Businesses can make disaster relief grants directly from the corporation, or from its corporate giving program, to any section 501(c)(3)public charity. An added plus is that such gifts are eligible as charitable deductions for the company. If the company wishes to assist with a disaster outside of the United States, grants may be given to a domestic public charity with the understanding that the funds will be used for the charity’s international activities in a particular non-U.S. country.
- Deductibility of Contributions. Contributions of products and grants provided to charities and government bodies for the purpose of disaster relief will be deductible when given to a 501(c)(3) charity based in the U.S.
- Inventory Property. Although the deduction for gifts of most inventory property is limited to the company’s basis in the property, there are some exceptions that may afford companies a greater deduction. In disaster relief situations, the most relevant is gifts by C corporations of inventory property to charities for the care of the ill, needy, or infants. Companies making these gifts may receive a charitable deduction up to twice the cost basis of the property. Because of the complexity of these rules, companies should consult with their advisors to determine the amount of any deduction for contributions of inventory.
When a disaster takes place outside the United States, grants from a corporate giving program to a non-U.S. organization without a section 501(c)(3) designation will not be eligible for a charitable deduction but, if made by a foreign subsidiary, might be deductible under the foreign country's tax laws. As with other grants to organizations, particularly those overseas, the company should consider what steps it should take to comply with counter-terrorism measures. See the Council on Foundations’ international grantmaking website at www.usig.org  for detailed information on this topic.
Any relief grants to non-charities, such as a chamber of commerce, or to an individual, will not be deductible as a charitable contribution by a corporation. See Assisting Corporate Employees with Charitable Dollars: A Legal Framework  to learn how non-charitable grants may be made to employees in the case of a qualified disaster .
For many corporate donors, a fairly simple and immediate way to provide disaster aid is to work with a local community foundation*. Community foundations are located in regions throughout the country, and are able to move quickly to establish funds to address emergent needs. Many already have funds established for this purpose.
If the plan is to provide disaster relief to the general population, and not the company’s own employees, a fund at a community foundation can be a preferred giving vehicle.
In times of qualified disaster , there is a safe harbor for businesses to use a fund at a community foundation to assist company employees. This safe harbor is only available during a qualified disaster, and not for state or locally-declared disasters. Assisting Corporate Employees with Charitable Dollars: A Legal Framework  has more.
To be eligible for the safe harbor, funds must:
- Have as their sole purpose providing relief in the case of a qualified disaster 
- Serve a charitable class
- Select recipients based on objective determinations of need
- Use either an independent selection committee or one where a majority of its members are not in a position to exercise substantial influence over the affairs of the employer
- Make no payment to anyone who is a director, officer, or trustee of the sponsoring organization or to any member of the selection committee, and
- Maintain adequate records demonstrating the recipients’ need for the relief provided
*Use our Community Foundation Locator  to find a local community foundation.