With Houston still drying out from Hurricane Harvey, Florida battered by Hurricane Irma, and now Mexico devastated by earthquakes, businesses around the country want to help in the relief efforts. Large companies, like Walmart, have committed to match donations to the Red Cross. Media giants, such as Comcast, work to open free internet hotspots to affected disaster areas.
Small businesses may not have the cash reserves or the reach of a Walmart or Comcast, but there are many ways, beyond just a collection jar by the cash register, that businesses of all sizes can help.
Paid-time-off (PTO) or leave bank donations
Accrued PTO or leave can be donated to help people who have been impacted by a hurricane. This can work in a couple of ways. First, employees could direct their employer to donate the cash value of accrued time off to a charity or relief agency. Second, an employer can set up a leave bank where employees can donate their PTO for use by their impacted co-workers.
Both options have tax implications for the business, the donor, and the recipient. Following Hurricane Sandy, the Internal Revenue Service (IRS) issued guidance that said that neither the employer nor the donor employee would be required to pay taxes on donated leave time. Likewise, the recipient was not obligated to pay taxes on the donated time or its cash equivalent.
Morgan Lewis, a large law firm that advises businesses on these types of tax issues, anticipates that the IRS guidance for the current hurricane relief efforts will be the same.
The Society of Human Resources Managers provides resources for businesses looking to set up a permanent leave bank for employee’s affected by medical emergencies or natural disasters.
Other types of donations and charitable efforts
While experts agree that cash is the generally the best way to help following a disaster, sometimes local businesses are uniquely positioned to provide in-kind donations of goods or services.
Business owners should reach out to local charities to discuss the real-time needs of the community. The Small Business Administration encourages employers to consider giving employees extra time off to volunteer in the community or sponsoring events such as a blood drive.
Bottom line
Whether it is a formal program like a leave bank, an event like a blood drive, or even giving customers the opportunity to round up their purchase as a donation, there’s always a way for businesses, large or small, that want to help.
