Purpose
All employees are expected to conduct their activities in such a way to avoid any appearance of, or actual, loss or embarrassment to the Foundation that might arise from improper influence on the Foundation’s business decisions or from disclosure or private use of information regarding the Foundation’s business affairs or plans. The purpose of this Policy is to protect the interests of the Foundation and to provide guidelines for handling perceived, potential or actual conflicts of interest.

Covered Individuals
All employees of the Foundation are covered by this Policy. Please note: Foundation Trustees, Officers, and Board Committee Members are covered by a separate conflict-of-interest policy.

For the purposes of this Policy, “family or family member” is defined as any member of the employee’s family (spouse, parent, sibling, child, stepchild, grandparent, grandchild, great-grandchild, in-law or domestic partner).

Covered Transactions
This Policy covers any transactions that constitute a conflict of interest or a duality of interest, both of which are described below. Before taking any action that may constitute a possible conflict of interest or duality of interest, please discuss it with the Director of Human Resources or the Vice President of Finance/Treasurer; they are authorized to provide reliable interpretations of this Policy. 

Actions Considered a Conflict of Interest
In general terms, a conflict of interest may occur if an outside interest or activity:  (i) influences, appears to influence or has the potential to influence the ability of an employee to exercise objectivity or (ii) impairs the ability of an employee to perform his or her responsibilities in the best interests of the Foundation. 

An employee is considered to have a potential conflict of interest when:

• An employee or his or her family member has a financial interest (examples may include employment by, a consultant to, a representative or agent for, a partner of, holding any office in or deriving any income from any entity doing or seeking to do business with the Foundation) that conflicts with the interest of the Foundation in any manner.
• An employee participates in managerial or consultation services to any outside concern that does business with the Foundation, except with the Foundation’s prior knowledge and consent.
• An employee receives compensation, gifts, favors, entertainment or other similar benefits of more than a nominal value ($100 per incident, $200 accumulated annually by the same vendor, grantee or consultant) from any outside concern which does or seeks to do business with the Foundation. See Appendix: Gifts, Honoraria, Entertainment Policy.
• An employee discloses or uses confidential, special or inside information of or about the Foundation or its clients, particularly for personal profit or advantage.
• An employee or his or her family member has an opportunity to influence the Foundation’s grantmaking, business, administrative or other material decisions in a manner that leads to personal gain or advantage.
• An employee participates in deliberations or actions resulting in the purchase of goods or services from any organization in which an employee or his or her family member has a financial interest.

Duality of Interest
In general terms, a duality of interest may occur when an employee or his or her family member has a material interest – financial or otherwise – outside the Foundation that could influence or be perceived as influencing the employee to act contrary to, or to compromise objectivity to, the interests of the Foundation or for the employee’s personal benefit or that of a family member or a business associate.

As with conflict-of-interest situations, it is not possible to develop a detailed set of rules that cover all circumstances of duality of interest. An example of duality of interest would be when an employee or his or her family member is affiliated with an organization requesting a grant from the Foundation – such affiliation exists if the employee or his or her family member (i) is a director, trustee, officer or employee of the organization; (ii) has an unofficial role such as significant donor or adviser to the organization; (iii) has an employment relationship or a consultative or advisory arrangement with the organization; or (iv) receives a grant or stipend from the organization. See also Board Service and Grant Review below.

Board Service
Employees are permitted to serve, with or without compensation, on boards of for-profit and not-for-profit organizations.

Employees must seek advance approval from the Human Resources Department and the President/CEO of the Foundation before accepting any appointment of board service or before participating in community, charitable and business activities that may or are likely to lead to a conflict of interest or a duality of interest.

Each employee serving on a board is expected to be alert to possible conflicts and dualities of interest and bring them to the attention of his or her supervisor and the Director of Human Resources. If, in the sole discretion of the President/CEO of the Foundation, the conflict would jeopardize the Foundation’s interests, the employee will be asked to resign from the board.

Grant Review
If a Foundation employee serves on a board of an organization that has or is seeking a grant from the Foundation, or if an employee or his or her family member serves as a representative of an organization that has or is seeking a grant from the Foundation, then during the Foundation’s process of reviewing or managing a prospective or actual grant the Foundation employee may only provide information to inform a discussion about the merits of that application or active grant. 

During the employee’s outside board activities, the Foundation employee must not be present during deliberations over a Kresge grant application, and must also refrain from voting on or exercising decision-making authority over transactions concerning such an application. 

If an employee’s family member manages a prospective or actual Foundation grant on behalf of a grantee organization, then the Foundation employee related to that family member may not manage the grant on behalf of the Foundation. 

Disclosure
In connection with any perceived, actual or potential conflict of interest or duality of interest, an employee must disclose the existence of his or her financial interest or affiliation and all material facts to the Foundation by updating the Foundation’s disclosure form annually and as soon as a new affiliation begins, and shall provide additional information as requested. All information so disclosed will be confidential except to the extent necessary for the protection of the interests of the Foundation.  Former affiliations should be disclosed for three (3) years after the term of service.

Violations of the Policy
Violation of this Policy, or incorrect or incomplete responses to the disclosure requirement, will be treated as serious misconduct.  Please notify the Human Resources Department should you have a question or wish to report a perceived or actual conflict of interest or duality of interest. The Foundation will utilize the following guidelines:

1. The Human Resources Department shall investigate the facts and seek legal advice as necessary to fully investigate perceived, potential or actual conflicts of interest or duality of interest and present recommendations to the President/CEO. 
    
2. If a supervisor has reasonable cause to believe that an employee has failed to disclose actual or potential conflicts of interest or duality of interests, the supervisor shall work with a committee of Foundation managers, appointed by the President/CEO, to conduct an investigation.
    
3. If, after completing the investigation, the committee determines that the employee has in fact failed to disclose, it shall present recommendations to the President/CEO. The President/CEO may take appropriate action, up to and including termination of employment and other remedies provided by law.

Misinterpretation of this Policy will not excuse a violation. An employee who discovers or suspects fraudulent activity should follow the procedures outlined in The Kresge Foundation Fraud Reporting Policy.
 

EMPLOYEE CONFLICT-OF-INTEREST ADDENDUM

Program Staff Delegated Authority

Introduction
The purpose of this addendum to The Kresge Foundation’s Employee Conflict-of-Interest Policy is to provide additional guidelines to program staff members regarding board service and grant review and approval under the staff delegated-authority guidelines. 

Program staff members are required to comply with all of the guidelines outlined within the Employee Conflict-of-Interest/Duality-of-Interest Policy in addition to this addendum.

Allowable Board Service
Program staff members are permitted to serve, with or without compensation, on the following types of boards:

Funders’ Collaboratives
Funder’s collaboratives are organizations that pool funds and expertise for joint programmatic initiatives. A funder’s collaborative may be an independent 501(c)(3) organization under the Internal Revenue Service Code, or administered through a fiscal agent classified under Section 501(c)(3) of the IRS Code. Employees may serve in a governing or advisory capacity or on a committee or working team. Examples of such collaboratives include:

1. Living Cities
2. Convergence Partnership

Philanthropic Networks and Affinity Groups
Philanthropic networks and affinity groups are organizations whose members are grantmakers and/or nonprofits, and who are either issue- or interest-based or serve a broad philanthropic infrastructure. They may be independent 501(c)(3) organizations or administered through a fiscal agent under Section 501(c)(3). Employees may serve in a governing or advisory capacity or on a committee or working team. Examples of such networks and groups include:

1. Funders Network for Smart Growth
2. Council on Foundations

All Other Nonprofit Organizations
Kresge prospective or current grantee: Employees may serve on a nongovernance committee or working group of a current or prospective Foundation grantee, excluding any fundraising solicitation role. Examples include:

1. LISC Program Committee (nongovernance)
2. Riverfront Conservancy Program Committee (nongovernance)

Non-Kresge Grantee or Nonprospective Kresge Grantee: Employees may serve on boards of non-Kresge grantee or nonprospective Kresge grantee boards in a governing or advisory capacity or serve on a committee or a working team. If the organization applies for the grant with the Foundation, the Foundation program staff member must immediately relinquish his or her governing role. Examples include:

1.  The Friends School in Detroit
2. First United Methodist Church of Birmingham

Grant Review and Approval for Board Service in Transition or Approved Board Service
If a Foundation Program staff member serves on a governing board of an organization that has or is seeking a grant from the Foundation, or if an employee or his or her family member serves as a representative of an organization that has or is seeking a grant from the Foundation, then the Foundation employee may not include this grant in his or her grant portfolio or provide information to inform a discussion about the merits of that application or active grant during the Foundation’s process of reviewing or managing a prospective or actual grant.

Employees must seek advance approval from the Human Resources Department and the President/Chief Executive Officer of the Foundation before accepting any appointment of board service or participating in community, charitable and business activities that may or are likely to lead to a conflict of interest or a duality of interest. The President/CEO has the discretion to approve governing and nongoverning board appointments when he or she determines the role is essential to the Foundation’s mission or effectiveness.

During the Foundation employee’s outside board activities, the employee must not be present during deliberations concerning, and must refrain from voting on or exercising decision-making authority over transactions with, a Kresge grant application. 

If an employee’s family member manages a prospective or actual Foundation grant on behalf of a grantee organization, then the Foundation employee related to that family member may not manage the grant on behalf of the Foundation. 

President/CEO Board Service and Grant Approval
If the Foundation President/CEO serves on a governing board of an organization that has or is seeking a grant from the Foundation, then he or she will follow the grant-approval process and procedures established for all Trustees and will follow the same exceptions as defined within this Policy. 
 

APPENDIX

1. Gifts, Honoraria, and Entertainment
As a general rule, employees may not receive or offer any gift or anything else of significant value for the purpose of influencing the action of the foundation or of the recipient. Value amounts should not exceed $100 per incident or $200 accumulated annually with any vendor, supplier, consultant or grantee.

Gifts, honoraria, or meals and social invitations that are aligned with our business ethics and do not obligate employees or other family members (spouse, parent, sibling, child, stepchild, grandparent, grandchild, great-grandchild, in-law, or domestic partner) to take or refrain from taking any action, or to make or refrain from making any decision on behalf of the foundation (except those valued at $100 or less per incident, $200 accumulative annually), received from vendors, suppliers, consultants, and grantees as part of normal business practice must be declined or given to the foundation or shared with the foundation, and if acknowledgement is appropriate, acknowledged on behalf of the foundation. 

This guideline is not intended to prohibit normal business practices, such as meetings over meals, corporate items given to participants in meetings and conferences, or taken hosting gifts, as long as (a.) they are of nominal and reasonable value, (b.) prior approval from the appropriate management representative was obtained, and (c.) they promote the foundation’s legitimate business interests. 

If an employee has any question or believes there is an appropriate reason to make an exemption to this policy for an individual situation, he or she should contact the vice president of Finance/Treasurer or the director of Human Resources prior to giving or accepting the gift or attending the event.

2.  Ticket or Entrance Fee Reimbursement Policy
The Foundation provides substantial support to arts and culture organizations nationally. It is important that the program staff involved in this area of grant-making remain current on trends in artistic quality as well as programmatic variety of the organizations.Viewing the work allows for this involvement and is an important way to evaluate the work of these organizations. We want to ensure the Foundation is supporting high quality work, as is done in any other program supported by the Foundation.

Were the Foundation to accept free tickets to events by potential or current grantees, it could be perceived as a conflict of interest. Therefore, staff on the Arts & Culture team – and any other team deemed appropriate by the President – may purchase tickets to view the work of current or potential grantees.

All expenses should be approved prior to purchase by the Program Director and be in line with the Arts & Culture budget.