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GiftLaw Pro Home   >  Chapter 7 - Charitable Organizations  >  7.3 Charitable Governance  >  7.3.3 Avoiding Financial Conflicts of Interest  >  Basic Quiz

Basic Quiz - 7.3.3 Avoiding Financial Conflicts of Interest

1. Generally, to qualify as a tax-exempt entity, a charity must generally be able to demonstrate that it meets a public purpose.
           
2. Transfers to charity that provide a substantial personal benefit to the donor are not deductible.
           
3. It is not a problem for a charity to provide a portion of their net earnings to a private party.
           
4. The rules against private inurement only apply to officers and directors.
           
5. It is permissible for a charity to pay more than fair market rent to lease office space from a member of the charity's board of directors.
           
6. To qualify as a tax-exempt organization, a charity must pass either an organizational test or an operational test.
           
7. An organization that has substantial non-exempt activities can still qualify as a non-exempt organization
           
8. Adopting good policies, such as having a board that operates independently, can help avoid conflicts of interest.
           
9. A charity should consider adopting a Conflict of Interest Policy to govern how potentially interested persons (such as board members and officers) interact with the charity.
           
10. There is no need for a charity to ask interested persons to complete a Conflict of Interest Questionnaire more than once.