In a 50-minute interview, Commons contributor Paul Lamb gets up close and personal with Jed Emerson, rock star of a new breed of innovators in the fields of investment and philanthropy. While going into eye-glazing detail about such things as blended value, social returns on investment, and econometric externalities, Paul noses into Jed’s personal life -- discovering, for instance, that while Jed may have been dropped on his head as a kid, that’s not the main reason why he’s dedicated his life to social work.
His grandfather invented dial-a-prayer in the 1950s (take that youtube!). His father, a Presbyterian minister, was the General Manager of the Community Service Society of New York, and helped them transition from case work to community work. His mother is a social worker, his brother was involved in politics and is actively involved with nonprofits in LA, and his sister is a teacher, working with special needs kids.
His parents encouraged him to be out and engaged in the community, and by the time he was twelve, he was a peer tutor and worked with mentally disabled kids. Granted, he was partly motivated by a desire to get out of the house and do things on his own, but he got this bug to be “part of a community of actors who are trying to create a better world. And once you get that bug,” he said, “it’s hard to shake.”
Jed tells Paul about other key influences: Min Yasui who taught him to be clear about his values and beliefs, and to fight for them in a way that’s affirming and positive for the broader community; and George Roberts, who gave him the resources to explore the areas of social entrepreneurship and venture philanthropy, at a time when the major players thought that the idea of integrating social and business practice was ridiculous.
And in the best tradition of none-of-your-business journalism, Paul gets Jed to talk about favorite books, music, and hobbies (playing guitar, and rescuing stranded skiers). “The best thing is nobody cares about my academic work or my investing practices - it’s simply can you tie a knot, and get somebody in a litter and get them out of there.”
"This whole approach to philanthropy is absurd"
Getting into his work for a few minutes, Paul asks Jed about the LA Times expose into the investing practices of the Gates Foundation, and how they may be causing the problems that the foundation hopes to fix. “What’s striking is that you can do that analysis on virtually every foundation in the United States and reach the same conclusion.” What we’re really working with is a business model that says we’re going to take 5% of our assets to pursue 100% of our mission, and 95% of our assets are going to be invested in some of the very companies that often create the problems that we’re trying to address with our 5%.
This whole approach to philanthropy is absurd, Jed said. We should question this type of corporate structure that doesn’t pay taxes and receives very positive tax considerations under our current code. What we should ask is “are there ways that you can manage the 95% to support your mission?” That’s really the challenge.
Jed advises Bill & Melinda to at least begin to more actively exercise their rights as shareholders to engage management in a dialogue into whether or not corporate practices are producing the maximum possible value. They could also learn some lessons from companies that in the past five to ten years have figured out how to manage assets in a way that gives greater consideration to social and environmental factors, and still maximizes financial returns. And they should question the idea that the sole purpose of philanthropic dollars is to make grants.
Jed also has some advice for those of us who don’t own the planet, but want to do good anyway: (1) When in doubt, go higher – we all sometimes doubt what it is we’re doing. We need to keep our heads up and our eyes focused on the broader vision and value that we’re trying to create, and always strive to achieve the greatness that is within each of us. (2) Do a Gandhi – always expect the most of “the other” – in our personal lives and professional work, we should always expect everyone to perform at a very high level, professionally and ethically. If they choose to go beneath that, that’s something they have to deal with.
- Leo Romero
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Articles on Jed
- In Search of Value, Eric Larson, Lewis & Clark College
- CNN Money, A new world order: Jed Emerson's capitalist utopia. Can social value reward investors, companies?
- Fastcompany, 60 seconds with Jed Emerson
- Fastcompany, 25 entrepreneurs who are changing the world
- HBS Working Knowledge, Enterprising Nonprofits: A Toolkit for Social Entrepreneurs - Why Running a Nonprofit is the Hardest Job in Business
- HBS Working Knowledge, Social Capital Markets: Creating Value in the Nonprofit World
- Alliance, Interview with Jed Emerson, Foundations: essential and missing in action
- SustainAbility bio & links
- xiginet bio & links
- Pacific Community Ventures, Board
Articles by Jed
- Social Innovation Conversations podcast, Jed Emerson, Value Creation
- Search results within www.redf.org
- Blended Value
- Publications & Presentations on BlendedValue
- Value Magazine
- Generation Investment Management
- The role of foundations in creating sustainable capitalism
- Social Edge bio & posts
- The Prince's Accounting for Sustainability Project The Prince of Wales has established his Accounting for Sustainability Project to develop systems to help organisations to measure more effectively the environmental and social costs of their actions.
- The Enhanced Analytics Initiative EAI was established in October 2004 by a group of institutional investors (including asset managers and pension funds) who believe that members and clients are best served when investors take a more rounded assessment of corporate performance, and that one of the key obstacles to this is the quality and focus of current sell-side research.
- Fleishman interviewed by Boris Joel Fleishman, author of "The Foundation: A Great American Secret - How Private Wealth is Changing the World," interviewed by Elizabeth Boris, director of the Urban Institute’s Center on Nonprofits and Philanthropy.