Corporate foundations can now give to employees of their sponsoring corporations since President Trump declared COVID-19 a national disaster, said Foundation Source.

After a corporation creates a private foundation, it is usually barred from giving grants directly to the employees of the sponsoring corporation, said Foundation Source, an organization that provides support for private foundations. But in a presidentially declared national disaster, the prohibition is waived.

“Now more than ever, foundations can make a critical difference,” said Page Snow, chief philanthropic officer of Foundation Source. “As the coronavirus pandemic forces many companies to furlough workers and reduce business hours, corporate foundations can use tax-advantaged dollars to take care of their own.”

Under the qualified disaster exception, emergency grants can be made by corporate foundations to the employees of sponsoring companies without pre-approval from the IRS. However, to prevent self-dealing and other types of misuse, company foundations must adhere to certain guidelines, including using an objective set of criteria for selecting employees in need and  using an independent selection committee to choose beneficiaries, among other criteria, Foundation Source advised.