Providing Assistance to Employees Who Have a Sudden Financial Emergency Due to a Catastrophe or Crisis in Their Life
44% of Americans can’t cover a $400 unexpected emergency expense and only 39% of Americans say they have enough savings to cover a $1,000 emergency room visit or car repair. No matter the scale or severity of the crisis, employee financial stress costs employers an average of $5,000 per employee per year in lost productivity. Employers have an opportunity to address this problem and demonstrate their commitment to the well-being of their workforce through Employee Assistance Funds (EAF) – also known as an Employee Relief Fund or an Employee Crisis Fund.
Assisting employees through an EAF program allows them to recover more quickly from a sudden financial hardship in their life and it gives their colleagues an easy way to help and show they care.
So how does a company set up an EAF? There are two ways to establish an EAF:
- A company may establish a separate charity or a private foundation. Both of these require investment, ongoing administration, and adherence to applicable laws and regulations. In addition, there may be additional program restrictions with a private foundation. For example, a corporate foundation can only provide tax-exempt grants for qualified disasters. Many disasters and emergency hardship situations are not qualified as disasters.
- A company may partner with an established public charity who has experience, expertise, and infrastructure applicable to managing an EAF. This option provides the most flexibility for a company. An established charity with proven funds management experience expertise—like America's Charities—does not have the same qualifying limits as private foundations do, as outlined in the first example. More information can be found in IRS Publication 3833.
Due to the costs, legal requirements, and administrative workload involved, America’s Charities and the U.S. Chamber of Commerce Foundation have partnered to help employers with the support they need to offer EAFs to their employees.
With decades of experience supporting corporate investments in employees and communities, America's Charities and the U.S. Chamber Foundation are ideal partners for external EAF management services and can tailor each EAF to the parameters and qualifications provided by employers, ensuring it aligns with their corporate values and culture.
Some core benefits of collaborating with America’s Charities and the Chamber Foundation for your company’s EAF program include:
- ENHANCED EFFICIENCIES - With an already established infrastructure, America’s Charities and the Chamber Foundation can quickly launch and mobilize your company’s EAF.
- ESTABLISHED EXPERIENCE - Decades of experience in corporate relationships, customer service, and funds management ensures that your EAF is managed professionally.
- GREATER FLEXIBILITY - Partnering with an external nonprofit provides flexibility and tax advantageous options for employers and employees.
To learn more about Employee Assistance Funds and to take the next steps towards starting your company’s EAF program and demonstrating your commitment to your employees’ wellness, click here.