As disaster season arrived in the United States this year, it arrived with a vengeance. Already rocked in 2020 by the multiple and unprecedented calamities of COVID-19, the Gulf Coast was slammed by Hurricane Laura, one of the strongest storms ever to strike the Louisiana-Texas coast. Two weeks later, another storm, Hurricane Sally, slowly passed over the beaches of Louisiana, Alabama, and Florida with more than two feet of rain falling in a 24-hour period. Meanwhile, wildfires burned millions of acres across California, Oregon, Washington, and more.
While Americans attempt to deal with the disasters, corporations have also been evaluating how to respond when stricken, and especially when a disaster hits close to home. While many have been stepping up with the kinds of financial donations that fuel nonprofit disaster relief, others have been finding ways to support their own employees and their families.
For some, that means setting up a program where they can identify employees in the path of a disaster, or who may have been in a disaster, locating them, and then helping get them to safety or provide them with housing and other assistance until the disaster passes.
From Checking on Employees to Putting Boots on the Ground
Such is the case with Microsoft. The company has a crisis management team that not only reacts to emergencies but also trains and rehearses for potential future emergencies.
And when a disaster does strike, Microsoft’s global security team, working with the human resources crises team, will check on the welfare of employees within its path.
That includes having a platform that reaches out to all employees living or traveling within specified disaster zones to check on their welfare and confirm their safety—and sometimes activating their own emergency responses when people cannot be reached. For example, when communications were down in Puerto Rico after Hurricane Maria and employees could not be reached in 2017, Microsoft deployed its emergency response team to the island to help locate them.
To execute employee relief in the wake of a disaster, Microsoft recommends corporations plan for it.
“The key area we emphasize is to have established roles and responsibilities, and rehearse before a disaster hits,” said Cameron Birge, senior program manager for Humanitarian Partnerships at Microsoft Philanthropies. “Everybody has assumptions about how things will unfold, and in a rehearsal, you get to test those assumptions to actually realize what is correct and learn what needs to change.”
Examples such as that with Hurricane Maria are extreme. For the most part, Microsoft’s disaster response aid for its own employees will vary by need and severity of the emergency.
Create a Corporate Charity to Pre-Fund Employee Aid
For many other companies, being prepared for disaster means establishing an employee assistance funds program, also known as employee relief funds or employee crisis funds, in advance of a disaster. Such programs are typically established as a charitable organization within a corporation and allow the employer, employees, and even outside organizations to contribute. Funds from the charitable organization can then be distributed to employees of the company to provide financial assistance to individuals in times of disaster. Preparing in advance of a disaster is among the best things any corporation can do, according to Michael P. Considine of law firm Kirkland & Ellis.
“Because establishing a charitable organization takes time, it is important to establish such a program in advance and one of the best ways to be prepared; this makes it much easier and faster for corporations to support their employees and community when in need,” said Considine.
Employee assistance funds aren’t just for large corporations, either. According to Considine smaller organizations can partner with kindred companies to pool resources and form a single nonprofit that employees of all the different companies can contribute to. An independent selection committee formed by the founding corporations can then jointly manage the charity for the benefit of the larger class.
Outsourcing Employee Assistance Funds
Those companies that don’t want to start or manage their own charity can outsource it to a third-party provider, such as the U.S. Chamber Foundation and America’s Charities, or the Emergency Assistance Foundation, which has relief funds for organizations ranging from Amazon to the White Sox.
Such organizations also help corporations develop their charitable funds, and decide which sort of disasters and emergencies they will cover, whether it’s individual crises, such as death in the family or someone’s house burning down, or presidentially declared disasters, such as Hurricane Laura earlier this year.
E4E Relief, a wholly-owned subsidiary of the nonprofit group, Foundation for the Carolinas, also manages disaster funds for corporations, said Holly Welch Stubbing, president and CEO of E4E Relief. Under E4E’s model, corporations typically provide initial seed funding to launch the funds. “The vast majority of our clients open the fund for peer-to-peer giving into the fund,” she said. “The program enables companies and their employees to care for each other, compassionately and rapidly.”
Since its launch in 2001, E4E has grown rapidly. After providing funds covering 1 million employees in 2017, the group now supports 5 million workers worldwide, and the COVID-19 pandemic has helped to swell the ranks. “We have welcomed many new companies in the past 6 months, contributing over $150 million to charitable grants to support employees with basic life necessities,” Stubbing said. “This year alone, we have granted $81 million in relief on behalf of our client programs, as compared to $12.3 million last year.”
Taking Employee Aid Tax Free
Regardless of what charity holds the account, the monies in most emergency assistance funds pay for necessities such as rent or mortgage payments, utilities, medical bills, funeral expenses, and evacuation-related assistance for employees during and after a disaster. In a recent study of more than 20,000 former E4E grant applicants, 76% reported that assistance during a crisis helped them avoid at least one negative event, such as late fees, evictions, foreclosures or service shutoffs.
One more way to immediately serve employees at the time of a disaster? Directly. According to Considine, if an event is declared a qualified disaster by the national government, then an employer can immediately give funds to affected employees. Such funds are tax-free for the employee, and would also be tax deductible for the employer.