The RAHA is a nonprofit, tax-exempt organization. Maintenance of its tax-exempt status is important both for its continued financial stability and for public support. Therefore, the IRS as well as state regulatory and tax officials view the operations of RAHA as a public trust, which is subject to scrutiny by and accountable to such governmental authorities as well as to members of the public.
Consequently, there exists between RAHAand its board and officers and the public a fiduciary duty, which carries with it a broad and unbending duty of loyalty and fidelity. The board and its officers have the responsibility of administering the affairs of RAHA honestly and prudently, and of exercising their best care, skill, and judgment for the sole benefit of RAHA. Those persons shall exercise the utmost good faith in all transactions involved in their duties, and they shall not use their positions with RAHAor knowledge gained for their personal benefit. The interests of the organization must be the first priority in all decisions and actions.
SECTION 2. PERSONS CONCERNED:
This statement is directed to directors and officers, and any other parties who may play a role in the organization’s management. For example, this would include all who make purchasing decisions and anyone who has proprietary information concerning RAHA.
SECTION 3. AREAS IN WHICH CONFLICT MAY ARISE:
Conflicts of interest may arise in the relations of directors and officers with any of the following third parties:
1. Persons and firms supplying goods and services to RAHA. 2. Competing or affinity organizations. 3. Donors and others supporting RAHA. 4. Agencies, organizations. and associations which affect the operations of RAHA. 5. Family members, friends, and other employees. SECTION 4. NATURE OF CONFLICTING INTEREST:
A conflicting interest may be defined as an interest, direct or indirect, with any persons or firms mentioned in Section 3. Such an interest might arise through:
1. Owning stock or holding debt or other proprietary interests in any third party dealing with RAHA.
2. Holding office, serving on the board, participating in management, or being otherwise employed (or formerly employed) with any third party dealing with RAHA.
3. Receiving remuneration for services with respect to individual transactions involving RAHA.
4. Using RAHA’s time, personnel, equipment, supplies, or good will for other than RAHA-approved activities, programs, and purposes.
5. Receiving personal gifts or loans from third parties dealing or competing with RAHA. Receipt of any gift is disapproved except gifts of a value less than $50, which could not be refused without discourtesy. No personal gift of money should ever be accepted.
SECTION 5. INTERPRETATION OF THIS STATEMENT OF POLICY:
The areas of conflicting interest listed in Section 3, and the relations in those areas which may give rise to conflict, as listed in Section 4, are not exhaustive. Conflicts might arise in other areas or through other relations. It is assumed that the directors, officers, and management employees will recognize such areas and relation by analogy.
The fact that one of the interests described in Section 4 exists does not necessarily mean that a conflict exists, or that the conflict, if it exists, is material enough to be of practical importance, or if material, that upon full disclosure of all relevant facts and circumstances it is necessarily adverse to the interests of RAHA.
However, it is the policy of the board that the existence of any of the interests described in Section 4 shall be disclosed before any transaction is consummated. It shall be the continuing responsibility of the board and officers to scrutinize their transactions and outside business interests and relationships for potential conflicts and to immediately make such disclosures.
SECTION 6. DISCLOSURE POLICY AND PROCEDURE:
Transactions with parties with whom a conflicting interest exists may be undertaken only if all of the following are observed:
1. The conflicting interest is fully disclosed; 2. The person with the conflict of interest is excluded from the discussion and approval of such transaction; 3. The board or a duly constituted committee thereof has determined that the transaction is in the best interest of the organization.
Disclosure in the organization should be made to the President (or if she or he is the one with the conflict, then to the Vice President), who shall bring the matter to the attention of the Board of Directors.
The board of directors shall determine whether a conflict exists and in the case of an existing conflict, whether the contemplated transaction may be authorized as just, fair, and reasonable to RAHA. The decision of the board of directors on these matters will rest in their sole discretion, and their concern must be the welfare of RAHA and the advancement of its purpose.