Could distributions from "peer or employee emergency funds” held by foundations of universities, hospitals, businesses etc. be considered insider grants? The funds are held for employees in need but the employee-donors do not choose the beneficiaries and may not even know who receives help.
I am not sure what you mean by an “insider grant” but it sounds as though you are asking about the possibility of an improper “excess benefit” transaction with an insider. Since you say that the employees donate to the “foundation” that helps their peers in the event of personal emergencies, I assume that the foundation is a public charity (and not a private foundation) and that its program has been approved by the IRS. In that case, if that assistance is given only for legitimate need and in accord with your general eligibility criteria, even a grant to the family of an officer or director of the foundation is likely not to be considered an “excess benefit.” Treasury Regulations specifically provide that a charity is permitted to provide charitable assistance to a “disqualified person” who is within the charitable class to be benefited by the organization without triggering the excess benefit sanctions.
The foundation should be sure that a substantial number of others also receive such assistance, however, in order to protect the disqualified person from the charge of receiving a special personal benefit, which could be considered an excess benefit transaction.