---
title: "Section 501(c)(3) conflict of interest policy"
url: "https://ailawframework.com/precedents/not-for-profit-charities-and-associations/us-501c3-conflict-policy"
type: "precedent"
site: "AI Law Framework"
id: "a35-us-501c3-conflict-policy"
area_id: "A35"
kind: "policy"
ai_level: "yellow"
version: 1
task_ids: ["A35-A20260923-2", "A35-T1-R8"]
law_stated_as_at: "2026-10-22"
---

# Section 501(c)(3) conflict of interest policy

> A starting-point conflict of interest policy for an organisation described in section 501(c)(3). The IRS sample does not prescribe the terms. Adoption is not required for exemption.

Canonical page: https://ailawframework.com/precedents/not-for-profit-charities-and-associations/us-501c3-conflict-policy  
Law stated as at: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

- Kind: Policy. A policy or procedure for a firm or client.
- Practice area: [Not-for-Profit, Charities & Associations](https://ailawframework.com/precedents/not-for-profit-charities-and-associations.md)
- Jurisdictions: United States
- AI level: Yellow. You and the tool draft together, with you directing. You check every statement you rely on.
- Law stated as at: 2026-10-22
- Status: Maintained. Checked on 2026-10-22 against the 2 authorities it cites, for United States.

## When to use it

Use when a lawyer is preparing a conflict of interest policy for a section 501(c)(3) organisation to consider. Do not use it as Form 1023, and do not treat adoption as a condition of exemption.

## Used for these tasks

- [Draft a conflicts-of-interest register from the related-party papers](https://ailawframework.com/practice/not-for-profit-charities-and-associations/draft-a-conflicts-of-interest-register-from-the-related-party-papers.md)
- [Draft board-governance materials against the charity standards](https://ailawframework.com/practice/not-for-profit-charities-and-associations/draft-board-governance-materials-against-the-charity-standards.md)

## How AI may be used

Yellow: the lawyer adapts the policy to the organisation and its governing document before the board adopts it.

**AI may:**

- Set out disclosure, recusal, minutes, compensation, and annual-statement steps for the board to consider.
- State that the IRS sample does not prescribe requirements and that adoption is not required for exemption.
- Leave names, thresholds, and disciplinary outcomes blank.

**AI must not:**

- Do not copy the IRS sample policy as the organisation's policy.
- Do not complete or file Form 1023 or Form 990.
- Do not say that adoption of this policy produces recognition of exemption.
- Do not add a state nonprofit-corporation act. None was opened.

**The lawyer checks:**

- Compare this text with the organisation's articles, bylaws, and any state conflict statute the lawyer selects.
- Decide whether a hospital completing Schedule C needs the sample's hospital insert, which this policy does not copy.
- Confirm compensation decisions against the instructions' description of reasonable compensation.
- Do not treat the annual statement as a filed return.

## Authorities

- [Instructions for Form 1023 (revised 12/2024)](https://www.irs.gov/instructions/i1023)
- [26 U.S.C. § 501](https://www.law.cornell.edu/uscode/text/26/501)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/not-for-profit-charities-and-associations/us-501c3-conflict-policy and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*