What is Self- Dealing?
“When a person is on both sides of a financial transaction, he or she is engaged in self-dealing. In a nonprofit organization, this may happen when the organization does business with a board member. The board member is in a position of influence within the organization, and he or she may be seen as obtaining personal benefit from a financial relationship.
Any business relationship involving board members, their relatives, or their employers should be handled with care as it may be perceived as a conflict of interest. A clear conflict-of-interest policy includes a requirement for board members to annually disclose personal and professional affiliations. It also sets forth a process to follow when considering a business relationship with a board member.
Self-dealing in itself is not illegal to all nonprofits. However, private foundations are strictly forbidden to engage in such activities, no matter how insignificant the monetary benefit. An excise tax can be imposed on those involved in the transaction.” For more on this subject go to Board Source
Disclaimer: LEAD for Pollinators, Inc. is not a CPA or attorney. For legal and accounting advice consult a licensed attorney or accountant.