Fundraising for Employees: How Employers Can Help
“One of my employees has found themselves in a tough situation in their personal life and I want to help. What can I do?”
As an employer, you’re likely aware that you must protect your employees’ privacy, but to what extent? How much can you share? Can you set up a fundraising page? Can you request employees make donations for the employee?
As someone who’s been a part of both sides of this question, I appreciate the consideration that goes into these decisions.
Over the summer, my family and I found ourselves setting off on a daunting venture to raise money for a life-changing service dog for our son. They’re expensive and not covered by any type of insurance. However, a service dog would not only greatly improve my son’s quality of life, but potentially even be lifesaving.
So, what can you do to help in these types of situations?
You can set up a tax-advantaged employee crisis fund. Typically, these funds would be used to help employees who run into a situation that makes it difficult for them to pay for necessities. You’ll want to set up a nonprofit entity that both receives and distributes the contributions as grants to the employee, which makes the funds tax deductible to the donors and tax free for the recipient.
You'll also want to establish a policy that outlines an employee’s eligibility for a donation. You should limit eligibility to setbacks due to a medical problem, funeral expenses, or another emergency situation that has occurred; not to assist financially due to an employee’s mishandling of their own finances. While the IRS has outlined how to set up these types of programs, sometimes employees don’t fall into a category that would meet the criteria, like me and my family’s service dog. Then what?
Employers have asked if they can set up a fundraising page on behalf of the employee. In short, the answer is no. Particularly in an HR or leadership role, you don’t want to release an employee’s personal information without their consent. Also, it can lead to employees feeling as though you’re showing favoritism to certain employees as well as make other employees feel obligated to contribute since management set it up, even if they’re not financially able to.
Even if an employee gives you permission to share their circumstances with others, you’ll still want to be cautious in your approach. You could ask other members of upper management or the executive team to see if they want to help, but you never want to make the employee’s colleagues feel like they must contribute. If the need is for someone in a position of management or higher, you also don’t want employees to feel like there will be adverse consequences if they don’t contribute.
Perhaps the best way to help is to create a culture of philanthropy within your organization to give your employees a platform where they can reach out to their co-workers to ask for assistance if they would like to. It can start small: maybe a few fundraisers for outside organizations.
If an employee is in a situation right now that they’ve made you aware of, you could give them permission to send out a donation request directly to their fellow colleagues. Maybe create a digital ‘bulletin board’ where employees can submit various kinds of requests that an employee could post their fundraiser to. There are many options out there for employers who want to help employees in need or who are raising funds for personal causes; you simply need to figure out which makes the most sense for your population.
For those of you wondering, the philanthropic culture set up here at Assurance paid off for us: my son will be getting his service dog.
- Charity: Chicken Soup for a Brand's Soul
- How a Wellness Program Can Help Employee Engagement
- Old School is the Best School
- My Leadership Advice: Stay Connected
ABOUT THE AUTHOR