Is this a conflict of interest?

I am the part-time director of a charity, and also have a business. Is it legal for my business to sell materials to the charity, if the Board approves the sale? Is it legal for the charity’s administration to demand that I donate the proceeds of the sale back to the charity?

Posted 07-13-2011

Ann Kiernan replies:

As long as you have fully disclosed your ownership interest in the supplier, and you are giving the charity a fair price for the goods you are supplying, the business arrangement sounds OK to me. The mandatory kickback-disguised as a donation-does not! Please run this idea by the charity’s legal counsel.

 

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.

2015-06-08T23:40:52+00:00

About the Author:

Ann Kiernan has litigated claims of wrongful discharge and discrimination before state and federal courts and administrative matters before the New Jersey Division on Civil Rights, the National Labor Relations Board and the Equal Opportunity Employment Commission, representing both employers and employees. Ms. Kiernan co-hosted The Employee Rights Forum, a weekly radio call-in show reaching up to a half-million listeners in the New York metropolitan area, and her articles on employment law have been published in many books and magazines. Both as a firm partner and as a director, Ms. Kiernan gained solid experience in management and human resources compliance. She has worked with Fair Measures since 1997.