Blended Value

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Concept that is part of the inclusional capitalism movement:

From: http://www.blendedvalue.org/


Definition

"Value is what gets created when investors invest and organizations act to pursue their mission. Traditionally, we have thought of value as being either economic (and created by for-profit companies) or social (and created by nonprofit or non-governmental organizations). What the Blended Value Proposition states is that all organizations, whether for-profit or not, create value that consists of economic, social and environmental value components—and that investors (whether market-rate, charitable or some mix of the two) simultaneously generate all three forms of value through providing capital to organizations.

The outcome of all this activity is value creation and that value is itself non-divisible and, therefore, a blend of these three elements.

While all value naturally consists of a blend, certain investors and organizations are intentionally attempting to create and maximize the impact of this value. The key areas in which both investors and organizations are working to maximize this blended value are:

(http://www.blendedvalue.org/)


Discussion

Mark Beam on how blended value is an attempt to overcome the two-pocket theory which splits for-profit and philanthropic activity:

"traditional investors inherited two-pocket thinking from carnegie and his wealth essays - one pocket is my "make as much money as i can pile" and in the other pocket i have my philanthropy pile. we are aiming inbetween - some call it the blended value as jed emmerson has labeled it. after making the goodcapital pitch to investors it is amazing how deep this two pocket thinking extends... its really tough to get investors to the middle. to accept less as an investment. to receive anything back as philanthropy."

typically foundations do not fund expansion. neither do VC's in this space unless you can promise 35 % returns annually. but what is wrong with 10-20% returns if you are hiring at risk youth as staff, reduce carbon footprints, or making local food more accessible? goodcap tries to fill that gap with capital. as michel says its about turning "the logic of capitalism on its head (profit becomes a means instead of an end)."

there is a gaping whole between top corporations ranked by size who want to start being "good" (the SRI market) and social enterprises that bake in social and financial return at the outset. this is where my partners in collectiveintelligence.net are going to play- right down the path that sam describes: doing the hard work of connecting the established hierarchically-organized economies with the emerging networked economies.

xigi on the other hand looks at the blended value, or good capital market as an emerging market that requires tools for discovery; assistance in clarifying the landscape, making it clear to investors and thus reducing friction- by doing so we increase the flow of capital to good. this is an emerging market with a 30 year history beginning with affordable housing...see my attention curve, a take on gartner's hype curve to see what might be in store." http://www.xigi.net/2007/06/04/attention-curve-the-capital-market-for-good.html


Examples

Good Capital

Collective Intelligence