Leave-Based Donation Programs Facilitate Hurricane Katrina Relief Efforts

In the past month, residents of the Gulf Coast region have suffered extreme hardship following the unprecedented damage and destruction caused by Hurricane Katrina. Americans across the country have answered the call to help once again, and aid is pouring in.

Leave-based donation programs, where employees can forego vacation, sick or personal leave in exchange for cash payments, can be a very effective tool for raising the level of charitable contributions.

Notice 2005-68 outlines the IRS’s approach to leave-based donation programs for Hurricane Katrina relief. Cash payments must be made directly from the employer to qualified relief agencies working with victims in the Gulf Region. A qualified organization to whom these funds may be distributed, includes: (1) federal, state, or local governments; (2) a non profit entity (e.g., the Red Cross) operated solely for public purposes; and (3) a post or organization of war veterans if none of its earnings go to a private person. Notice