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Disaster Relief: Limiting Assistance to Affected Employees

Can a charity provide disaster relief limited to affected employees of a company?

An organization can be exempt as a charitable organization if it benefits a charitable class.  Beneficiaries must be needy or distressed.  Therefore, aid recipients must be selected based on an objective determination of need or distress, and the selection must be made using either an independent selection committee or substitute procedures adequate to ensure that any benefit to the employer is incidental and tenuous. See Publication 3833 for more information on employer-sponsored assistance programs.  Special rules apply to certain payments by employer-sponsored private foundations.

Page Last Reviewed or Updated: 20-Mar-2014