Photo Credit: Salesforce
Salesforce announced recently that it is acquiring its own charitable foundation Salesforce.org for $300 million. And this deal could add as much as $200 million to Salesforce’s annual revenue as a result.
Salesforce.org is an official software reseller of Salesforce’s software. The charitable foundation also distributes grants and also offers Salesforce’s software for nonprofits and educational institutions for a discount or for free.
As part of the deal, the group’s discounted sales revenue is going to be rolled into Salesforce’s financials. And Salesforce.org CEO Rob Acker is going to continue running the unit as a vertical focused on non-profits and education sectors.
By combining Salesforce and Salesforce.org into a new nonprofit and education vertical, it strengthens Salesforce’s philanthropic model. And Salesforce will extend this model by continuing to provide free and highly discounted software to nonprofits and educational institutions. Plus it will invest in local communities through employee volunteering, grants, and matching employee giving up to $5,000 per employee annually.
The $300 million merger fee is going to go towards the Salesforce.com Foundation, a California nonprofit public benefit corporation and 501(c)(3) organization — which will use the money for future philanthropic purposes. Salesforce.org is also going to convert from a California public benefit corporation into a California business corporation.
In conjunction with this deal, Salesforce updated its guidance for the fiscal year 2020 to include the merger. As a result of the merger, Salesforce is forecasting its full-year revenue to grow $150 million to $200 million.
Ever since Salesforce launched in 1999, the company developed a 1-1-1 model that integrates corporate philanthropy and donates 1% of its equity, product, and employee time to communities around the world. So far, Salesforce and its philanthropic arm provided technology for free or at a discount to over 40,000 nonprofits and educational institutions. And it donated over $260 million in grants. Plus Salesforce and Salesforce.org have volunteered 3.8 million hours of their time.
