Industries with large work forces, such as retail, are particularly well-suited to employee disaster and hardship relief funds. These employers typically have a high proportion of employees with incomes or otherwise earning wages that make them vulnerable to the financial impact of unexpected disasters or hardships. Knowledge and sensitivity of this can be helpful in designing an effective relief fund for employers.
Further, data collected from relief fund applications show that certain events receive applications more frequently. Employers with a new program can design a narrower program to limit the total number of grants based on these categories.
As shown in the chart above, medical-related expenses are easily the most common category. Employers starting a relief fund should consider that factor when deciding which events qualify and what the fund’s initial budget should be. Additionally, the maximum grant amount can be set to a lower amount, such as $1,500, for the initial year of the program.
During the first year of the relief fund program, employers can expect 0.5–1% of all employees to submit applications to the fund. A narrower fund with fewer event categories will reduce that number significantly. As an example, if an employer has 10,000 employees and a standard fund, it can expect 50 to 100 applicants, with 45 to 90 receiving grants. Assuming a maximum grant of $1,500, this would mean $67,500 to $135,000 in grant dollars in the first year.
Given that approximately half of all applications are for medical-related expenses, excluding or limiting those categories could be expected to sharply reduce the grant dollars. Another option for employers who want a fund with a very limited budget would be to have a disaster-only fund. That would mean a large sum of grant dollars going to employees in need when there is a qualifying disaster, but otherwise the fund would be dormant.
Director of Corporate Operations