Payroll giving, or donating part of your wages to charity, may be common in other countries, but it didn’t exist in the Netherlands. Until Sandra van Beest spotted an opportunity and founded The Social Handshake.
In 2019 Van Beest struck a deal with the Dutch tax authorities, under which employers can donate to good causes tax free. The online platform, called Loongift in Dutch, allows employees to donate part of their salary to a good cause, with or without an additional contribution from their employer.
The Social Handshake will in turn give 100% of the donation directly to a chosen charity, cutting out the cost of fundraising. It also screens the charities on transparency, effectiveness and efficiency.
The idea for The Social Handshake came four years ago, when Van Beest had moved from working in the charity sector to a consulting role at Boston Consulting Group.
“I noticed that very gradually I was contributing less and less to this world,” Van Beest told Impact Investor. “I had a very busy job, and I just didn’t get around to it.”
After the birth of her daughter Van Beest had what she described as a wakeup call.
Watching the images of the civil war in Syria on television, Van Beest said, made her realise “I wanted to do something, but at the same time I realised that I wasn’t doing anything anymore.”
Van Beest started talking to the people around her, and other members of the business community, and discovered that a lot of people felt the same way.
“They wanted to do more, but they didn’t get around to it, and if they did donate money, was it well spent?,” she said. “Many people really want to give. So I thought, why not give via your salary? It turned out this did not exist in the Netherlands and that’s how the idea for The Social Handshake was born.”
Twelve months after the platform went live, The Social Handshake has signed up a number of large Dutch companies including law firm De Brauw Blackstone Westbroek, online learning platform Squla, IT company Incentro and mobile brokerage company Bux. Half of the companies taking part match their employees’ donations.
‘Make giving easy’
The platform, which is popular among the Generation Z and Millennial generations, offers payroll giving to 26 charities, including War Child, Alzheimer Nederland, Free Press Unlimited, the Female Cancer Foundation and UNICEF Nederland.
Although 100 charities have asked to be included on the online platform, “we won’t be able to add all of them,” Van Beest said.
“Our aim is to make giving easy, and if you give people too much choice, they tend to be overwhelmed and end up not giving anymore.”
Its most popular charity is Justdiggit, a Dutch NGO that combats global warming by re-greening Africa. The organisation works closely with local communities and local partners to restore dry land through proven techniques including rainwater harvesting, tree restoration and developing grass seed banks.
‘Profitable in two years’
Although the Amsterdam-based social enterprise had a slow start due to the coronavirus lockdown in the Netherlands this time last year, it is now making strides.
The number of companies taking part and the total donations have doubled in the fourth quarter compared to the first three quarters, according to Van Beest.
The Social Handshake, which receives a fee from the companies who use it, is still in its startup phase. Although it has yet to make a profit, it is aiming to do so “within two years,” Van Beest said.
Its online platform “gives companies insight into what their employees find important,” said Van Beest. “We obtain data on men and women from the collective data of all 28 clients, but we do not communicate this on a one-to-one basis per company. We do communicate which themes their employees care about, such as for example sustainability or press freedom, and that is something companies often find interesting.”
Women on The Social Handshake platform are more likely to donate to good causes compared to men. But once male employees decide to give to charity, they tend to donate more money than women.
The average donation is around €27 per month, with some higher-paid workers giving between €100 and €200 per month, Van Beest said.
The Social Handshake was funded by a number of angel investors including Netherlands-based Velocity Fintech Ventures, which is supporting the platform from its impact investing pool.
The Social Handshake is currently busy with a new fundraising round, which it hopes to close on 1 April, Van Beest said. “Most people want to do good, we just make it easier for them to do so,” concluded Van Beest.