.
• You have considered not appointing a conflicted person in the first place.
• You have considered adding members who are unaffected by the conflict.
• You have checked what the law where you work requires you to disclose.

Sign-Off

The chair, or an unaffected member if the chair is conflicted, signs to confirm that the conflicted person left the discussion, did not vote and was not counted in the quorum. File the signed page with the register. Trustees are legally responsible for managing conflicts by following the correct process, and this page is your proof of it.