Bylaws of National Federation for Catholic Youth Ministry, Inc.

Article 10
Conflicts of Interest

Section 10.1. Purpose.
The Internal Revenue Service requires that 501(c)(3) organizations have a conflict of interest policy. The purpose of this conflict of interests policy includes but is not limited to: protecting the Federation's 501(c)(3) federal tax exempt status; making the best use of the Federation's charitable assets; supporting the board and executive director in carrying out their fiduciary responsibilities to the Federation; and to protect the Federation's best interests when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer, director, employee, team or project team member, interested person or insider of the Federation or its related Foundation or that might result in a possible excess benefit transaction or unreasonable compensation or other prohibited private inurement of the Federation's assets. This policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations. In connection with any actual or potential conflict of interest, any interested person has an affirmative duty to disclose the existence of the financial interest and any possible conflict of interest or the even the appearance of conflict of interest and shall disclose all material facts to the board and team considering the proposed transaction or arrangement. To facilitate avoidance of conflicts of interest and to avoid unreasonable compensation, the board shall implement a bidding procedure for all major contracts for goods and services.

Section 10.2. Procedures.
Any officer, director, employee, team or project team member, interested person or insider of the Federation or its related Foundation having an interest in a contract or other transaction or determination (all the foregoing referred to as “proposed arrangement”) presented to the board or team for recommendation, authorization, approval or ratification shall give a prompt, full and frank disclosure of her/his interest to the board and team prior to any action on the proposed arrangement. Any person having made a disclosure may make a presentation at a board meeting, but after the presentation, s/he shall leave the meeting during the discussion of and the vote upon the arrangement involving the potential conflict of interest, and such person may not be counted in determining the existence of a quorum. The board shall thereupon determine, by majority vote, whether the disclosure indicates that a conflict of interest exists or could reasonably be construed to exist and whether the arrangement is in the best interests of the Federation. If the board determines that a conflict of interest exists or could reasonably be construed to exist and/or that the arrangement is not in the best interests of the Federation, the board shall investigate alternatives to the proposed arrangement, and after exercising due diligence for example through invitations to bid that may include but shall not be limited to the vendor of the arrangement under review, the board shall determine whether the Federation can obtain with reasonable effort a more advantageous arrangement. After that due diligence, consistent with the quorum requirement in this section, the board shall determine by a majority vote of the disinterested voting directors whether the arrangement is in the Federation's best interest, whether it is fair and reasonable to the Federation, and whether to enter into the arrangement or some other more advantageous arrangement. The minutes of the meeting shall reflect the disclosure made, the vote thereon, the abstention from voting and participation by name, the content of the discussion, and whether the required quorum was present. Where the board discovers that an individual appears to have failed to make any mandatory disclosure, the board shall undertake appropriate due diligence investigation and any necessary disciplinary and corrective action.

Section 10.3. Annual Statements.
Each director, officer, employee and committee member shall annually sign a statement that affirms that such person has received a copy of the conflicts of interest policy, has read and understands the policy, agrees to comply with the policy, and understands that the Federation is a 501(c)(3) charitable organization and in order to maintain its federal tax exemption must engage primarily in activities that accomplish one or more of its tax exempt purposes and avoid prohibited private inurement of its assets.