Next Generation Philanthropy and Impact Investment
Recently, we sponsored the Next Generation Philanthropy and Impact Investment workshop stream over two days at Festival for the Future 18 and were delighted to host a panel of incredible wahine from a variety of businesses and organisations.
The panel included Lani Evans, Chair of Thankyou Payroll Board of Directors, Board Member of the Peter McKenzie Project and Head of Vodafone NZ Foundation; Brooke Roberts, Founder of Sharesies; Georgie Ferrari, Chief Executive of Wellington Community Trust; Hannah Duder and Bonnie Howland from Indigo and Iris; and our very own CEO, Christina Bellis.
Each panelist was given an opportunity to tell their story about investment and giving. The journey looks very different for many people. It’s been quite a journey for us at Thankyou Payroll and we’d like to share that story with you here. Below is the story direct from our CEO.
Hey there! I thought I’d steal a few minutes to tell the story of Thankyou Payroll and how we’ve built our business on philanthropic values. Thankyou Payroll aims to be the leading experts on payroll issues and business-based philanthropy in New Zealand. We’re holistic thinkers, promoting generosity, environmental action, excellent internal culture, consistent improvement and great customer service, all while operating as a financially sustainable, profit-generating business.
Since inception, Thankyou Payroll has been a social enterprise, putting purpose and profit side by side. In the past 8 years we’ve been disrupting a very traditional sector — payroll and taxes — to set an example that any business can (and I’d personally argue should) include a triple bottom line approach: people, planet, profit — or social, environmental, financial.
Brief history: In 2006, the Government introduced a subsidy for payroll intermediaries (payroll platforms that also file payroll taxes: PAYE, Kiwisaver, etc) so Inland Revenue would get data digitally, moving away from paper-based filing. Our founder, known for his meticulous calculations, figured the subsidy was generous enough to run a business and offer the service free, and give $0.25 on each subsidy ($2) received to charity.
The software was built, the business registered, and shareholders sought to take the business to the next level. Friends & family invested in a good business with great values. We grew slowly at first, until Lani Evans came onboard in 2013 as CEO and seeded the opportunity around the country.
Key multipliers helped us grow our small business. Relying on word-of-mouth marketing, we were doubling our client base year-on-year. Many would argue our rapid growth was because we were free for users — but being ‘free’ was part of our philanthropic giving, how we distributed money back to the community, to charities and businesses who used our service.
As our business grew, so did our social and environmental outcomes. We’ve:
- saved not-for-profit’s an estimated $700K in-kind by providing free services, and donated over $200K to the community;
- planted hundreds of trees in carbon sink initiatives;
- strengthened our procurement policy, buying products and services that match our values;
- become carbon neutral.
We’ve done this by sticking to one hard fast rule: operating with our values at the forefront. This doesn’t mean we haven’t changed how operation looks.
A small business provides a certain amount of agility; the ability to pivot when you see a better, smarter, more efficient way of doing something, or something that just works better for you.
Here’s an example: We wanted to give $0.25 of the subsidy to charity and we let our clients choose the charity. This proved administratively heavy and a few dollars went here and a few dollars went there, etc. So we pivoted. We started Thankyou Charitable Trust (TYCT), a grant giving charity supporting community initiatives through a unique grant giving model. The $0.25 now went to TYCT.
We also learned a lesson from our ‘free’ model: we wanted to be 100% free, but people didn’t always trust it. “What’s the catch? Surely there’s a hidden cost. No way can it be totally free!” Society has a hard time believing people want to give something for nothing — and how could a business survive? Clients were skeptical, and it kept some away.
So we introduced optional ‘faster processing fees’ — our free plan became a 2-day processing time and we offered one-day or overnight processing for a nominal fee — pennies really — but this put a value on a premium service. Then we thought “This wasn’t exactly the plan, so how can we spin this and get it back to free?”
Our “Regular Giving” initiative was announced — clients could choose to give a monthly donation to a charity of their choice, and we’d waive all processing fees. This worked well, but at some point we thought “It’d be great to know who’s giving where” for our internal reporting on our philanthropic values. Again, that proved administratively heavy and some clients didn’t even realise they had chosen the Regular Giving model. We made a decision to re-work the policy and clients now gave the monthly donation to TYCT. We now have more transparency and know that our clients have donated $25K in the past two years back to the community.
Everything was humming, and we were growing exponentially. We didn’t have the advanced tech or the mobile apps that some of our competitors were building (who were receiving the subsidy and charging clients), but we had plans to build it — we were slowly making profit and putting it back into business development, giving to charity, and being environmentally responsible in our business operations.
Then the government announced proposed changes to payroll legislation. I can definitely see the benefits of modernising the IRD system, but it felt like we’d crested the mountain peak only to see another one behind it.
But, around here no challenge is insurmountable! We could clearly see the opportunity this presented us with — but we were going to need a bit of help to meet it properly. So we went to our community. The community we’ve been serving. The community who’s been growing with us. And we asked them to support us through an equity crowdfunding campaign. We started a sleepless 5-week campaign with PledgeMe and at the end we had 167 awesome new shareholders and $460K of investment for our upcoming projects. Unfortunately, the legislative changes meant we also had to change our free model, and introduce a monthly user subscription. Again, leading with our values (and our meticulous human calculator), we figured out that for the foreseeable future, we can keep our service free for the smallest businesses (3 or fewer employees) which will hopefully help them to grow, and we’ll always be free for registered charities.
We’re pushing hard to meet the opportunities ahead of us, and we plan to return investment to the shareholders who’ve supported us through dividend payments within 2 years. As the intermediary subsidy also comes to a close, we’re looking at different approaches for our giving model to Thankyou Charitable Trust.
So to sum up, it’s been vitally important for us to remain agile and adaptive, changing our model and/or our policies where appropriate, but never losing sight of our core values as they are what drive our business, and attract the amazing people who choose to work with, invest in us, and make Thankyou Payroll a thriving and successful Social Enterprise.
Thankyou Payroll is a social enterprise providing online payroll and PAYE filing services for businesses and charities in New Zealand. If you want to be part of something more than just payroll, sign up to Thankyou Payroll here.
Next Generation Philanthropy and Impact Investment was originally published in Thankyou Payroll on Medium, where people are continuing the conversation by highlighting and responding to this story.