Recovery Plus Foundation - Conflict of Interest Policy

 

A. Purpose: The purpose of the conflict of interest policy is to protect Recovery Plus Foundations purpose and income tax status when it is contemplating entering into a transaction or arrangement that might benefit the private interest of a board member, officer, employee, committee member or other person or organization that may be associated or non-arms length with the Recovery Plus Foundation 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 charitable organizations.

 B. Definitions:

Interested Person: Any board member, employee or member of a committee with governing board delegated powers, who has a direct or indirect financial interest.

Arm's length: An arm's length standard exists where the parties have an adverse (or opposing) interest. For example, a seller wants to sell his goods at the highest possible price, while a buyer wants to buy at the lowest possible price. These are adverse interests. In negotiating with a person, an adverse interest is assumed if that person is otherwise unrelated to you in the sense of not being in a position to exercise substantial influence.  If a person is in a position to exercise substantial influence over your affairs, then an arm's length standard requires additional precautions and the related procedures as set out in this policy.

Fair market value: This is the price at which property or the right to use property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy, sell, or transfer property or the right to use property, and both having reasonable knowledge of relevant facts.

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 Recovery Plus Foundation has a transaction or arrangement, a compensation arrangement or with any entity or individual that Recovery Plus Foundation has a transaction or arrangement. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which Recovery Plus Foundation 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. A person who has a financial interest may have a conflict of interest only if the board decides that a conflict of interest exists.

C. Conflict of Interest Procedures:

(i) Duty to Disclose: In connection with any actual or possible conflict of interest, an interested person must disclose the existence of any financial interest and be given the opportunity to disclose all material facts to board members and members of committees with governing board delegated powers considering the proposed transaction or arrangement.

 (ii) 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, they shall leave the board meeting 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 exists.

 (iii) Procedures for Addressing the Conflict of Interest: An interested person may make a presentation at the governing board or committee meeting, but after the presentation, they shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest. 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. 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. If a more advantageous transaction or arrangement are 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 board members whether the transaction or arrangement is in the best interest of Recovery Plus Foundation and its' purpose, 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.

 (iv) Violations of the Conflicts of Interest Policy: If the governing board or committee has reasonable cause to believe a board or committee 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 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.

D. Records of Proceedings: The minutes of the governing board and all committees with board delegated powers shall contain:

- 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

 - the governing boards or committees decision as to whether a conflict of interest in fact existed.

 - 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 the proceedings.

E. Compensation: In the event that a voting board member, employee, or any other non-arms length party receives compensation, directly or indirectly, from Recovery Plus Foundation for wages or services, they are precluded from voting on matters pertaining to that member's compensation. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from Recovery Plus Foundation for services is precluded from voting on matters pertaining to that member's compensation. No voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from Recovery Plus Foundation, either individually or collectively, is prohibited from providing information to any committee regarding compensation. Physicians, psychiatrists and psychologists who receive compensation from Recovery Plus Foundation, whether directly or indirectly or as employees or independent contractors, are precluded from membership on any committee whose jurisdiction includes compensation matters. No physician, either individually or collectively, is prohibited from providing information to any committee regarding physician, psychiatrists or psychologists compensation.

F. Annual Statements: Each board member and member of a committee with governing board delegated powers shall annually sign a statement which affirms such person:

 -They have received a copy of the conflicts of interest policy,

- They have read and understand the policy,

- They agree to comply with the policy, and

-They understand 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.

G. Periodic Reviews: 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:

- Whether compensation arrangements and benefits are reasonable, based on competent survey information and the result of arm's length bargaining.

- 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.

H. Use of Outside Experts: When conducting the periodic reviews, Recovery Plus Foundation may 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. The annual financial statement of Recovery Plus Foundation shall be compiled by a Certified Public Accountant as engaged by the board.

 
"SIGNED" by each Director