Giving an example of a conflict of interest is easy enough to do, but I’ve finally encountered a perfect example of a non-financial conflict of interest in my own life. Up until now, my examples were more academic and based on examples of other peoples’ lives.
Disclaimer: I intentionally scheduled this post out into the future so that hopefully the situation is resolved or it has escalated to a point where it is fine that I discuss it publicly. Therefore, this is not an ongoing situation, but it was written in present tense.
What is a Conflict of Interest?
The IRS says “A conflict of interest occurs where individuals’ obligations to further the organization’s charitable purposes is at odds with their own financial interests.” Though this is the IRS’s definition, not all conflicts are purely financial. They can occur any time a person can use their position of power to benefit themselves at the cost of the organization or others.
The obvious example I always use is when a board member has the opportunity to vote on pay increases or whether the organization will hire that board member’s company. In either of those scenarios, that board member aims to financially benefit from their own decision making power within the organization.
Even if the outcome would be the same, it’s important for organizations to identify and eliminate potential conflicts, usually by forcing any interested person to abstain from the decision making process where they may benefit.
My Scenario
My scenario is a non-financial conflict of interest. In my situation, I am the fundraising chair of my daughter’s preschool. My roll is to raise funds solely for the scholarship and inclusion fund, a fund established to help families who (1) cannot afford to attend this preschool or (2) need additional classroom or school-wide aids to help them succeed at the school. The vast majority of this fund goes to scholarships for lower income families.
I fully support this fund. I ran for this board position solely because of my strong belief in its benefit to the school and the children who attend.
However, a situation came up that puts me at odds. For some reason, this preschool has a situation where kids going from my daughter’s grade to the next level are not guaranteed a spot because there aren’t enough for everyone in that class. This is somewhat unheard of for good reason. It’s a disservice to the children to split them up if they want to stay with their friends. Unfortunately, they cut my daughter from the roster. How do you explain this to a two-year-old?
This situation is heartbreaking for our family as this means even though we’re on the waitlist, we have to prepare for the possibility that our daughter will not be staying with her friends next year. It takes her a while to warm up to new situations and new people, so starting over somewhere new where the other kids already know each other is going to be hard for her.
Why is this a Conflict of Interest?
Now, this situation is a conflict because I found out that 3 families that are enrolled for next year receive scholarship and cannot attend if there’s not enough money in the fund for them to attend. This puts me in the position where if I don’t do my job well, a spot will open up for my daughter. However, if I meet the goals set by the board, the odds my daughter will be able to attend go down significantly.
Conclusion
In conclusion, not all conflicts are financial in nature. I hope this example helps you better understand what these can look like. If you find yourself in this boat, I’d recommend you also address it immediately. It’s best to reveal any potential conflicts. Did I address this conflict immediately? Yes, I notified the board and director of my situation. Will that help? We’ll see.
On a personal note, I would never do anything to harm another child’s education or health and wellbeing. This situation put me in such a terrible spot. It was important to me to get guidance from the board.
Weirdly, this preschool does not have a conflict of interest policy. According to their rules, I was under no obligation to report this to them. However, reporting protects me and the preschool should anyone question the situation. This is one of many things this preschool needs to update going forward. They’re working on that as I type this article. Hopefully this scenario won’t happen to anyone else.
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