Corporate-Software Provider Makes Foray Into Nonprofit Market

In a move that some experts think could shake up the nonprofit-technology market, a leading

provider of corporate software, Salesforce.com, is giving its software to charities free or at a greatly reduced cost.

Salesforce started out as Web-based software designed to help salespeople keep track of customer information. Over time, industries asked the company to create versions tailored to their particular needs. But instead of developing a series of specialized products for different industries, Salesforce built an open data-management platform that would allow each client to customize the system.

Now, through its donation program, the San Francisco company is making up to 10 licenses available free to nonprofit organizations. Additional licenses cost $360 a year per user, roughly 80 percent less than the price that for-profit customers pay. Charities can then customize the software, like using it to track individuals who receive services from them or to record gift information.

$7-Billion Company

The opportunity to take advantage of a platform that Fortune 500 companies use is tantalizing to some in the nonprofit world.

ONE/Northwest, a Seattle charity that provides technology assistance to environmental groups in the Pacific Northwest, has helped several of its clients move to the Salesforce platform. The resources that the company has to invest in research and development is one of the reasons that the organization recommends the product, says Steve Andersen, a program manager at ONE/Northwest.

“Salesforce is now a billion-dollar company,” he says. “Their platform is going to get better faster than, for example, Blackbaud’s platform is going to get, because Blackbaud is a much smaller company.” (Salesforce’s total market value is nearly $7-billion, compared with a little more than $1-billion for Blackbaud.)

Costs to Customize

Blackbaud and other companies that make donor databases say that Salesforce doesn’t represent a threat to their businesses.

“They aren’t really a viable competitor in the nonprofit sector today, because the nonprofit world demands that you get them, and especially that you understand what the donor and the constituent is and how you relate to them and how you cultivate them,” says Marc E. Chardon, Blackbaud’s chief executive. “That’s just not built into a Salesforce automation product.”

Steve Wright, director of innovation at the Salesforce.com Foundation, which runs the company’s product-donation program, says the company’s software can be helpful to some organizations, but charities need to realize they will probably need to spend money to customize it. “You need to invest real resources to make this work,” he says.

Simple projects, like adapting Salesforce to manage a small nonprofit organization’s fund-raising efforts, can start in the $3,000 to $5,000 range. But the costs can increase significantly from there.

The Family Service Agency of San Francisco, for example, has paid a consulting company more than $124,000 to build a case-management system using the donated Salesforce software.

The nearly 120-year-old charity developed the system to track the more than 16,000 people who receive mental-health treatment and other social services from the organization each year. Switching from paper recordkeeping has cut in half the amount of time that psychologists and social workers spend on paperwork, freeing up more hours for them to spend with clients.

The new system is also improving care, says Melissa Moore, who has led the effort to develop the software and put it in place. The organization designed the case-management program so that it would measure clients’ progress toward their treatment goals, something that was difficult for clinicians to track when a single patient’s paper chart could be inches thick.

“At the end of the day, when there’s inept recordkeeping, it’s the clients who suffer,” says Ms. Moore.

Weighing Options

The Family Service Agency of San Francisco is one of more than 3,200 charities in 56 countries that are using Salesforce to run programs, measure results, and manage their fund raising.

Nonprofit-technology experts say Salesforce can be a good option for some charities, but not for others.

Peter Campbell, information-technology director at Earthjustice, in Oakland, Calif., says the software worked well at his last job, at Goodwill Industries of San Francisco, San Mateo, and Marin Counties, which used Salesforce to record donor data, manage clothing drives at local companies, and track job-training and job-placement information.

But while the product was an “awesome platform” for the chapter of Goodwill — which relies on its thrift stores for the lion’s share of its revenue and has a relatively simple fund-raising program — it doesn’t make sense for Earthjustice’s more sophisticated fund-raising activities, says Mr. Campbell.

“If you have a very full-featured fund-raising operation, then the amount of customization you’re going to have to do on Salesforce is probably going to end up being more expensive, more difficult, and probably in the end run, less suited to your needs than a Raiser’s Edge or something like that,” he says.

Salesforce’s approach depends on outside software developers building new tools that can run on the system and consulting companies that help customers tweak the system to meet their needs.

Those services are available in abundance for corporate customers, and there are signs of a nascent ecosystem springing up to serve nonprofit groups.

Exponent Partners, a 16-person consulting company in San Francisco, focuses entirely on helping charities use Salesforce to carry out their missions. Several consulting companies that primarily work with for-profit Salesforce customers have added employees to work with charities. And groups of charity officials who use Salesforce have sprung up to help one another in New York, Philadelphia, San Francisco, and Washington.

Two leading nonprofit-technology groups, ONE/Northwest and the NPower Network, an organization whose 12 affiliates across the country provide technology assistance to charities, have set up consulting programs that help nonprofit organizations adopt Salesforce.

NPower is also using Salesforce to build an information and referral system that would make it easier for government agencies and other entities that run social-service hotlines to refer cases to nonprofit groups and measure whether callers got the assistance they needed.

Integrating Information

Other nonprofit-technology providers are also starting to hitch their wagons to the platform.

Last year, Convio, in Austin, Tex., integrated its online fund-raising software with the Salesforce platform, making it easier for charities to move data between the two programs.

In September, Network for Good, in Bethesda, Md., began offering the Donor Management Suite, a Web-based fund-raising software package that combines its online-donation processing service with an e-mail program and Salesforce to store donor information.

Designed for small nonprofit organizations, the cost of the Donor Management Suite starts at $99.95 per month, with a set-up fee of $299.

The Foundation for the Preservation of the Mahayana Tradition, a Buddhist organization based in Portland, Ore., recently used Donor Management Suite to run an e-mail fund-raising campaign that brought in $127,000.

The organization could send e-mail messages from its old donor database, but it was a slow and awkward process, says Chuck Latimer, the organization’s development director. He says that sending the messages is much simpler with the new software.

He says the greater sophistication of the Salesforce platform, compared with the organization’s old donor database, will also allow the organization to track which donors are interested in which of the more than two dozen projects it has going at any given time, and make sure that the group sends the right information to the right donors.

And because the system is Web-based, the organization’s fund raisers can monitor results and send acknowledgments from wherever they are, as long as they have Internet access.

Says Mr. Latimer: “It was very easy to stay current and not come in and go, ‘Oh, my God, I’ve got 5,000 thank-you notes to do today.’”