Nonprofit?  For-profit?  Or both?  The Case Foundation asked Jed Emerson to comment on how the lines are blurring between businesses that return a profit and nonprofits that do social good.  In this essay, "A Value Vision for the 21st Century:  The Role of Foundations in Creating Sustainable Capitalism," he outlines:

• The history, evolution, and limitations of traditional capitalism;
• Examples of companies that embody "blended value";
• Barriers to sustainable capitalism; and
• The role of philanthropy in advancing blended value.

Following is a brief excerpt.  Read the full essay.

 

"The form of capitalism we have engaged in to date is based on the thinking and conceptual frameworks that gave birth to the Industrial Revolution. Today, well more than 150 years after that historic revolution, we still approach our understanding of economics, investing, and capital with a 19th century mindset -- we think of business as the place to create economic value and financial returns and charity as the place within which we 'do good' and contribute to our communities ...

 

"We have created our nation's entire framework of corporate law (with its artificial definition of 'nonprofits' and 'for-profits') and finance (with its limited focus on shareholder value and maximizing financial returns as the arbiter of what it means to create 'wealth') upon the belief that one can, in fact, disaggregate value -- indeed, that value may be bifurcated, with economics on one side and social or environmental value considerations on the other. ...

 

"Traditional global capitalism has, in its own crude way, created societies, both in the United States and abroad, that are financially wealthier than at any previous time in our world's history. Many who starved have been fed and those without means to support themselves employed. Our economic systems and policies of practice have assisted many of the world's nations to advance from a valley of significant poverty to mountains of prosperity from which we may view the lands still awaiting capitalism's many blessings. ...

 

"But perhaps this expansive, traditional view of capitalism, while initially one of shared vision and celebration, is actually coming into greater focus with the passage of each decade. And with this sharpening focus, it is hard to escape the growing sense that as we move through the early years of this new century, the industrial capitalism of the past is increasingly found to be wanting.  We have proven we can create great economic wealth for many of us, but could our approach to wealth creation itself be part of a shared problem for which we cannot buy a solution?...

 

"Long acknowledged as the 'venture capital' of the social sector, foundations have a solid history of investing in new ideas, leaders, and organizations. By funding new thinking and advocacy, foundations may play a central role in supporting the creation and execution of new ideas to help flesh out the details of our world's sustainable capitalism.

 

"What is required for us to capture this full, blended value is an approach to modern-day capitalism that moves beyond the initial barriers of short-term vision, narrow value perspective, limited asset assessment, and middling leadership, and takes us to the next stage of our own individual and our society's development."