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THE BLENDED VALUE MAP: Tracking the Intersects and Opportunities of Economic, Social and Environmental Value Creation October, 2003 ii We would like to thank the Skoll Foundation for its support of document publication costs that allowed us to distribute it free of charge to a variety of conferences and events. Hard copies of this document that were distributed by the Project Team were printed on 100% post consumer recycled paper. ISBN Reference Pending Copyright 2003, Jed Emerson. All rights reserved. www.blendedvalue.org iii In board rooms, on street corners, in trans-national corporations and grass-roots enterprises, there is a convergence of new thought and path-breaking practice that threatens the ways of past decades by giving birth to a 21st Century vision of investing and venture creation that holds the promise of true transformation. This document presents but a blurred snapshot of an international parade of diverse players and institutions. This dynamic explosion of activity cannot be captured by a single perspective or group of observers—it is beyond our individual capacities to truly track (much less understand the full implications of!) the deeply profound changes presently underway around the world. The construction of this map in less than five months would not have been possible without the incredible contributions of some of the people engaged in this global revolution. While the statements, conclusions and decisions made regarding what to include in this Map are the responsibility of the Project Team, this document—like the value revolution itself—is the product of many, many people. Simply listing the names of those who contributed to this effort does little justice to accurately representing the time, thought and creative passions invested by these people, and others not on this list, in helping make possible not only this introductory map, but the stunning changes taking place around us all. Having had the luxury of reading countless thoughts and engaging in what are in every way thrilling conversations, we would like to thank you for your contributions to both this modest project and the promise of a changed world. An impressive list of the individuals who gave their time, ideas and energy to help bring this effort to reality is included in the first appendix of this document. The names of those contributing to this document were originally presented at the start of this paper, but our reviewers recommended we instead conclude with those names. Despite our deep thanks and appreciation for all who contributed to this work, we have chosen to follow that advice. We strongly encourage readers to review the full participant lists in Appendix A to fully appreciate the breadth of contribution to this work. We would like to thank each of the participants for their time and contributions. iv In addition to the contributions of the participants in numerous meetings, conversations and interviews, the following people made significant and extraordinary contributions to the quality of the final paper by agreeing to take time out of their summer holidays to read, review and critique various versions of what has become this final document. We would like to thank them for their thoughts and insights that helped make this map a worthy starting place for our future discussions: First Name Last Name Organization City, State Kim Alter Virtue Ventures, LLC Washington, DC David Carrington London, England UK Lee Davis NESsT Providencia, Santiago Chile Greg Dees Duke University Durham, NC Fran Eaton Council on Foundations Washington, DC Nicole Eschardt NESsT Providencia, Santiago Chile Tim Freundlich Calvert Foundation Bethesda, MD Caroline Hartnell Alliance Magazine London, England UK Paula Johnson Harvard University Cambridge, MA Gary Mulhair Global Partnership Seattle, WA Sara Olsen Social Venture Technology & Consulting Kensington, CA Greg Ratliff Independent Advisor Chicago, IL Paul Shoemaker Social Venture Partners Seattle, WA Marnie Sigler The Hewlett Foundation Menlo Park, CA Woody Tasch Investors' Circle Brookline, MA v Finally, this mapping process would not have been possible without the financial and strategic support of our Investor Group, consisting of the William and Flora Hewlett Foundation Omidyar Foundation David and Lucile Packard Foundation Skoll Foundation Surdna Foundation Center for Social Innovation at Stanford University We offer our thanks to the Presidents, Directors and Staff of these organizations who contributed to bringing this project from thought to reality. An effort of this scope could not have been completed without significant dedication of a great core group. The research, thinking and writing which resulted in this paper and supporting documents are the product of a Project Team consisting of Jed Emerson Lecturer Stanford University Graduate School of Business and Senior Fellow William and Flora Hewlett Foundation David and Lucile Packard Foundation Sheila Bonini Senior Research Fellow William and Flora Hewlett Foundation Kim Brehm Administrative Assistant William and Flora Hewlett Foundation With the assistance of Oriana Chu, Wendy Chu, Victoria Chu, and Ashley Slape as Project Interns. vi (This page intentionally left blank) vii Opening Thoughts “As we work to develop the New Metrics, we must not let the perfect be the enemy of the good.” Steve Rochlin Boston College “Some funders have been wedded to below market options for nonprofits, whether or not these organizations have the possibility of using more market-like vehicles in which foundations might truly invest.” Luther Ragin F.B. Heron Foundation “The inertia of our experience pulls us into conventional directions. We must engage in group entrepreneurship to collaborate and become far more than the sum of the parts.” Bill Drayton Ashoka “All these silos share a blended quality and related challenges. The question is ‘How do we understand the very real differences between them and whether or not those differences really matter?” Michelle Kahane Ford Foundation “The most significant challenge before us is not deciding which company or NGO is ‘best’ or which of the many competing standards will win out—it is looking at how firm practice and the standards we hold them to will ultimately translate into stable systems that actually achieve the impacts we seek. The goal of mainstreaming a better practice is not a question of simple aggregation, but rather a complete transformation of total activity.” Simon Zadek AccountAbility viii Table of Contents Acknowledgements Opening Thoughts Table of Contents Foreword by John Elkington Introduction: Putting This Document Into Perspective ...................................1 Section One: Orienting the Map within the World ......................................... 7 Understanding the Blended Value Map:..............................................................8 “What This Is and What This Isn’t!” Language and Definitions Used in the Blended Value Map ..........................14 Section Two: Using The Blended Value Map................................................... 25 Where We Are— ...................................................................................................26 A Presentation of the Spectrum of Investors and Practitioners The Practitioners: Corporate Social Responsibility ..............................................................................29 Social Enterprise.......................................................................................................35 The Investors: Social Investing.........................................................................................................41 Socially Responsible Investing Community and Double Bottom-Line Investing Strategic/Effective Philanthropy...............................................................................49 Sustainable Development: Practitioners and Investors............................................55 Section Three ..........................................................................................................59 Exploring our Common Challenges: Cross-Cutting Issues, Themes and Opportunities Narrative Overview ..............................................................................................60 The Capital Challenge ..........................................................................................63 Measurement and Performance Metrics ............................................................77 Leadership and Organizational Development ............................................... 93 Government policy/regulatory/tax codes ...................................................... 105 Concluding Thoughts Regarding Cross-Cutting Issues ...............................113 ix Section Four .........................................................................................................115 Common Interests and Challenges: Moving From Individual Silos To Collaborative Value Creation Building Beyond Cross-Sector Collaboration: ................................................116 Overcoming Limits and Taking the Long View Collaboration is Dead; Long Live Collaboration! ...........................................121 Toward a Vision of Value Networking for the 21st Century Building an International Infrastructure .........................................................125 to Support the Pursuit of Blended Value Seven Recommendations for Advancing the Common Work of the Field 129 A Process of Dialogue and Seven Specific Projects ........................................133
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