The Catholic University of America

Summary of Federal Laws


Miscellaneous Tax Issues

Compliance Partners

Related Policies
Fraud and Financial Irregularities
Record Retention
Trustees Conflict of Interest
Conflict of Interest

IRS Good Governance for 501(c)(3) organizations and Governance Info Required on New Form 990

The IRS does not *require* that 501(c)(3) organizations have a conflict of interest policy, but commencing with the forms filed for Tax Year 2008, the IRS will be asking charities about their management and governance practices. The draft form dated December 2007 includes the following questions:

  • Does the organization have a written conflict of interest policy?
  • Does the organization have a written whistleblower policy?
  • Does the organization have a written document retention and destruction policy?

Also, if the organization answers yes to investing in or contributing assets to a joint venture, the form asks if there is a written policy to evaluate such participation.

See Part VI (B) of the Form 990 Core Form.

ACE has published a 501(c)(3) Due Diligence Form 990 Checklist that can be used by schools to ensure that the necessary policies and procedures to prevent compliance issues are in place. There is a list of recommended policies on this checklist, along with suggested procedures and committees.

See also the NASCO article titled: IRS Exempt Org Director Tells NASCO Members that IRS will maintain good governance questions on new 990.

As is noted in the first resource listed below, the law governing fiduciaries (case law) requires individuals who manage and govern organizations to exercise due care in administering the affairs of the organization. Also required is a duty of loyalty, which prohibits fiduciaries from using their position to obtain personal gain or gain for others at the organization's expense. A written conflict of interest policy helps fiduciaries adhere to these duties.

So while there is not currently a federal legal requirement* for a financial conflict of interest policy for the Board of Trustees, case law would seem indicate a written COI policy is the best way to enforce the law on fiduciary duty.

*Conflict of Interest Policies are required in other contexts, such as for institutions receiving research money from the National Science Foundation. See the NSF Fedlaw page.


Governance for a New Era: A Blueprint for Higher Education Trustees, issued August 2014 by the American Council of Trustees and Alumni

AGB Report on Board Responsibilities for Intercollegiate Athletics

Report issued by the Association of Governing Boards of Universities and Colleges (AGB).  The report summarizes a study conducted by AGB on the engagement of governing boards in the oversight of intercollegiate athletics. Fall 2012.

AGB Statement on External Influences on Colleges and Universities. August 2012.

IRS FAQ on Form 990 Filing Tips and Section on Governance

Association of Governing Boards of Universites and Colleges (AGB) and NACUBO Statement on the IRS Compliance Questionnaire for Colleges and Universities Published Dec. 17, 2009

IRS Governance and Tax-Exempt Organizations-Examination Materials Includes a checklist. (December 09)

Association of Governing Boards Dec. 2009 Statement on Conflict of Interest: This statement enunciates 12 principles college and university boards should consider in formulating policies.

IRS Sample Conflict of Interest Policy

Governance and Related Topics-501(c)(3) Organizations
Recommeded policies and practices from the IRS, posted Feb. 4, 2008. Covers mission, organizational documents, governing body, governance and management policies, financial statements and 990 Reporting, and transparency and accountability.

Alexander E. Dreier and Martin Michaelson, "A Guide to Updating the Board's Conflict of Interest Policy" (Association of Governing Boards of Colleges and Universities 2006).

For more governance resources, see the Sarbanes Oxley Fedlaw Page and the resources at the bottom of that page.


updated 12-29-17 links updated mlo