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Foundation Operations: Board Issues-> Board Policies-> Voting on Grants

Can board members vote on grants for organizations with which they have long histories or are intimately involved?

As noted in the Council on Foundation's Principles and Practices for Effective Grantmaking, “Beyond the legal requirements that forbid staff, board members and their families from profiting financially from any philanthropic grant, it is important that grantmakers weigh carefully all circumstances in which there exists the possibility of accusations of self-interest.”

Foundation boards often include representatives from grantseeking organizations. When a board must reach a decision about an organization or activity in which one of its members has an interest that represents an actual or apparent conflict, that member should be required to abstain from voting on those issues, and the meeting's minutes should state the board member abstained.

It is very important that foundations have written guidelines requiring full disclosure of all outside affiliations. Often, this begins as an article in the bylaws, and then is further detailed in a separate policy and supported with a disclosure statement. The bylaws, conflict-of-interest policy and a copy of the completed disclosure statement should all be included in the board policy and procedure manual.

A conflict of interest policy often includes the following components:

  • General statement of the foundation's values and commitment to avoiding any actual or potential conflicts of interest in grantmaking or business operations;

  • Requirements for what type of relationships or interests must result in disclosure;

  • Form of disclosure including how a disclosure of interests is to be made, when, and how often it should be updated;

  • Explanation of when to abstain from voting and how to so note in board minutes;

  • Explanation of when a board member should be required to excuse himself from a meeting;

  • Requirement that a board member must practice confidentiality of acquired information;

  • Statement that the policy will be reviewed annually; and

  • Policy will be implemented by the Governance or other designated committee.

The Health Care Foundation of Greater Kansas City is committed to the highest ethical standards in administration, governance, and grantmaking for itself and its grantees. The foundation's ethics policy requires board members and staff with a financial interest in any applicant organization to disclose that interest, and remove themselves from any discussions about the applicant. Board members cannot vote on any matter for which they have such an interest.

Related Information

Sample Ethics Policy - Health Care Foundation of Greater Kansas City (62K)
[download]

Sample Conflict of Interest Policy - Endowment for Health (56K)
[download]

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