In the aftermath of the Haitian earthquake, individuals, employers and corporations are interested in providing assistance to the victims through charitable organizations. The IRS provides a number of resources to help those involved with providing disaster relief through charities.
Aid to Individuals
Organizations may provide assistance to individuals in the form of funds, services or goods to ensure that victims have the basic necessities such as food, clothing, housing (including repairs), transportation and medical assistance (including psychological counseling). The type of aid that is appropriate depends on the individual’s needs and resources. Disaster relief organizations are generally in the best position to determine appropriate assistance.
A charity may provide crisis counseling, rescue services or emergency aid such as blankets or hot meals in the immediate aftermath of a disaster without a showing of financial need. Providing such services to the distressed in the immediate aftermath of a disaster serves a charitable purpose regardless of the recipients’ financial condition. For further guidance, the IRS provides additional information for donors and charitable organizations in Publication 3833 – Disaster Relief Providing Assistance through Charitable Organizations.
Donations to Disaster Relief Organizations
In these emergency situations, it is generally recommended that donations be made to an existing, recognized section 501(c)(3) charity to provide immediate relief. For instance, a religious organization like Catholic Charities or a relief organization like the Red Cross are existing organizations that have provided targeted disaster relief and emergency hardship assistance in response to natural disasters and other unforeseen emergencies. Community-based organizations and charities with a local presence often know best what assistance is needed, and they understand the social and cultural context of a disaster. Working with and supporting these types of existing organizations may prove to be a more efficient use of disaster relief resources.
Year of Deductibility of Contributions
On Jan. 15, 2010, U.S. House of Representatives leaders Rangel, Camp, Clyburn and Cantor introduced a bill that would allow taxpayers to claim a charitable deduction for the 2009 tax year for charitable contributions made to Haiti relief. If enacted, the legislation would allow an income tax charitable deduction for tax year 2009 for charitable cash contributions made after Jan. 11, 2010, and before March 1, 2010, for the relief of earthquake victims. Senate Finance Committee leadership has indicated that a similar measure would be introduced.
The Council on Foundations has asked the IRS to declare the Haitian earthquake a “qualified disaster” pursuant to section 139(c)(3) of the Internal Revenue Code. This would allow company-sponsored private foundations to be able to make qualified disaster payments to employees and their family members affected by the disaster.
McGuireWoods Nonprofit and Charitable Advisory Services
Nonprofit and Charitable Advisory Services provides advice and guidance that enables charities and other nonprofits to operate successfully in the increasingly complicated, regulated, and competitive environment facing nonprofits today.