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Tips for Setting Up an ERF

A piggy bank with glasses that says break glass in case of emergency.

​As with any initiative, there are a lot of important details to thoroughly and thoughtfully consider before establishing an employee relief fund (ERF).

"Carefully contemplating these considerations will also help answer the bigger questions about how to establish and administer the fund," said Laura Sorenson, chief people officer at First Watch Restaurants in the Sarasota, Fla., area.

She and other employers that have established their own ERFs offered the following recommendations:

  • Conduct research to understand the level of need within your workforce and ensure that setting up an ERF is the right choice, Sorenson said.
Her organization started its ERF in May 2020 to support employees and their families during the pandemic. It offers tax-deductible grants of $500 to employees experiencing "extraordinary hardship." In 2022, the ERF distributed more than $100,000 to 230 employees affected by Hurricane Ian.

  • Work closely with your senior leadership team and get insights and alignment from the right stakeholders to determine how you want to establish the fund—private foundation versus public charity—and administer it, whether by outsourcing its administration or handling everything internally, Sorenson said.
  • Ensure that you're in full compliance. "These types of funds are governed by several different laws and IRS regulations," Sorenson pointed out.
  • Decide how this benefit will be funded. It could be through a one-time or periodic gift from the employer, employee contributions or fundraising, according to the Association of Corporate Citizenship Professionals.
  • Determine the fund's purpose.
For example, Monroe, La.-based Lumen Technologies has an ERF set up for employees impacted by fires and natural disasters. Other employers established ERFs to assist employees whose work hours and pay were reduced during the pandemic.

  • Decide how the ERF will be administered. Lumen Technologies uses a Louisiana-based vendor for its ERF.
"We set our defined criteria and verify employment as applications are submitted, but we are not involved in the decision-making process," said Kristy Lacroix, Lumen's senior lead social responsibility manager.

  • Develop a communication plan to ensure all employees know how to apply for the funds when facing an eligible financial hardship. Communication may involve managing employee expectations.
"In cases where financial constraints necessitate scaling back the fund, managing disappointed expectations can be a delicate matter that requires open communication and alternative support strategies," said Cheri Fisher, chief services and operations director at The RFP Success Co., a business consulting and services firm in Tempe, Ariz.

And at, headquartered in Glasgow, Scotland, there is a standing agreement with staff that "if we assist in such a manner, as long as they continue working with us for the next 12 months,
there's no need for reimbursement," company founder Clarke Duncan said. 

  • Ensure transparency in the fund's management and distribution.
"One of the main challenges is managing the fund fairly and objectively," Duncan said.  "While we've established this sort of fund with the best intentions, it's also crucial to respect the privacy and dignity of workers who need assistance. It's a sensitive matter that needs to be handled with care."

  • Consider providing ways for employees to support the fund.
"We raise funds through traditional methods, such as one-time donations and payroll deductions" for a 501(c)3, said Jill Waite, chief people officer at Portillo's Hot Dogs headquartered in Oak Brook, Ill. "But we have fun with different fundraising events," such as its Frost for the Fund.

At this event, employees have the opportunity to frost, as fast as they can, the restaurant's signature chocolate cakes that are baked in house daily. Cost of entry is donated to the Heart of Portillo's Fund.

It's a way for employees "to participate and support each other," Waite said, "in a way that felt authentic to our brand." 


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