By David Callahan. Originally published on Inside Philanthropy.
If you’re attuned to either corporate philanthropy or the tech industry, you’ll know that the Bay Area tech firm, Salesforce, is unusually committed to doing good in the world along with making a profit.
Maybe you’ve heard of the “1+1+1” model of philanthropy that founder Marc Benioff embraced when he started Salesforce in 1999—namely, that the company would donate 1 percent of its earnings, 1 percent of its products, and 1 percent of employee time to charitable causes. Or maybe you know that Benioff himself has been a major leader lately in pushing the tech industry to do more philanthropy. Along with his wife, Lynne, he’s given over $200 million to local hospitals and has worked in the past year to rally tech leaders behind anti-poverty work.
That’s pretty much what I knew when I got on the phone recently with the president of the Salesforce Foundation, Suzanne DiBianca. What I learned from her, though, is that the company’s philanthropy’s goes further—and is more interesting—than the basic facts suggest.
Before getting into the details, let me make this general point: Corporate philanthropy has become really interesting lately. Sure, plenty of companies still just mail it in, with pedestrian giving programs and, even worse, giving that seems brazenly hypocritical—like, say, junk food companies donating to fight obesity. But the overall trend is toward more sophisticated corporate philanthropy at a larger scale, as well as grantmaking that prioritizes low-income communities. Recent data even suggests that corporate funders give more to such communities than private foundations.
To be sure, all this largesse is a drop in the bucket compared to the vast profits companies have reaped lately, in part by aggressive cost cutting that has driven down wages for many Americans workers. But the new corporate philanthropy does seem to indicate that more business leaders now see a need to tack in a socially responsible direction—back toward an earlier model of postwar capitalism whereby CEOs felt beholden to many stakeholders, not just to shareholders fixated on quarterly earnings.
Salesforce is a leader in this new era, one with significant influence, and it’s worth taking a close look at how it does its philanthropy—especially right now, given what’s cooking at the Salesforce Foundation. Here are a few things to know about this pioneering corporate funder.
Philanthropy Is “Baked In”
At most companies, philanthropy is an afterthought—you know, the thing a business does once it’s making big money. But at Salesforce, giving was “baked in” to the company from day one, says DiBianca, who’s been leading the Salesforce Foundation since it began.
Before Benioff created Salesforce, he had worked at Oracle for many years, and done well—well enough that, during the 1990s, he thought about leaving business and turning his attention to philanthropy. But in 1997, he got excited about the idea of combining his two greatest interests. Benioff has written: “There’s no reason why your business, your personal philanthropy and your corporate philanthropy can’t be integrated. On the contrary: If you can get all the wood behind one arrow, that’s how you’re going to increase your impact.”
With Salesforce, Benioff imagined a new kind of company resting on a three-legged stool. It would operate with a new technology model (cloud-based software), a new revenue model (subscriptions), and a new philanthropy model (1+1+1). The formula has proven to be a winner: Salesforce, which Forbes has repeatedly ranked as “the world’s most innovative company,” recently ascended to the ranks of Fortune 500 firms.
Now, in terms of its philanthropic goals, Salesforce is hardly unique in giving through several familiar channels—employee time, in-kind donations, and grants. But it’s been unusually ambitious in regard to each of the channels—and in maximizing the synergies between them.
Most notably, Benioff’s decision to set aside 1 percent of equity, pre-IPO, for philanthropy was an unusual move, and ensured dedicated resources for giving in the company’s early days. Salesforce went public in 2004, and that equity slice fueled its giving in subsequent years. (Now grants are funded out of general revenue.) One can argue whether 1 percent equity is the best formula for corporate giving, and how meaningful it is over the long term if a company gives that money away early on, as Salesforce did. But the symbolic value of a pre-IPO 1 percent commitment is huge—speaking volumes about the overall moral purpose of a company.
The way that Salesforce makes donations of its products is also unusual, and has been a boon to the nonprofits. Pretty much every sizeable nonprofit needs the kind of customer relationship management software that Salesforce makes, and the company has given free or deeply discounted products to over 25,000 nonprofits. Through its Power of Us program, the company offers 10 licenses of Salesforce for free to any eligible nonprofit organization, and sells additional licenses at an 80 percent discount. In turn, it takes the money earned from nonprofit sales and invests it “back into sector-specific product enhancements, new training, programs, and grants expansion,” as Benioff has described it. In other words, Salesforce’s model of product donations basically operates like an in-house social enterprise. Interesting, right?
As for employee volunteer time, Salesforce gives employees six paid days a year to dedicate to volunteering, and 80 percent of employees volunteer in some way—a rate three times that of most corporations. DiBianca says the company also provides matching grants for employee donations, as well as making $1,000 available for any employee to give to a nonprofit of their choice, once they’ve completed at least 40 hours of volunteering. She describes the company’s overall goal here as nurturing “citizen philanthropists,” and talks about how employees don’t just give during their time at Salesforce, but “take these values with them when they leave.”
Salesforce has 16,000 employees, and getting to know them can be a smart move for nonprofits. If you get a bunch of Salesforce people excited about your organization, they can direct significant funds your way. DiBianca cites the example of Playworks, a group that promotes recess and play for school kids. It’s a favorite of Salesforce employees and, as a result, has cumulatively received hundreds of thousands of dollars in support.
The Salesforce Foundation looks for opportunities to hook up its employees to causes that tap knowledge of technology and STEM subjects as part of a broader strategy of aligning Salesforce’s philanthropy with its expertise. That’s often meant providing tech training to youth in schools and at the company itself. Of course, the motive here is not only philanthropic. Like many tech leaders, Benioff has spoken with alarm about America’s weakness in training the STEM workers of tomorrow. And Salesforce is just one of many companies that gives attention to STEM education in its philanthropy.
A Big Bet on Local Schools
The Salesforce Foundation has long given grants to a wide range of organizations, but a few years ago it decided it wanted to double down on one overriding priority, and it chose improving San Francisco’s schools. After meeting with the mayor and superintendent of the San Francisco Unified School District (SFUSD), Salesforce settled on an even narrower focus: improving middle schools. “We decided this was a place to make a big bet,” DiBianca says.
What’s more, Salesforce decided to channel its support directly to SFUSD—a notable choice at a time that many funders take a dismissive view of public systems, and instead back charters and educational nonprofits. Indeed, it was precisely because so few funders help public systems that Salesforce saw an opportunity. “Nobody is doing it,” DiBianca says, calling the state of public education “abominable.”
Salesforce started with a $3.5 million gift to SFUSD in 2013. Then, in 2014, it gave $5 million. DiBianca says the foundation will probably give even more this year. Much of this grant support has gone to fund infrastructure and technology improvements, an area where the school district is particularly weak. But the foundation has also made $100,000 available to each middle school principal, through an innovation fund, to spend as they see fit. News of this fund was greeted with wonder by principals, and even tears in some cases. After years of budget cuts and tight restrictions on funding, nobody had ever given them a bunch of money to spend freely.
To DiBianca, though, the most exciting thing about Salesforce’s big bet on the schools is that so many employees are getting involved, through volunteering and mentoring. Salesforce has 5000 employees in San Francisco, who live all over the city, and DiBianca says they have adopted every middle school in the city, putting in time and energy to help students.
Lately, the Salesforce Foundation has been ramping up a new effort to train local youth for tech jobs. Salesforce was among the local employers that pushed successfully to get SFUSD to create a computer science curriculum, with the goal of ensuring that more kids acquire the kinds of skills that employers really need. Meanwhile, Salesforce has been a leader in efforts to connect more youth directly to local tech companies through mentoring and other opportunities. DiBianca says there are some 22,000 tech companies in San Francisco, yet most high school students have never set foot in a downtown office and gotten a first-hand glimpse of how this world works.
Salesforce isn’t the only tech company that’s doing more to expand the horizons and opportunities for local youth. Other companies have also been stepping up lately, such as LinkedIn, Zynga, and Google. DiBianca says that the rising debate over economic inequality in the Bay Area—and nationally—“has been a catalyst” for more philanthropic activism in the tech community, which has come under heavy fire for fueling income stratification in the region.
In turn, no leader in the tech world has worked harder to seize this moment than Marc Benioff, who led an urgent push last year to get tech companies to commit $10 million to the Tipping Point Community, a group that fights poverty in the Bay Area.
Building a Movement
The new generation of tech philanthropists has often been criticized as brash upstarts so intent on disrupting philanthropy that they’re ignoring a century of valuable lessons and insights. I’ve argued in the past, though, that these stereotypes aren’t fair given the diverse array of funders emerging from this world.
Maybe the most accurate way to think about tech philanthropy is that it often combines new and old approaches, and what Salesforce is doing is a case in point. Yes, the company has been innovative in its giving, and Benioff has talked explicitly about disrupting corporate philanthropy, but in many ways, Salesforce’s charitable role is very familiar. It conjures up an earlier era of corporate responsibility, in which companies saw the communities in which they operated as important stakeholders. That ethos came under siege starting in the 1980s, as a harsh new focus on the bottom line rose to dominance, but now is making a major comeback—thanks in part to a mountain of new research on the benefits of social responsibility, but also thanks to the rise of CEOs like Benioff that really care, at a personal level, about giving back. Benioff’s own giving, I should add, is quite traditional, with its primary focus on meeting local healthcare needs.
Salesforce is well aware of its leadership role, and it’s keen on sustaining that role. Most notably, in 2014, Benioff and Scott Faquhar, co-founder of Atlassian, teamed up to lead a push to get 500 companies to pledge to follow a 1+1+1 model of corporate philanthropy.
DiBianca says that the focus of the push is on pre-IPO companies, including those still in the start-up phase. The earlier this commitment gets baked into companies, she says, the more likely it is to really take root—and that’s especially true of the pledge to give 1 percent of equity, which is a big step for any start-up.
To push the 1 percent pledge effort, DiBianca has been working with venture capital firms, incubators, and others who are nurturing a new generation of entrepreneurs. The angel investor Ron Conway, who sits on the board of the Salesforce Foundation, recently appeared at an event in New York to promote the 1 percent pledge among startups in the city.
So far, over 300 companies have taken the pledge, and DiBianca is optimistic about getting to the goal of 500—and sparking a movement that helps remake corporate philanthropy. “This can be a game changer,” she says.