International Encyclopedia of Civil Society

Living Edition
| Editors: Regina A. List, Helmut K. Anheier, Stefan Toepler

Blended Value

  • Jed EmersonEmail author
Living reference work entry


First introduced in 2000 (Emerson, Harvard Social Enterprise Series 2000), Blended Value is a theory of both capital and organizational value creation which posits that value itself is whole and non-divisible. Within a Blended Value framework, all value is understood as being generated (by organizations and the application of capital) through the interaction over time of three primary value components: social, economic, and environmental, which together comprise organizational value creation and capital returns. (Emerson 2000–2003).


We live in a bifurcated world that asks us to choose between doing well or doing good, making an investment or a grant, and working for a nonprofit/NGO or working for a for-profit. We are taught that there are trade-offs between the creation of social/environmental and economic components of value creation. Yet, most would acknowledge for-profit firms create both economic and social/economic value and NGOs create social conditions of economic worth. Value creation is not a question of either/or but rather both/and. The challenge is one of, first, framing an understanding of value as whole, integrated and blended, and, second, exploring how that value may be manifest in terms of how we manage our capital and corporations, whether that capital seeks philanthropic, near-market, or market rate returns and regardless of if we deploy that capital through for-profit, nonprofit, or cooperative organizations. Value is blended and our strategies of action should reflect that reality.

Historical Background

Traditionally, philanthropy and NGO/nonprofit corporations have been understood as the domain responsible for the creation of social value and impacts, with for-profit corporations and investors charged with the creation of economic value. While it was understood that (primarily through job creation and tax payments) there was an inherent element of social value to mainstream business, the fundamental value proposition of business was viewed as one of economics and returns to shareholders, whereas the value proposition of nonprofits was viewed as social and creating broader public good.

By the late 1990s, social entrepreneurship, corporate social responsibility, social investing, mission-related investing, sustainable and/or development finance, microfinance, venture philanthropy, strategic philanthropy, and a host of related activities had evolved. While each of these has its individual adherents and specific concepts/terms, when viewed as part of a larger movement, it becomes clear that what these activities share is an understanding of value creation as the product of more than the traditional “nonprofit versus for-profit” dynamic. Actors in each of these related silos of activity all understand value as not “either/or” (for-profit versus nonprofit; economic versus social/environmental) but rather “both/and” – a blend of economic, social, and environmental performance.

In terms of organizations, these initiatives demonstrated that for-profit corporations could manage for social and environmental impacts/value creation, while nonprofit organizations could seek to maximize various aspects of economic value and returns. In terms of capital, it is increasingly understood that investment funds could be structured to create not only economic value and return but also social and environmental value – and that mainstream financial investors should take social and environmental factors into account as they seek to maximize the performance/returns of their investment portfolio.

When viewed in total, what these various initiatives demonstrate is that rather than focusing first upon whether a corporation is nonprofit or for-profit, or whether an investment is generating social or financial returns, asset owners and entrepreneurs should seek to maximize the total Blended Value of both organizations and capital. Furthermore, by operating within a Blended Value conceptual and practice framework, one may more effectively understand the various types of value and multiple returns one seeks to create. With this framework in mind, one may then structure the most appropriate type of legal entity or investment strategy to best maximize the elements of the total Blended Value one seeks to generate through the application of capital and management of organizations.

Key Issues

Core implications of a Blended Value framework:

Unified Investment Strategies and Integrated Wealth Management

Asset owners have traditionally viewed the creation of economic value and financial returns as being completely separate from the allocation of charitable dollars and creation of social value. While this has been true of traditional asset management strategies used by pension funds, educational endowments, and other owners of significant assets, one clear example is that of private, endowed foundations.

Private foundations most often manage financial assets to maximize economic returns with no reference to whether those assets are being managed in alignment with the institutional, philanthropic mission. These financial assets usually amount to 95% of the total capital of a private, endowed foundation, while 5% of the annual payout is used for both grantmaking and to cover the administrative costs of operating the foundation.

Within a Blended Value framework, foundation trustees and fund managers design a unified investment strategy (UIS) which seeks to align various types of grant investments (program, general operating, research and development, etc.) with how the balance of the investment portfolio is managed (cash/cash equivalents, equities (private and public), and alternative investments).

Such an investment approach might draw upon tools from program-related investing, mission-related investing, social investing, sustainable investing, and so forth to complement mainstream investment products. However, the key point is that just as in traditional investing, the correct mix of both strategy and investment instruments will differ from investor to investor based upon the risk profile and investment goals of the investing institution. There is no single, correct way to invest – rather, there is simply the commitment to seek to maximize the total Blended Value of the portfolio in a manner most consistent with the institutional mission of the foundation, pension fund, or other investor.

These same principles hold true for individual investors seeking to maximize Blended Value. Accordingly, individuals seek to engage in an integrated wealth management strategy that integrates the life goals of the individual with the investment strategy of capital assets under management. The intent is not to maximize financial returns of the investment portfolio first and then secondarily seek to “do good” with some remaining portion allocated to personal philanthropy. Rather, the intent is to understand the total value trajectory of an individual’s life – all the components of value which are joined together as one – and create an investment approach which reflects the values and value creation elements of each individual investor’s life.

New Metrics and Blended/Multiple Returns

Over recent years, CSR reporting, Social Return on Investment analysis, and Triple Bottom Line accounting have each advanced a family of new metrics by which investors and managers have sought to assess extra-financial performance of capital and organizations. A Blended Value framework does not replace these various approaches to metrics and performance measurement but, rather, builds upon and seeks to integrate a set of indices in order to better reflect the full Blended Value generated by organizations through their allocation of capital investments.

For example, Triple Bottom Line accounting tracks a variety of individual metrics assessing economic, social, and environmental performance of organizations – yet if that analysis remains at the level of the Triple Bottom Line, the value created remains bifurcated and disaggregated. Accordingly, many CSR and Triple Bottom Line reports include separate sections addressing economic, social, and environmental performance. While extremely helpful in assessing the three individual components of value, such approaches foster an understanding of value creation as a set of trade-offs among limited value components and resources as opposed to a set of strategic decisions made with the intent of maximizing total performance at each level in the form of multiple returns and Blended Value.

With individual metrics in place, what remains is to reintegrate these metrics and multiple returns into a holistic framework of performance assessment – a blended metric or return. In the same way banking institutions often “tier” interest rates (combining a federal funds rate with a risk rate and an institutional capital costs rate to create a single blended interest rate which is then charged to the borrower), the multiple returns of capital investment, and three aspects of organizational performance must ultimately be viewed as a single blended return in order for analysts to truly assess the total value creation of any given investment or organization.

Leadership and Organizational Development

In previous decades nonprofit managers were trained as social work administrators and business managers received their MBAs. Today, corporate CEOs are being held accountable for social and environmental impacts and performance, and executives of NGOs need to be versed in capital structure finance. In response to these evolving shifts in required skills, business schools are offering courses in social entrepreneurship, and national conferences bringing together civic sector leaders include sessions on finance and capital markets. The reality is that increasingly managers in all types of organizations must develop a blend of skills that apply equally to the nonprofit and for-profit corporate environment. By building an integrated skill set and vision of leadership, these “mutant managers” are leading organizations that seek to capture their full Blended Value through acting as disruptive agents in global, regional, and local markets.

International Perspectives

Blended Value is a conceptual framework applicable in a variety of nations and international contexts. Whether one considers Bovespa’s Social Stock Exchange, Kiva’s lending platform, or any number of for-profit corporations, social enterprises, and microfinance institutions operating around the world, each of these and other initiatives reflect a movement away from an understanding of the world as being divided along the lines of traditional, bifurcated value propositions and organizations.

This movement across a host of for-profit and NGO entities, being supported with a range of capital investments seeking blended returns, reflects the reality that the value pursued by today’s managers and investors is increasingly blended and moving across global markets. Blended Value is a linking framework that allows one to place each of these enterprise and capital investment practices across a continuum of market activity that together maximizes the performance of actors seeking to create more than simply social or economic impact. Since there is no single, culturally determined manner in which Blended Value is created, the framework translates equally well to both developed and developing market contexts.

Future Directions

Over the past 20 years, since the introduction of the term Blended Value, various practitioners and academics have continued to explore and develop related concepts. These include Shared Value (Porter and Kramer 2011), Integrated Value (Visser and Kymal 2014), and Sustainable Value (Hart 2010). More recently, The Business Roundtable, consisting of nearly 200 CEOs of the world’s leading corporations, released a statement promoting the concept that the purpose of the firm is not to advance shareholder interest alone but rather shareholder interest together with the interests of various community, environmental, and employee stakeholder groups. Future research areas within the broad category of Blended Value will no doubt explore how the idea of an integrated, holistic, and blended value proposition is advanced by companies in markets and investors deploying capital in pursuit of optimizing all aspects of value throughout the world.



  1. Emerson, J. (2000). The nature of returns: A social capital markets inquiry into the elements of investment and the blended value proposition. Harvard Business School working paper, Social enterprise series no. 17.Google Scholar
  2. Emerson, J. (2000–2003). Blended value framework: Papers may be found at
  3. Emerson, J. (2002, January). A capital idea: Total foundation asset management and the unified investment strategy. Stanford Business School, Research paper no. 1786.Google Scholar
  4. Emerson, J. (2003a). The blended value proposition: Integrating social and financial returns. California Management Review, 45(4). Summer.Google Scholar
  5. Emerson, J. (2003b). Unified investment strategy. Where money meets mission: Breaking down the firewall between foundation investments and programming. Stanford Social Innovation Review, 1(2), Summer.Google Scholar
  6. Emerson, J., & Bonini, S. (2003). The blended value map: Tracking the intersects and opportunities of economic, environmental and social value creation. Hewlett Foundation, October.Google Scholar
  7. Emerson, J., Spitzer, J., & Mulhair, G. (2006). Blended value investing: Capital investment opportunities for social and environmental impact. World Economic Forum ref. paper no. 270306, March.Google Scholar
  8. Hart, S. (2010). Capitalism at the crossroads: Next generation business strategies for a post-crisis world. Upper Saddle River: Prentice Hall.Google Scholar
  9. Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62–77.Google Scholar
  10. Spitzer, J., Emerson, J., & Harold, J. (2007). Blended value investing: Innovations in real estate. Oxford University, Said Business School, ISBN: 978-1-905551-56-9, Fall.Google Scholar
  11. Visser, W., & Kymal, C. (2014). Creating integrated value: Beyond CSR and CSV to CIV. Kaleidoscope Futures paper series, no. 3.Google Scholar

Further Reading

  1. Bugg-Levine, A., & Emerson, J. (2011). Impact investing: Transforming how we make money while making a difference. San Francisco: Jossey Bass.Google Scholar
  2. Emerson, J. (Ed.). (2017). The Impact Assets handbook for investors: Generating social and environmental value through capital investing. London: Anthem.Google Scholar
  3. Emerson, J. (2019). The purpose of capital: Elements of impact, financial flows and natural being. San Francisco: Blended Value Press.Google Scholar
  4. Nicholls, A., Paton, R., & Emerson, J. (Eds.). (2015). Social finance. Oxford, UK: Oxford University Press.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Blended Value GroupGranbyUSA

Section editors and affiliations

  • Regina A. List
    • 1
  1. 1.HamburgGermany