When disaster strikes, will your employees be able to handle the unexpected expenses, even relatively small ones? Many probably cannot, as research by the Federal Reserve has shown. In light of this, employers who don’t want their workers’ lives to be upended by natural disasters and other emergencies have increasingly turned to a relatively new kind of employee benefit: employee relief funds, which give out cash grants to help workers get through their crises.
Events including 9/11 and Hurricane Katrina provided the inspiration to develop such benefits, a need now underscored by the COVID-19 pandemic and the increase in extreme-weather events. A From Day One webinar last week explored how companies can launch employee relief funds (ERFs), how they work, and how they’ve had an outsized impact in helping workers and their families. Highlights of the conversation:
“Our mission at Truist is to inspire and build better lives and communities,” said Lynette Bell, president of the Truist Foundation, the charitable arm of Charlotte-based Truist Financial Corp. “That applies to those 50,000 employees. We want to ensure that they have the opportunity to thrive.” In partnership with E4E Relief, Truist has raised funds, some donated by employees, to help workers in distress pay for essentials like food and emergency home repairs.
Leading with Compassion
A key component of creating safety nets for employees during emergencies is compassion in the face of the unexpected, says Holly Welch Stubbing, CEO of E4E Relief. “We were committed very early on creating a mantra around compassion, readiness and excellence, trying to treat people well because they are in the most difficult moment–maybe in some cases–in their lives,” she told moderator Lydia Dishman of Fast Company.
By helping employees in a jam, companies can benefit in terms of goodwill, building a sense of unity and purpose in the workforce and the communities they reside in. “Corporate America, their greatest asset is their people,” said Stubbing. When those people have a flooded basement because of a hurricane, or a loss of income from a furlough, they will long appreciate that their employer had their back. “Things happen to us as we live every day,” said Bell. “We want to make sure that when those catastrophic or unexpected things happen in life, this organization is there to support them.”
How Does It Work Exactly?
Companies looking to provide such a benefit for their employees often turn to non-profit partners like E4E to administer the funds, which are set up according to tax codes that allow the relief money to be distributed on a tax-free basis. Working in a partnership, the companies and nonprofits are able to assess needs and design programs to fit the companies and individuals, sometimes focused on a particular situation. One such example is the Brave of Heart Fund for families of frontline health-care workers who have lost their lives battling the coronavirus.
A key feature of such funds is that workers take part in the funding. At Truist, employees can donate to relief funds directly and the company may donate an additional $4 for every $1 an employee donated. “So what you're creating there, hopefully, if it's run well, is a virtuous cycle, where programs are funded in large part by employees themselves, to help their fellow employees and their peers. And then grants are awarded to those same employees in a charitable way with the best tax impacts possible,” said Stubbing.
Rallying the Right Team
In leading the creation of such programs, an emphasis should be put on diversity and the inclusion of new perspectives, our panelists said. “I think we've gotten smarter about asking the right questions up front and knowing who to bring to the table earlier rather than later,” said Stubbing. “I think when we first started we were afraid to do that, to be honest, because we were just a charity, but it's really important that we get the right players early on.”
How long does the setup process take? “Maybe there's been a [factory] that got entirely wiped out by a hurricane and they want to do something now, now, now,” said Stubbing. However, “there is a balance between quality and efficiency and I think companies that put leadership like Lynette in place understand that balance and they understand that you have to have both things at the same time. Those are the best people to work with,” Stubbing said of Bell’s role at Truist.
Leadership can come from unexpected places as well. Bell mentioned engaging with community leaders, nonprofits and those with the finger on the pulse of communities at the center of crises. When these leaders are engaged and on board, the fundraising response has been overwhelming, she said. When tornadoes hit Tennessee this spring, one team raised $370,000 in a relief fund for those whose homes were destroyed.
“And guess what? That was during the time of our 4-1 match,” said Bell. “Those employees really rallied into that.”
The Importance of Stories
When it comes to helping employees within your organization, a simple way to build morale in tough times is through sharing success stories, our panelists said.
“The first week of us unveiling the Truist Cares initiative for COVID, an employee's husband got laid off right away, and their mortgage payment was due,” said Bell. Their relief fund was able to help this employee quickly. “It felt easy and seamless to them. They got their money five days later and paid their mortgage.”
E4E Relief shares uplifting stories like this on its website as well, highlighting ways that employees have bounced back after natural disasters including earthquakes and hurricanes.
More is surely on the way. “The predictions are that it's going to be a very active season with four major hurricanes this year,” said Stubbing. “They're predicting 16 named storms, eight hurricanes, and four of those to be major hurricanes. And that gives you a 69% chance that a major hurricane will hit the US coastline.”
Rallying employees to donate to these funds not only gives them a stake in their own safety nets, but empowers them to help their peers as well. Said Stubbing: “While companies are wrestling with their own revenue and their own financial challenges, you still see them trying to find ways to fund [relief efforts] in conjunction with all of the other things that they're trying to do for the employees.”
Mimi Hayes is a New York-based author, comedian, and assistant director of content at From Day One. You can read her work at mimihayes.com, check out her podcast "Mimi and The Brain," or find her first book, a comedic memoir about her traumatic brain injury on Amazon.