September 10, 1998 | Read Time: 2 minutes
The Council on Foundations is concerned that the Internal Revenue Service is taking an inappropriate stance on corporate grant makers that help company employees cope with such emergencies as floods, fires, and severe illnesses. The service recently described its position in the latest version of its training textbook for agents.
The I.R.S. said that emergency relief programs run by corporate foundations can improperly give employers significant benefits (such as a “more stable and productive work force”) and, therefore, corporate foundations that provide such aid can end up facing penalties for “self-dealing” and other offenses.
In a letter to the I.R.S., Jane C. Nober, deputy general counsel for the Council on Foundations, wrote that “on the contrary, the council understands that these programs provide much-needed charitable aid to employees and that the awarding of such assistance is made in a disinterested, objective, and limited fashion.”
Ms. Nober told the I.R.S. that the Council on Foundations also was concerned that the handbook for agents failed to make clear whether an employer could work with an existing charity to provide crisis relief or must establish an independent charity to do so. The I.R.S. has subsequently invited the council to “come up with guidelines on how corporations and corporate foundations could work with existing public charities, including community foundations, to provide disaster assistance in a charitable fashion,” Ms. Nober said.
Over all, Ms. Nober told the I.R.S., the council was disturbed that the agency apparently wrote its textbook without any evidence that crisis-relief programs have been abused. “At a time when both the public and private sectors are engaged in promoting philanthropy,” Ms. Nober wrote, “we are disappointed to see the service suggesting that corporations are charitable donors whose motives require more scrutiny than others.”
