CATS Conflict of Interest Policy

APOGAEA INC. ("Apogaea") is a 501(c)(3) tax-exempt nonprofit charitable corporation.

In the spirit of the Burning Man event, Apogaea establishes a temporary autonomous zone where radical self-expression, inclusiveness, and self-reliance are the hallmarks of its participants.  To this end, the organization shall maintain a community that cultivates interest in and pursuit of art, music, and artistic expression, to provide, advise, educate, and cooperate with the active members in all matters pertaining to the welfare of the organization, to contribute to charitable organizations, and to buy, own, hold, lease, sell and convey such real or personal property as may be necessary or desirable in carrying out the full purpose of the corporation. All funds, whether income or principal, and whether acquired by gift or contribution or otherwise, shall be devoted to said purposes.

What is the Purpose of a Conflict of Interest Policy?  

This Conflict of Interest Policy is intended to help ensure that when actual or potential conflicts of interest arise, the organization has a process in place under which the affected individual will always advise the Board of Directors about all the relevant facts concerning the situation.  This Conflict of Interest policy is also intended to establish procedures under which individuals who have a conflict of interest will be excused from voting on such matters.

The IRS explains:  

"Charitable organizations are frequently subject to intense public scrutiny, especially where they appear to have inappropriately benefited their officers, directors, or trustees.  The IRS also has an oversight role with respect to charitable organizations.  An important part of this oversight is providing organizations with strategies that will help avoid the appearance or actuality of private benefit to individuals who are in a position of substantial authority."  Having a "conflict of interest policy is a strategy we encourage organizations to adopt as a means to establish procedures that will offer protection against charges of impropriety involving officers, directors, or trustees.  A conflict of interest occurs where individuals’ obligations to further the organization’s charitable purposes is at odds with their own financial interests.  For example, a conflict of interest would occur where an officer, director, or trustee votes on a contract between the organization and a business that is owned by the officer, director or trustee. Conflicts of interest frequently arise when setting compensation or benefits for officers, directors, or trustees. . . . (emphasis added)  Apart from any appearance of impropriety, organizations will lose their tax-exempt status unless they operate in a manner consistent with their charitable purposes. Serving private interests more than insubstantially is inconsistent with accomplishing charitable purposes. For example, paying an individual who is in a position of substantial authority excessive compensation serves a private interest.  Providing facilities, goods, or services to an individual who is in a position of substantial authority also serves a private interest unless the benefits are part of a reasonable compensation arrangement or they are available to the public on equal terms and conditions." http://www.irs.gov/charities/article/0,,id=139515,00.html

Defined Terms.

A “Conflict of Interest” occurs where an individual's obligation to further the organization’s charitable purposes is or might be at odds with their own financial interests.   

“Interested Person” means either:

Any director, officer, member of a Board Committee that exercises the authority of the Board, Executive Director(s), or member of Apogaea's leadership team who has a direct or indirect Financial Interest as defined below; or

Any brother, sister, mother, father, son, daughter, spouse, brother-in-law, sister-in-law, son-in-law, daughter-in-law, mother-in-law, or father-in-law of any such person.  For the purposes of this Conflict of Interest Policy, a half-sister or half-brother is included in this definition.  Nieces, nephews and cousins are not included in this definition.  

For the purposes of this Conflict of Interest Policy, a brother, half-brother, brother-in-law, sister, half-sister, sister-in-law, mother, mother-in-law, father, father-in-law, son, son-in-law, daughter, daughter-in-law, or spouse is considered to be "Related."

Anyone in a position to make decisions about spending or using Apogaea’s resources or assets, who also stands to benefit from that decision, is an Interested Person for purposes of this Conflict of Interest Policy.

A person has a “Financial Interest” if the person that has, directly or indirectly, through business, investment, or by being Related:

An ownership or investment interest in any entity with which Apogaea has a transaction or arrangement;

A direct or indirect "Compensation" arrangement with Apogaea or with any entity or individual with which Apogaea has a transaction or arrangement, including a landlord/tenant arrangement, including but not limited to being compensated by the organization for services rendered to it within the past four (4) months, whether as an employee or independent contractor or consultant; any person to whom rent, mortgages or other monies are being paid; or any major supplier of goods for money; or

A potential ownership or investment interest in, or Compensation arrangement with, any entity or individual with which Apogaea is negotiating a transaction or arrangement; and

Compensation includes direct and indirect remuneration in money, in-kind, as well as substantial gifts, entertainment, trips, loans, or favors.  "Substantial" for the purposes of this Conflicts of Interest Policy means that the gift, entertainment, trips, loans or favors offered have a fair market value of over five hundred dollars ($500.00).  Where it would be awkward for you to decline a proffered Substantial gift, it should be accepted on behalf of the Apogaea and a Apogaea Vice-President should be consulted as to its disposition.  Compensation does not include reimbursement of reasonable expenses to an Interested Person for out-of-pocket costs incurred in connection with serving Apogaea.  It is permissible to accept insubstantial gifts, meals and social invitations that are in keeping with good business ethics and do not obligate the recipient to take or refrain from taking any action or decision on behalf of Apogaea.  

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 of Directors or Board Committee responsible for determining conflict of interest decides that a conflict of interest exists.  For the purposes of this Conflicts of Interest Policy, and because it is expected that Directors will make personal appearances on behalf of and representing  Apogaea from time to time, it is here deemed that it is not a conflict of interest for a Director to receive personal appearance honorariums or fees, travel, lodging and/or meals when:

representing  Apogaea on official business; and

when such personal appearances and travel are arranged through and by Apogaea; and

the Director is working on assignment for Apogaea; and

the personal appearance fees, honorariums and the like are paid to Apogaea, even when Apogaea then pays part of all of those fees over to the Director.

Duty to Disclose and How to Disclose Potential or Actual Conflicts of Interest 

In connection with any actual or possible conflict of interest, an Interested Person must disclose the existence of the Financial Interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers to consider the proposed transaction or arrangement.  If you wonder if something is a conflict, or might be seen as a conflict, then the best practice is simply to disclose it.  The "mantra" or "rule of thumb" that should guide all participants' transactions involving Apogaea, or use of its name or resources is DISCLOSURE, DISCLOSURE, DISCLOSURE.

Anyone in a position to make decisions about spending or using Apogaea’s resources – who also stands to benefit from that decision – has a duty to disclose that conflict as soon as it arises.  Full disclosure, including all material facts, shall be made by an Interested Person as soon as they become aware of a potential or actual conflict of interest.  That disclosure shall be made in writing to the Board President, who will pass the disclosure on to the entire Board or Board Committee responsible for assessing conflicts of interest; or such disclosure may be made orally to the Apogaea Board of Directors or Board Committee responsible for assessing conflicts of interest.  

There exists a potential conflict of interest whenever there is any exchange of money, property, contacts, or connections between an Interested Person and Apogaea.  For purposes of this Conflict of Interest policy, Apogaea is meant to include Apogaea's directors, officers, employees, sponsors, funders, major donors, independent contractors, affiliated or subsidiary organizations, and others with whom Apogaea has a contractual relationship (actual or in negotiation) ("Apogaea's Community").  Potential conflicts that must be disclosed include but are not limited to the following:

Apogaea is considering entering into a contract between the organization and a business that is owned by an Interested Person.

A Apogaea Director is Related to another person with a Financial Interest.

A Apogaea employee in a supervisory capacity is Related to another employee or independent contractor whom they supervise.

A Apogaea Director or their company or a different organization on whose Board that Director also sit may benefit from a Apogaea transaction; or a staff member of a Director's company or organization receives payment from Apogaea for any subcontract, goods, or services.

A Director's company, organization, or project receives grant funding from Apogaea.

A Director's company or organization receives rental or any other payments from Apogaea.

A Director or employee is also a member of the governing body (such as its Board of Directors) of another company or organization that is a contributor of over $100,000.00 to Apogaea.

An Interested Person, such as a Apogaea Director or employee, desires to start a separate private project or company or to assist others in a project or a company that wants to recruit Apogaea participants to be involved in the new project or company; or wants to hire Apogaea employees or independent contractors to work in the new company; when doing so would take time, contracts, money or other resources away from Apogaea.

A Director or Board Committee member whose personal financial interests could be positively or adversely affected by Apogaea accepting, holding, or disposing of a particular gift from a donor or by knowledge of the gift.

 No Director or Board Committee member, or any member of his/her family should accept any gift, entertainment, trips, service, loan, or promise of future benefits from any person or company that might benefit or appear to benefit from such Director's or Committee member’s connection with Apogaea, unless the facts of such benefit, gift, entertainment, trip, service, or loan are disclosed in good faith and are authorized by the board. Board and committee members are expected to work out for themselves the most gracious method of declining gifts, entertainment, and benefits that do not meet this standard.

Anytime that it comes to the attention of any staff person, director, or Board Committee member, formally or informally, that there exists any transaction or other dealings that could pose a potential conflict of interest, then:

A staff person must bring the potential or actual conflict to the Executive Director(s) attention, and the Executive Director(s) must do a reasonably thorough investigation of the facts.  If the Executive Director(s) determine that there exists an actual or potential conflict of interest, the Executive Director(s) must bring that to the Board President's attention.

A Director or Board Committee member must bring the potential or actual conflict to the Board President's attention, and the Board President must delegate a director or the Executive Director(s) to do a reasonably thorough investigation of the facts and report back to the Board President.  

If the person(s) delegated to investigate the facts determine that there exists an actual or potential conflict of interest, the Board President must bring that to the attention of the Board Committee responsible for assessing conflicts of interest, or to the Board's attention for discussion and a decision about whether or not it is an actual conflict of interest, and if so, what should be done about it.

Discussion and Voting on the Conflicted Transaction.  Directors must insist upon full disclosure and must take formal action to vote on conflicted transactions.  Simply discussing potential or actual conflicts of interest, without bringing the matter to a formal vote is not sufficient.  

The Board or Board Committee discussing the matter may ask the Interested Person who has a potential or actual conflict of interest to attend the discussion and allow them to be heard.  Then the Interested Person shall leave the meeting while the determination of a conflict of interest is discussed and voted upon.  

Following full disclosure of the Financial Interest and all material facts, the Apogaea Board of Directors or Board Committee responsible for assessing conflicts of interest shall discuss the matter and determine whether a conflict of interest exists.  

It shall do so by a majority vote without counting the vote of any Interested Person, even if the disinterested directors are less than a quorum provided that at least one consenting director is disinterested.  The conflicts disclosure and the Board's discussion and decision about it must be included in the written meeting minutes where the discussion takes place.

Procedures for Addressing the Conflict of Interest.  If it is determined that a Conflict of Interest exists, then the following steps shall be taken:

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 is 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 directors whether the transaction or arrangement is in the Organization's best interest, 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.

Violations of the Conflicts of Interest Policy.  If the board or governing committee has reasonable cause to believe that an Interested Person has failed to disclose actual or possible conflicts of interest, it shall inform the Interested Person of the basis for such belief and afford that person an opportunity to explain the alleged failure to disclose.  If, after hearing the Interested Person'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 or corrective action.

Records of Proceedings.  The minutes of the governing board and all committees with board delegated powers that discuss the actual or potential conflict of interest 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, and the governing board's or committee's 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.

Compensation.  

A director or member of a Board committee that exercises the authority of the Board who receives compensation, directly or indirectly, from Apogaea for services is precluded from voting on matters pertaining to that director's compensation.

A member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from Apogaea for services is precluded from voting on matters pertaining to that person's compensation.

Directors and Board committee members will be forthcoming with the Board and its committees concerning compensation.

This Conflicts Policy will be Signed.  A copy of this policy shall be given to all directors, staff members, volunteers or other key stakeholders upon commencement of such person's relationship with Apogaea or at the official adoption of stated policy.  Each Director, officer, staff member, and volunteer shall sign and date the policy at the beginning of their term of service or employment and each year thereafter.  Failure to sign does not nullify the policy.

I understand the policy above and will report any conflict of interest immediately:

First and Last Name (printed):__________________________________________________________________________

Signature: ___________________________________________________________________________________

Date: ___________________