Since the beginning of the COVID-19 pandemic, companies have stepped up to respond to disasters and emergencies around the world through charitable donations and grant programs. However, beyond traditional grantmaking, our leading donors have also implemented new and improved strategies to drive engagement with their employees and build meaning into their philanthropic emergency response strategies.
Since the beginning of 2020, CAF America has granted more than $150 million to charities working on emergency response funded by our generous corporate and corporate foundation donors. While the private sector has stepped up to address some of the most vulnerable populations impacted by natural disasters, pandemic, and war, CAF America has also observed the incredibly generous donations of our donors’ employees. More than ever before, employers across the United States have leveraged the power of employee engagement to build greater impact while delivering meaningful philanthropic opportunities for their teams. When disaster strikes, employees want to step up – its up to their corporate responsibility teams to provide them with the proper tools to give in a way that incorporates them into the company’s social impact story.
At CAF America we have observed the following trends emerging and growing among our leading corporate donors:
Employer Disaster Hardship Relief Funds
The Employer Disaster Hardship Relief Fund (commonly known as an Employee Assistance Fund, or EAF) is set up by an employer with a partner charity, with the purpose of supporting employees facing financial challenges caused by disasters. Gifts to the fund by the company qualify as deductible gifts but cannot be used to substitute for earnings or salaries. These funds can only disburse grants to individual employees to cover reasonable and necessary living expenses, personal expenses, and housing and repair expenses related to qualified disasters. The Internal Revenue Services’ (IRS) Publication 3833 provides the legal framework and conditions for such funds and eligibility for its tax advantages.
Many times, companies work with trusted private foundations or public charities to administer these accounts and manage the review and approval of qualified payments to employees in need. CAF America has partnered with two such organizations – E4E Relief and America’s Charities – to facilitate grants to employees receiving EAF-qualified payments outside of the United States. In this way, companies can fund charitable emergency response grants in support of their employees in need, anywhere in the world.
Pooled Employee Donation Funds
Beyond Employer Disaster Hardship Relief Funds, many companies have also created opportunities for their employees to contribute to a centralized account that management can then deploy in larger, strategic grants. Typically, CAF America can set up a separate Donor-Advised Fund to receive these contributions and it is made available to employees on their internal engagement portal or a custom-made website.
This approach has many advantages; primarily, that employees can contribute to economies of scale when responding to a disaster in a way that multiplies impact and simplifies the story the company tells about its philanthropy. Making large grants to a handful of organizations allows for more holistic support than multiple smaller gifts – especially since CAF America enables these companies to give directly to local organizations running grassroots response efforts. This also simplifies corporate matching gifts, since the company can make a single disbursement at the conclusion of each campaign rather than matching each individual employee donation.
Employee-Supported Employee Assistance Funds
In some cases, corporate donors are combining these two strategies to allow employees in the US to give in support of their colleagues impacted by disasters in other countries. This is a particularly useful strategy to deploy in years that see unprecedented levels of need: In 2022, for example, the lingering impacts of the COVID-19 pandemic compounded with natural disasters, war, and civil unrest to drive a spike in need that pre-set corporate giving budgets struggled to meet. By opening a company’s EAF to employee donations, corporate responsibility teams give their internal stakeholders the means to make direct impacts on the lives of their colleagues, adding a meaningful human dimension to the company’s philanthropic story.
CAF America is proud to work with leaders across the corporate philanthropy space to support these employee engagement programs. Our dedication to regulatory compliance, risk mitigation, and reputation protection – the 3 Rs of International Philanthropy – provides a strong foundation on which to build effective and impactful charitable programs, anywhere in the world. Speak with us today to learn more about how you can join us.
