What Are Employee Compassion Funds & How To Manage a Program

Amidst the volatile financial landscape of the past few years, companies of all sizes are starting to set up Employee Compassion Funds as a safety net for their employees. Businesses large and small want to help their employees meet essential financial, physical, and emotional needs and ease hardships, especially since most Americans can’t cover a $1,000 emergency expense. These funds are also known as Employee Relief Funds, Employee Crisis Funds, Emergency Employee Care Funds, and Employee Assistance Funds.

It works by having donors contribute tax-deductible funds to the program. Then, employees can confidentially apply for assistance and use these tax-free funds for living expenses where they need them. 

An Employee Compassion Fund program demonstrates a commitment to your employees’ well-being and positively impacts your local community. It’s also one of the best ways to support your employees.

According to Purpose Under Pressure, this commitment is important as most workers seek socially responsible companies that provide fair pay when contemplating a new job. Having an Employee Compassion Fund also improves your company’s ability to engage current employees as they are more likely to stay for three more years on average when they feel cared for by their employer. 

In this blog, we’ll review: 

  • Structuring your Employee Compassion Fund program
  • Using technology to manage Employee Compassion Funds + a case study

Structuring Your Employee Compassion Fund Program

Employee Compassion Funds can be set up as disaster relief or a permanent ongoing program. Of course, you can always create a disaster relief fund first and then expand your program later on after seeing the impact on your employees. 

It’s proven that companies want to help others during and after disasters. Disaster events tend to drive awareness and urgency toward community support. 

For example, after Hurricane Ian hit, Givinga’s client TechnoMile wanted to find a way to support their employees heavily impacted by the hurricane. They worked with Givinga to create a “Dream On” Employee Compassion Fund program to support employees in times of need. Their initial campaign raised over $21k, and Givinga was able to establish the program and distribute funds to employees in less than 30 days. TechnoMile’s Fund will continue to support employees with different needs throughout the year. 

However, global disasters aren’t the only cause of hardship for employees. Economic stress in any severity hurts employees and employers, as financial well-being inherently connects with mental well-being and poor mental well-being reduces work productivity.

An ongoing Employee Compassion Fund for your company destigmatizes asking for help, allows employees to recover faster with more stability, and creates a workplace culture that commits to charitable giving and employee well-being. Workers can support both their domestic and international colleagues, both in-office and remote, with a perpetual fund. 

If you want employees and public donors to contribute to the fund, it’s important to set up the fund via an external public charity partner. Otherwise, the donations won’t be tax-deductible, and your employees won’t be able to access the funds without taxation. 

You’ll also want to set qualifications for the fund. Some questions to consider are: 

  • Will only full-time employees have access to the fund? 
  • What determines an employee’s eligibility? Qualifying events can range from large-scale global disasters to unexpected severe family emergencies like a funeral, house fire, or medical issue.
  • What type of donations will you accept? For instance, will stock or PTO donations count?

Technology can help you set up the fund and stay compliant, which we’ll cover in the next section.

Using Technology to Manage Employee Compassion Funds (+ Case Study)

Technology makes setting up and managing Employee Compassion Funds for businesses of all sizes an easy one-stop shop, reducing the administrative burden on your team and making it more convenient for employees needing funds. Using technology creates a more robust and sustainable Employee Compassion Fund for the long term. It democratizes philanthropy and makes asking for help stress-free.

Givinga’s Philantech® simplifies the process of setting up and managing an Employee Compassion Fund. Donors can make tax-deductible contributions directly to the fund through the platform, with recipients receiving these tax-free charitable donations. 

Our all-in-one platform allows companies to streamline grant request applications, review and approval, payment delivery, reporting, and fundraising campaigns. You can start taking applications and awarding funds to application winners within weeks. Participating organizations can also customize disaster funds to meet the needs of their specific communities and direct funds to approved individuals. Our platform allows businesses to set eligibility criteria for their funds, enabling those who meet the qualifying requirements to receive assistance effortlessly. 

For example, Orinda Country Club (OCC) launched a COVID-19 Employee Compassion Fund powered by Philantech® for their team to relieve pandemic-related financial hardships. They’re an excellent example of a small or medium-sized (sub-500 employees) company that leveraged technology to set up an Employee Compassion Fund that could scale with them.

Philantech® streamlined OCC’s process for reviewing relief requests, processing donations and ensuring they fit IRS guidelines, and dispersing weekly payments to approved recipients. Our platform handled all the IRS reporting and compliance, and our nonprofit partner made it possible for OCC to provide tax-free employee support and tax-deductible donations for donors.

With Givinga’s all-in-one platform taking on the logistical load, OCC could focus on broad community fundraising with our campaign page and member engagement using their existing communication channels. Our vetted nonprofit partner was a vital resource for OCC in creating the program, building a review and approval process for applications, and communicating disaster response initiatives to all employees and the local community. 

After seeing the measurable positive impact of the Employee Compassion Fund on employee retention, recruitment, and culture, OCC decided to launch an ongoing Hacienda Employee Fund. To date, the fund has helped one-third of their workforce and inspired them to pursue new corporate social responsibility initiatives.

Seamlessly Set Up an Employee Compassion Fund with Givinga

Givinga has technology solutions for businesses of all sizes that want to pursue setting up an Employee Compassion Fund to support their staff.

With our all-in-one Philantech® platform and completely customizable white-label features, your company can set your desired eligibility criteria and invite employees to apply, all while prioritizing privacy and confidentiality. If you already have a corporate giving or matching donation program, we make it straightforward to integrate your Employee Compassion Fund with it.

Our tools also provide regular reporting to track fund balances, applications received, and delivery of funds. You’ll even be able to set an alert for when the balance falls below a specified amount. We handle all the tax documentation so that your employees get immediate delivery of funds. 

You’ll have access to our nonprofit partners and other resources for help with setup and employee engagement ideas. Plus, a nonprofit organization can increase the range of hardships your fund can cover. 

Schedule a demo today to make an Employee Compassion Fund the cornerstone of your company’s corporate social responsibility initiatives and workplace culture.

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