The Salesforce Foundation Business Model

The Salesforce Foundation Business Model:

Philanthropy is only an afterthought for many companies. However, at Salesforce, it was woven in the company’s fabric. The 1-1-1 was a winning formula that allowed the foundation to initially operate much like a traditional nonprofit where the funding is through significant grants from the sponsor company, and supplemented by other donations. The grants are then used to operate and provide services to community.

The foundation commercialized itself by being an official reseller of its parent’s products. In addition to the grant, the proceeds from reselling to nonprofits and education institutions were also now available, towards even more philanthropy efforts. The unique model of a hybrid 501(c)(3) and 501(c)(4) allowed the foundation to expand in proportion to Salesforce.com, scale its efforts beyond the depletion of its initial funding and continue to be relevant without incurring the additional burden of taxation. This further ensured that although the companies operate separately from each other, they are always much tightly integrated and thus aligned to each other’s operations. The inputs from the non-profit customers, in turn, help extend the customer base for the parent organization and responsively grow their software product. The insertion of the commercial component into the foundation’s operations makes it very much like its parent – a sales-driven culture.

While continuing to give back to the community, Salesforce.com continues its long-term strategy towards social responsibility, using its existing capabilities, recursively generating goodwill and ensuring sustainability of the foundation.