Salesforce will acquire Salesforce.org for $300 million
The deal could drastically redefine the relationship between Salesforce and its nonprofit customers.
Salesforce.com Inc. and Salesforce.org announced Monday that the San Francisco tech giant will acquire the independent nonprofit for $300 million. Salesforce will absorb Salesforce.org into the Salesforce entity as a new business vertical. Rob Acker, the current CEO of Salesforce.org, will lead the new nonprofit vertical.
In Monday’s statement, Salesforce said it would continue to “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.”
There have been no announcements of any immediate changes impacting customers.
Why we should care
The announcement has left customers — along with investors — confused as to what this means for existing customers. Many are questioning how the changes will affect nonprofit organizations currently using the software at deeply discounted rates. Nearly 40,000 nonprofit organizations, including the American Red Cross, Change.org, Girls Scouts of the USA and countless educational institutions use discounted or free software through Salesforce.org.
By integrating Salesforce.org into Salesforce, the company will also acquire nonprofit customers as part of the new vertical. This move may help Salesforce create the efficiencies their business needs, such as increasing revenue margins, which in turn could increase costs for nonprofits. Nonprofit organizations should consider the implications of price increases and prepare their teams for the potential changes to come.
The cash from the deal will be distributed to the Salesforce Foundation, the company’s nonprofit entity, for future philanthropic endeavors.