Exploring Employee Disaster & Hardship ReliefHOW CORPORATIONS AND THEIR EMPLOYEES CAN EFFECTIVELY PROVIDE FINANCIAL SUPPORT WHEN FELLOW EMPLOYEES NEED IT MOST

Holly Welch Stubbing,

Michelle Naggar Reichenbach,

Holly Welch Stubbing

@hollystubbing @michellenaggar

Michelle Naggar ReichenbachACTING PRESIDENT & CEO PRESIDENT, TAKE CARE RELIEF FUND, INC.

Setting the Scene

MACRO TRENDS

IN DISASTER & HARDSHIP

1. Large scale disasters are occurring at a higher frequency and are more costly than ever before due to climate change.

2. Preparing and adapting are significant challenges especially for the low-income areas disproportionately and repeatedly impacted.

3. Individuals and families across income groups are vulnerable to long term consequences from unexpected financial hardship.

4. Corporate America, the Nonprofit Sector, and Government Agencies are all grappling with how to best manage this new reality.

Macro-Trends in Disaster & Hardship

Large Scale Disaster Frequency – Trend 1

Over the last three years we have seen several catastrophic natural disasters in the U.S. and other parts of the world, including:

The World Bank estimates $300B - $500B in annual worldwide economic losses from disasters

• Four category 5 hurricanes

• Two category 4 hurricanes

• One category 2 hurricane

• California wildfires

• Mexico Earthquake

• Japan Typhoon Hagibis

• Indonesia Earthquake & tsunami

• Philippines Super typhoon

National Governor’s Association https://www.nga.org/wp-content/uploads/2019/06/4.-Innovation-in-Energy-Resilience.pdf

Expense of Large-Scale Disasters –Trend 1

2019 is the fifth consecutive year in which ten or more billion-dollar weather and climate disaster events have impacted the U.S.

NOAA National Centers for Environmental Information (NCEI) U.S. Billion-Dollar Weather and Climate Disasters (2019). https://www.ncdc.noaa.gov/billions/

Resilience is the ability to prepare for and adapt to changing conditions and

withstand and recover rapidly from disruptions.

U.S. PRESIDENTIAL POLICY DIRECTIVE 21 (2013)

Low-Income Areas Disproportionately Affected – Trend 2

• Disasters reveal the vulnerability, inequality, and power embedded within the fabric of any society.

• Deep inequalities with respect to the distribution of resources

• The insurance gap for natural disasters in 2016 amounted to roughly $180 billion worldwide

• Disasters force poor households to make choices that have detrimental long-term effects, such as withdrawing a child from school or cutting health care expenses.

Global Resilience Institute: https://globalresilience.northeastern.edu/projects/interrogating-resilience-an-analysis-of-inequality-and-vulnerability-in-pre-hurricane-maria-puerto-rico/

Weather catastrophes link to poverty – Trend 2

www.cdc.gov/dhdsp/maps/sd_poverty.htm

Clear Need for Short Term Financial Relief – Trend 3

78% of working Americans report living paycheck to

paycheck

78%

According to a report by CareerBuilder, which may have been further exacerbated by the federal government shutdown in Q1, 2019

The Financial Diaries

25%

45%56% 60%

76%

47%

44%

38%36%

21%28%

11% 6% 4% 3%

<$25K $25,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 >$100KPe

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Household income level

Could you cover a $400 emergency?

yes, with cash yes, with a loan, sale of an asset, or help no

Response to the Evolving Landscape – Trend 4

A DEEP DIVE INTO FOUNDATIONS AND CORPORATIONS

PLAY A BIG PART IN DISASTER RECOVERY

Philanthropic Response

• Disaster philanthropy is one of the fastest growing forms of philanthropy today – over $1B in contributions through various sources from 2013 through 2018

• A five-year trends analysis of the largest 1,000 U.S. foundations demonstrates that foundations contributed an average $150.4 million per year specifically for disasters.

• 60% of millennial parents donated to hurricane relief after Harvey, Irma and Maria, more than any other generation

• One in four high net worth households gave to hurricane relief efforts.

Center for Disaster Philanthropy, Measuring the State of Disaster Philanthropy 2018; www.give.org

Corporate Philanthropic Response

• In the year 2000 less than one-third of the world’s 3,000 largest companies donated anything to disaster relief. By 2015 the share surpassed 90%, with the average donation having increased tenfold.

• Among the 500 largest U.S. companies, the share contributing to disaster relief increased from less than 20% in 1990 to more than 95% in 2014.

• Corporations most impacted in key areas where they operate like the southeastern U.S, California, the northeast, the Philippines and Puerto Rico, have provided 10s of millions in relief funding.

• Preparedness is multifaceted including corporations in disaster affected areas participating through volunteerism, business resources and relief grants.

Harvard Business Review: https://hbr.org/2019/01/giving-after-disasters

Disney Example

Corporate Business Response

• Business Continuity Planning now includes disaster response

• Protection of physical assets including real property

• Dramatic shifts in insurance coverage & due diligence review

• Readiness planning including customer experience and corporate social responsibility efforts

• Opportunities for employee engagement

Benefits of Practicing Social Responsibility

In 2018, Fidelity Investments cited that 79% of employees prefer to work for a socially responsible company.

Additionally, a strong workplace giving program can:

• Reduce turnover by 50%

• Increase engagement up to 7.5%

• Increases productivity by 13%

The ability to provide for someone in crisis and make a tangible practical gift

gives employees a sense of participating in recovery – and creating

collective good.

Employee Relief

WHAT TO CONSIDER WHEN OFFERING EMPLOYEE RELIEF

PROGRAMS IN YOUR COMPANY

Considerations For Program Design

1. Is the program charitable?

• Tax implications for (US) grant recipients

• Tax implications for (US) donors

2. Is the program sustainable?

• Varying disaster seasons

• Raised awareness over time

• Campaigns and funding

3. Does the program involve the appropriate key players?

• Human Resources

• Corporate Social Responsibility

• Foundation

• C-Suite Leadership

4. How should the program be run and managed?

5. How will the program be funded?

4 Corporate Options for Employee Disaster ReliefCompany Run Private Foundation

Company Run Public Charity

3rd PartyProvider

Sporadic / “Pass the Hat”

Scope Narrow & Defined - Qualified Disasters Only

Broader & Defined Broader & Defined Reactive & Unsustainable

Funding Foundation Only Employees & Foundation Employees & Foundation

Company Only

Tax Efficiency Yes, but narrow scope Yes Yes No

Equitable & Confidential Selection Process

Not guaranteed Not guaranteed Yes Not guaranteed

Program AdministrationNeeds

Foundation’s responsibility: - IRS Requirements - Compliance - Staffing- Grant selection/disbursement - Reporting/990- Policy- Technology

Foundation’s responsibility: - IRS Requirements - Compliance - Staffing- Grant selection/disbursement - Reporting/990- Policy- Technology

3rd Party’s responsibility

Company’s responsibility

Corporate Insights

INTERVIEW WITH MICHELLE NAGGAR REICHENBACH,

PRESIDENT OF THE TAKE CARE RELIEF FUND AT MARRIOTT

INTERNATIONAL

Why is corporate relief philanthropy impactful to your employees?

What were the key drivers for Marriott pursuing employee relief

program?

What are challenges & wins you experienced as you approached the exploration & launch of an employee

relief program?

How does Marriott think about supporting the WHOLE employee?

To learn more about what was included in this agenda, visit:

www.e4erelief.org

facebook.com/e4erelief

linkedin.com/in/e4e-relief