The most successful businesses attract the best talent, have happy employees, and take care of their people. But what happens when one of those employees suddenly becomes injured or ill? What about employees who are confronted with unexpected expenses like hospital bills or who live through natural disasters? In the face of tragedy or chaos, having a support system to fall back on is invaluable. An employee assistance fund is one way to create that system for employees – both so that they can stay with their company and have the resources they need to avoid financial stress.
Let’s explore how you can set up an employee assistance fund for your business so that you can offer support to employees when they need it most.
What is an Employee Assistance Fund (EAF)?
Why Implement an Employee Assistance Fund?
How to set up an Employee Assistance Fund in 5 Steps.
1. Determine Which EAF Type is Best for Your Needs
2. Decide Who is Eligible
3. Set Your Budget
4. Design the Employee Hardship Application Process
Groundswell Makes EAF Management Simple
An employee assistance fund is a grant or interest-free loan offered by an employer to provide financial support to individuals facing unforeseen hardships.
You can think of an EAF as an employee financial assistance program or a safety net; it’s there to help employees navigate challenging situations without plunging into financial instability.
For many businesses, an EAF is one piece of a larger corporate social responsibility strategy that aims to engage and uplift employees. There are a few key reasons that an employee assistance fund can be so beneficial for businesses and employees alike, including:
Branding & Reputation: Creating an EAF showcases your company’s priorities to prospective talent and the community at large. This helps you create a positive brand image and establish yourself as a great employer in a market where top talent is in high demand.
The value of an EAF is clear, but how to create one from scratch is less so. Fortunately, a tool like Groundswell can help you streamline the process and save your team time and effort.
Below are the basic steps you’ll need to follow to begin establishing an employee assistance fund program at your organization.
There are two main types of employee funds that could fit into a financial assistance program, each with its own ideal use case:
There is no correct answer here; the best EAF type for your company will depend on your goals and what you think is right for your employees.
With the bare bones of your program established, it’s time to determine eligibility criteria. The first thing to focus on is defining your charitable class, which is the group of employees who will be eligible for assistance.
As you consider your charitable class, it helps to focus on specific circumstances that might impact a person’s eligibility, such as:
The goal is to outline a clear, objective charitable class that isn’t skewed by personal bias and doesn’t discriminate against employees of any kind.
It’s best to consult with legal counsel and tax professionals as you complete this step so you can ensure your definition and criteria comply with all relevant laws and regulations.
With a better idea of what your EAF program might look like, you can shift your attention to setting an appropriate budget. As you do, you’ll also need to look into fundraising opportunities, whether internal or external, to support your program over time.
This is also a good opportunity to outline your assistance amounts and consider how you’d like them to be organized. Do you want to stick to a per-request dollar limit? Would it make more sense to set a total request limit every few months or year? What about lifetime caps?
Set up a long-term plan – including a budget, fundraising strategy, and different types of hardships along with the services or coverage you’ll offer – for your program to gain internal support and ensure it doesn’t come at the cost of other valuable resources in your organization.
Navigating the employee assistance fund application process is one of the trickiest steps for many businesses to accomplish. Managing applications, fund distribution, and other administrative aspects of the program in-house gives you more control, but it also comes with downsides.
For one thing, the workload that comes with managing applications can put an undue burden on your staff. Likewise, creating a sustainable management system isn’t something every business can do.
And even if yours can, internal decision-makers may not have the same objectivity when reviewing applications as a third-party EAF management team.
So, what should businesses do instead? The best option is to outsource your EAF management – including overseeing the application process – to a platform like Groundswell.
Groundswell is the first corporate social responsibility platform to integrate employee assistance fund management, employee matching, and volunteering into one software tool. Employees can donate externally to non-profits, donate internally to the company EAF, and apply for assistance via the EAF from the same simple platform.
When you choose Groundswell to help you launch your giving platform and create your employee assistance fund, you can take advantage of benefits like:
We’re here to help you create, launch, and oversee a successful employee assistance program so you can give back to those who have helped your business become what it is today.
Schedule a demo with our team to see how Groundswell can help you maximize the impact your business can have on your employees.
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