A mortgage broker group has launched in New South Wales, bringing an entirely rethought approach to the home loan process and unprecedented tax breaks to the borrowers it services.
Benevolence Finance Group indentifies as a “social enterprise” as it strives to harness the power of business to instigate meaningful change. The broker, based in the Macquarie University Incubator, invests a portion of each commission into select charities which are deductible gift recipients, enabling borrowers to empower others and save on taxes simply through taking out a home loan – a “first of its kind” scheme.
There is a calculator on the group's website which estimates the tax savings available with specific transactions given the loan amount and taxable income range of the borrower in question.
“We operate just like any other business, but our priority, our bottom-line goal, is improving the lives of our customers, their families, their communities, and the world – not profit. For us, that’s secondary, to remain sustainable,” explained co-founder and principal mortgage broker, Samuel Philipos.
Benevolence Finance Group is committed to transparency, with each customer being informed of exactly how much is being invested into the charity on their behalf and provided a tax-deductible receipt.
“One thing to be clear on is we look at up-front commission. We look at it after tax and after taking out the 5% aggregator fee. Whatever is left over, we half that. We’re trying to be bold. We’re not just talking the talk. We’re talking with our money,” said Philipos.
To underscore the commitment to serving people over making profits, the group has removed commission incentives for its brokers.
Kicking off with a soft launch just a few week ago, Benevolence Finance Group is currently servicing friends, family and communities around the Macquarie network. They’ve received generally positive responses, aside from some concern around if people are being provided access to the same products offered at other more traditional brokers.
“There’s nothing here that’s risky. We’re just like any other broker: we’ve got the same diplomas, the same industry association memberships. We’re compliant just like every other broker. We’ve got access to the same products, so there’s truly no diminishing in quality,” Philipos assured.
“We want to show people that there isn’t always a cost to helping someone else. We’re working with an innovative model where you actually get a benefit, not a cost, to helping your neighbor.”
There are two charity partnerships currently in place. Hunger Project provides microfinance to vulnerable women to empower them with the skills, knowledge and resources needed to break the poverty cycle themselves. Generous & Grateful supports bushfire relief work and the families impacted by this year’s brutal summer season.
While the group is interested in expanding the charities it supports in the future, it’s committed to ensuring the quality of the partnerships remains sound.
“We need to make sure there are safeguards in place to maximise the impact of what we’re doing. We want to make sure every dollar we invest in our partners is driving sustainable solutions and is having an impact – and that we know what the impact is,” said Philipos.
“Every time we contribute in a transaction, we want to know exactly how many people are impacted, what the funds are doing, and create a way to facilitate an emotional connection between our customer and the recipient, for our customers to get a better feel for what their impact was.”
Benevolence Finance Group grew out of the disillusionment that Philipos developed over the five years he spent in lending at a major bank.
“When I was at the major bank, I knew there was another bank right around the corner that offered a much better deal for that client, which would mean their position might’ve been much better five, ten years down the road. I kept finding myself questioning what my role was contributing to,” he explained.
“Money was never what got me motivated or passionate about my work. How I could help improve people’s lives is what I find compelling.
“Our objective at Benevolence Finance Group is to work with other brokers, work with other aggregators, work with the industry as a whole to collectively disrupt the way things are being done now. If we can harness the power we have in the finance industry to reshape the status quo, I think we can accomplish amazing things.”