April 6, 2020

Salesforce and Salesforce.org Combine to Drive Greater Philanthropic Impact and Success for Social Good Organizations

  • By TecHR News Desk
  • April 16, 2019
  • 1 Comment
Salesforce and Salesforce.org Combine to Drive Greater Philanthropic Impact and Success for Social Good Organizations

Nonprofit and education reseller to be combined into core Salesforce operations as scale accelerates

Salesforce, the global leader in CRM, announced that Salesforce.org, the independent nonprofit social enterprise, will be integrated into Salesforce. With Salesforce.org, Salesforce will scale its philanthropic efforts and create strategic synergies and operational simplicity that will enable the company to drive even greater success for its nonprofit, education and philanthropy customers.

When Salesforce was founded in 1999, the company pioneered the 1-1-1 model of integrated corporate philanthropy, donating one percent of its equity, product and employee time to communities around the world. To date, Salesforce and Salesforce.org have provided technology for free or at a discount to more than 40,000 nonprofits and education institutions and donated more than $260 million in grants. Employees of both Salesforce and Salesforce.org have volunteered 3.8 million hours of their time in their communities.

Combining Salesforce and Salesforce.org into a new nonprofit and education vertical reinforces the strength of Salesforce’s philanthropic model. Salesforce will extend this model by continuing to provide free and highly discounted software to nonprofits and education institutions around the world and investing in local communities through employee volunteering, strategic grants and matching employee giving up to $5,000 per employee annually.

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Details Regarding the Business Combination

In the process of combining the two organizations, Salesforce.org will convert from a California public benefit corporation into a California business corporation and Salesforce will pay a one-time cash purchase price of $300 million for all shares of Salesforce.org. The $300 million will be distributed to the independent Salesforce.com Foundation, a California nonprofit public benefit corporation and 501(c)(3) organization, for further distribution by the Foundation for future philanthropic purposes. The company will make additional contributions to the Salesforce Foundation.

Salesforce will create a new nonprofit and education vertical led by Salesforce.org CEO Rob Acker. The new vertical will be responsible for the sales, marketing and customer success of the Salesforce Customer Success Platform to the nonprofit and education communities, as well as the development of Salesforce.org’s Nonprofit Cloud, Education Cloud and Philanthropy Cloud vertical applications.

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The closing of the combination is subject to approval by the Attorney General of California and other customary closing conditions. Upon the closing of the transaction, Salesforce will terminate its current reseller agreement between Salesforce and Salesforce.org, and Salesforce will incur a one-time non-cash accounting charge in the fiscal quarter in which the transaction closes. Salesforce currently estimates that this non-cash charge will be approximately $200 million, but the final amount will not be determined until the closing of the transaction, and such estimate is subject to change. The one-time non-cash charge will be reflected as an operating expense for both the company’s GAAP and non-GAAP results.

FY20 Revenue: The combination with Salesforce.org is expected to increase the company’s full year fiscal 2020 revenue by approximately $150 million to $200 million, depending on the transaction close date.

FY20 EPS: Guidance updates for GAAP EPS are not currently available for the reasons noted below and the company expects to provide the applicable updates following the close of the transaction. The company now expects FY20 non-GAAP EPS of $2.54 to $2.56. This estimate reflects the anticipated impact of the one-time, non-cash accounting charge referenced above.

FY20 Operating Cash Flow: The company continues to expect full year fiscal 2020 operating cash flow growth of 20 percent to 21 percent year-over-year.

These estimates assume a fiscal second quarter or early fiscal third quarter close date, and actual results could differ materially based on the final transaction close date. The company is not currently able to prepare a forecast for the full year impact of the combination on GAAP EPS, and therefore is not able to provide a reconciliation for such amounts. Salesforce expects to be able to provide this update following the close of the transaction. The impact on GAAP EPS is expected to be more significant than for non-GAAP EPS due to the additional stock-based compensation charges and the impact of other various non-cash items, including income tax adjustments.

The guidance above also assumes no change to the value of the company’s strategic investment portfolio resulting from ASU 2016-01, as it is not possible to forecast future gains and losses.

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TecHR News Desk

The TecHR News Desk represents a team of tech journalists who coordinate trending stories and breaking news on behalf of the TecHR Series newsroom.

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  1. Pingback: TecHR Interview with Andres Blank, Co-Founder & CEO at Fetcher | HR Innovation Co

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