May an employer-sponsored private foundation provide disaster relief to employees of a related employer?
A private foundation that is employer-sponsored may make qualified disaster relief payments. A qualified disaster includes a disaster that results from certain terrorist or military actions, a Presidentially declared disaster, a disaster that results from an accident involving a common carrier or any other event that the Secretary of the Treasury determines is catastrophic. The IRS will presume that qualified disaster payments made by a private foundation to employees (or their family members) of an employer that is a disqualified person (such as a company that is a substantial contributor) are consistent with the foundation’s charitable purposes if: • the class of beneficiaries is large or indefinite (a charitable class), • the recipients are selected based on objective determinations of need, and • the selection is made using either an independent selection committee or adequate substitute procedures to ensure that any benefit to the employer is incidental and tenuous. The foundation
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