It is a transaction between company officers, family members or business associates with no concerns for interest payments.
Foundations are prohibited from engaging in transactions with disqualified persons or using the foundation's assets to the benefit of such an individual. (See "disqualified persons.") For example, a foundation trustee's spouse might be flown at the charity's expense to a distant board meeting even though the spouse had no functional reason for attending. Trustees may be compensated for services that might ordinarily be performed by staff as long as the trustee has the requisite skills, the compensation is reasonable for the work performed, and the work was commensurate with the requirements of the foundation's charitable activity. As with most legal issues regarding foundation service, prudence is always the best course of action.
Improper conduct by a broker who, while employed by a principal, deals with the property for the brokees personal interest or benefit without full disclosure to and consent by the principal. An example of self-dealing is the selling of a property to a broker's relative without disclosure and consent of the principal.
Refers to business and/or financial transactions between a foundation and its "disqualified persons", a broad category of foundation "insiders" that includes contributors, managers and certain public officials.
A private foundation is generally prohibited from entering into any financial transaction with certain "disqualified persons" (such as trustees, directors, officers, and substantial contributors). The few exceptions to this rule include paying reasonable compensation to a disqualified person for services that are necessary to fulfilling the foundation's charitable purposes. Violations will result in an initial penalty tax equal to five percent of the amount involved.
a transaction in which a trustee, who owes strict fidelity to his or her fiduciary, engages where self-interest is opposed to duty (for example, where a director purchases from the cooperative at favorable prices not generally available).
An act whereby a director/trustee derives personal benefit from the foundation they administer. For instance, a foundation would not be permitted to loan money from its endowment fund to one of its board members at a lower than market value rate.
Self-dealing is the conduct of a trustee, an attorney, a corporate officer, or other fiduciary that consists of taking advantage of his position in a transaction and acting for his own interests rather than for the interests of the beneficiaries of the trust, corporate shareholders, or his clients. Self-dealing may involve misappropriation or usurpation of corporate assets or opportunities.
