The Blog

  • May 9, 2019
  • Philanthropy is good business

    The other day Salesforce announced that it was integrating its philanthropic arm, the non-profit Salesforce.org, into the larger organization, Salesforce.com. This makes a round trip for “the org” as it’s sometimes referred to. At its founding Salesforce built its 1-1-1 model of philanthropy, in which it donated one percent of its equity, product, and employee time to communities around the world, into its core business.

    As you can imagine, such an endeavor starts slowly but builds momentum over time and to date Salesforce has donated over 3.8 million hours of employee time and more than $260 in grants. But at some point a few years ago, Salesforce created the org as a public benefit corporation under California law.

    That all went along swimmingly until the org developed its own vertical apps including the Salesforce Philanthropy Cloud, Nonprofit Cloud, and Education Cloud and voila, the org was in the software business. But it might not have had all of the resources a software company needs so merging seems sensible.

    Salesforce has been playing both a long game and a short one for a long time. The short game is easily understandable–they sell seats of use to corporations. This can include the company’s flagship CRM, partner apps, or development tools for those who want to roll their own apps. This makes perfect sense in the software business.

    The longer game, which takes some explaining, is more about culture transfer. As the company has evolved it has helped set standards for modern business and it has used what it built in an eat your own dog food way. That’s partly responsible for the Salesforce culture and it’s something the company is not shy about exporting.

    Cloud computing is a good early example of culture transfer. The cloud commoditized computing and made it possible for businesses to both get better and more reliable computing while also saving money. Today there’s virtually nothing you can do in your data center that you can’t do in the cloud, except maybe get hacked.

    Cloud wasn’t the only innovation, there’ve been major inflections in social media, and analytics just to pick a couple. At each point the company was selling more than software, it was teaching businesses new approaches and ways of doing business and with that come culture changes. Consider analytics and machine learning. Most of us will consider this just the latest new wrinkle in an industry that has had more than its share. But it leads to a culture change which is what digital disruption is–learning to trust numbers over gut instinct.

    The thing is, they’ve been at this so long that Salesforce is actually addressing a new generation of customers and users now and that’s why philanthropy, non-profits and education are so important. It’s doubtful that any of the clouds from the org will generate serious income for businesses that use them. But the real test of their value is in how they help businesses manage culture change.

    There have been numerous studies linking a business’ philanthropic efforts with employee job satisfaction and the younger the employee the more significant the effect. Philanthropy Cloud in particular has been instrumental in helping Salesforce to spread its 1-1-1 model around the business world. For instance, there are well over two thousand businesses that have adopted the model, and more being added weekly. But also, major players in the philanthropy world like The United Way, are big users and proponents because the Philanthropy Cloud helps non-profits extend their missions.

    So, it’s not too surprising to me to see the two corporations coming back together. Increasingly it’s likely that the non-profit/philanthropic/education solutions will have positive drag-on effects wherever the core technology goes. This looks like one more culture change sponsored by Salesforce and it might be the one with the most lasting power. Social techniques and analytics will be absorbed and blend into a company’s background, but this is different.

    Nearly four decades ago business thinkers decided that a company’s main and perhaps only responsibility was to the shareholders. Prior to that, there was a more nuanced view of stakeholders which included shareholders but also included employees, customers, and the community at large. Perhaps this begins to rebalance that trend.

     

     

     

     

     

     

     

     

    Published: 4 months ago


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