Moderator: Josh Spitzer One person’s social enterprise is another person’s social-purpose business venture; one person’s investment is another person’s grant. Who do we identify as a social entrepreneur? How do we know a sustainable practice when we see one? Is the revolution best characterized as an interdisciplinary movement or the birth of a new sector? And if it is a sector, what should it be called?

As our discussions of blended value develop, we can expect these and other questions about language to arise. In this forum, we hope to identify the most pressing concerns we have about language and begin discussing possible remedies for the confusion.

We’d like to open this discussion with the following questions:

Where in the blended value space do multiple terms obscure common issues? (e.g.: practitioners in different silos referring to the same thing by different names)

In the blended value space, where do people disagree on definitions?

How do nomenclature problems inhibit outsiders (e.g.: investment professionals) from engaging the space?

Tip: Post a message by typing in the blue box below. Receive email updates with a digest of the event by clicking on "subscribe." To tell a friend about this page, click "Tell a Friend" below.

The following document contains the complete perspective of the Blended Value Glossary. Click below to download .pdf document.

Attachment:

BVG Manifesto1.pdf

Jed Emerson - Mar 25, 2004 6:25 am (#1 Total: 18)
Senior Fellow, Generation Foundation (London)


Perhaps one of MY biggest questions is what constitutes an "investment." I know that folks involved in Socially Responsible Investing "hate it" when foundations refer to their grants as as "investment." Yet at the same time, they are capital allocations that generate value and a form of social returns...(and economic value gets created as well---but the profit isn't returned to the investor, so you don't really have financial returns in that sense...).

but anyway....what is an investment?

jed

Aron Thompson - Mar 25, 2004 9:08 am (#2 Total: 18)


Jed is so spot on to point out that many in the SRI field "hate it" when grants are categorized as investment. But they are, or should be, and are certainly the most important investment made by foundations as grantmaking institutions. An aspect of my own approach can be described with this principle:

Grantmaking is an investable asset class. The most important investments that a foundation makes are in the nonprofit organizations and social/enviro causes that are supported by way of grantmaking. The investments within the foundation’s financial portfolio only have value in so far as they are supportive of those grants, acting as a financial facilitator of them. It follows from this that grantmaking is not a debit. The money that is granted to nonprofit causes is not a “loss” to the foundation, and should not be thought of as such. Instead, it is an investment, in fact the most important investment that a foundation makes, and is the very reason for the foundation’s existence.

-- Aron Thompson, A.G.Edwards Seattle Financial Group

Oz - Mar 25, 2004 5:38 pm (#3 Total: 18)
http://www.call4tech.com/np


If the term investment is used maybe the invested worry about producing a return per se ? Is that investment means a tighter fiscal responsibility. Whereas " well it's grant and it's ours and when this runs out we will look for another ? but I think the creates FEAR is that the orgs don't know how to SHOW the dividend , orgs know how to PRODUCE the dividend but find it hard to show the results.. The SROI would be the easiest to produce and as long as the orgs focus on the mission and NOT on SROI they will do fine. As in quality control is by-product of a job well done . It's the complete process that produces a good product not just snapshots of the process here and there..

oz

Aron Thompson - Mar 26, 2004 10:27 am (#4 Total: 18)


It is interesting how much of this comes down to language, and also to the difference between older philanthropy and the newer styles. The newer styles have developed much of the new language. In my practice I find it fairly often true that the older, more conservative grantmakers want to be less creative in how they go about this, and tend to look at their grants very traditionally, more or less as they always have; that is, not as investments per se. Some newer groups, though, whether influenced by venture philanthropy models or something else, are more vigorous about measuring outcomes from their relationships and requiring regular results, about looking at their grantees/investees as portoflio holdings, and about engaging at deeper levels as opposed to offering merely money. But much of this is not communicated clearly on either side, funder or receiver, and much is lost in translation between the two. As the philosopher Ludwig Wittgenstein put it, "The limits of my language mean the limits of my world."

-- Aron Thompson, A.G.Edwards Seattle Financial Group

spitzer - Mar 26, 2004 11:59 am (#5 Total: 18)
Stanford Graduate School of Business


Already, this new discussion has raised three key issues that make nomenclature so problematic.

• Jed began by asking how do we define a term, and he suggested a “prescriptive” definition, the sort that we would find in a dictionary (investment = “capital allocations that generate value”). • Jed and Aron also reflect on “descriptive” definitions, indicating how are different people in different silos are using this term. • Oz and Aron raise some of the wide-ranging implications of how the terms are defined and used.

How, then, should we parsimoniously approach these language-based problems? Should we begin with how people use problematic terms and ultimately project prescriptive definitions? How useful are prescriptive definitions, anyway? When and how should we consider the far-reaching impacts of these decisions?

--Josh

Oz - Mar 26, 2004 12:49 pm (#6 Total: 18)
http://www.call4tech.com/np


"parsimoniously" first off maybe no big words Heh.. Maybe just a standard of both. My concern becomes getting this info back to masses. Maybe by keeping simple terminology some of the nomenclature issues can be solved. investment = money in the end that is all investment is and (hopefully) makes more of (money) Interest is interest ( earned income ) be it paid in cash,meals,beds, lives saved etc..

As each silo has different standards for both and data sets, the idea of herding the cats maybe be greater task with little reward. Looking at each silo and ending up with $200,000 created 200,000 meals or $300,000 (investment ) creates 1000 overnight stays.( interest) We should look at assisting silos at getting the best data set that suits their universe rather than a unilateral one shoe fits all..

I dont believe that the need is for a standard but the greater need is for a result. The sample I provided gives result with a very powerful statement. The cool part is it easy for anyone to understand. To generate this type of result from existing data sets the silos have is not problematic. I see it more of an education process .. Hey silos you have this data why not use and here is how.. A silo is only as good as the grain stored inside maybe we should be looking at the grain rather than the structure of the silo.. ( corny huh )

oz

Aron Thompson - Mar 26, 2004 1:13 pm (#7 Total: 18)


Investment is more than money, and to some degree always has been; so we need not be too mercenary here. There are various ways to tabulate returns, financial and nonfinancial, and the nonfinancial ways are becoming more numerous everyday. And while those of us who are SRI practioners make the case that the responsible/responsive aspects to doing business will ultimately result in higher financial returns (certainly no less), many of us also believe that those things have an absolute value, because they are good. And what is good is of permanent value. So investment means many things to many kind of investors, and needs to mean more than merely money. In my view.

Oz - Mar 26, 2004 10:10 pm (#8 Total: 18)
http://www.call4tech.com/np


But isnt it the RESULT of the investment make it more than an investment.. We can have a bad investment but the only bad money is no money (outside fraud) I invest 2 hours of my time in a NPO pro bono..This saves the NPO $150, because I understand the process and the inside of the silo I have value add of say 50 % as a return or premium if you will. As another network person would spend maybe 3 hours doing the same stuff as they would have to figure out what is where etc..

So I see it as NPO got a $150 investment that had ROI of 75.00 or the alternative would have been a cost of $225. So to me as the investor my real gain was helping the NPO but to the invested it was cost saving of $225..

Don't we have to look at the simple most common denominator then grow from there. Don't forget I am looking from a NPO point of view and how we can create a starting point to grow from and I have found that mentioning money seems to get everyone's attention very fast .. LOL But I believe you are talking more of companies and how social investment creates a better bottom line. ??

oz

.

Aron Thompson - Mar 26, 2004 11:19 pm (#9 Total: 18)


OZ: What I've discovered over the years is that there is some rather interesting alchemy between the financial and the nonfinancial. There are many nonfinancial reasons for investment; in general, the tendency of many people to base investment decisions on emotions as opposed to reason. Some other investors will put money at risk in companies that they just happen to like based on fuzzy feeling. These nonfinancial motivations have financial results, even if they're bad ones (losses instead of pluses). Similarly, financial decisions can create nonfinancial results, such as a company deciding to dump waste into a watershed to save money, which then pollutes fish, which are then consumed by people who get sick thereby. So the dividing line here is not a bright one.

On the nonprofit side, I can measure my pro bono work in dollar terms (I give away about half my business to nonprofit orgs), both in terms of what the orgs save by not having to pay, and what I surrender in not charging them. But the value in this is more than that; I know what the cost is and the savings are, but there is also the goodwill created and the social return that I receive from doing that sort of work. Et cetera. My social return inspires me to do it, and fuels me in keeping it up; without that, the financial benefit to the nonprofit would not exist, as I would be unmotivated.

But speaking specifically to investments made in capital/financial markets, I do not take a double or triple bottom line approach, as I find that divisive. Rather, I have what I call "Sustainable Total Return," or STR, which is the name for the investment portfolios we manage for philanthropic/foundation clients. So, instead of separating out the different kinds of return we might wish to keep track of and tabulate, we offer a more holistic treatment of what return itself is, and define it to mean the abundance of things that our money will impact and somehow influence as it's moved around. Stock price appreciation, interest and dividends are combined with social/enviro screening, grantmaking, probono work, shared profits, nonprofit engagement, community (re)investment -- and a partridge in a pear tree. If we were going to count them all out as bottom lines there would be many more than just two or three anyway. And as Einstein had it, not everything that counts can be counted, and not everything that can be counted counts.

-- Aron Thompson, A.G.Edwards Seattle Financial Group

Sohodojo Jim and Timlynn - Mar 29, 2004 7:06 pm (#10 Total: 18)
Sohodojo


Actually, that's BLA as in Business Language Analysis rather than the derisive "blah, blah, blah."

This post won't shed any light on the semantics of the Blended Value Glossary, but it will give you some ideas about how to further tackle the problem.

This forum thread and its associated manifesto gave me a real "stab from the past" feeling. (I am speaking here in the voice of Sohodojo Jim rather than our typical collaboratively authored comments by both me and Timlynn.) This discussion sounds almost exactly like the conversations I heard many times in client meetings when I was an Executive Consultant in the Object Technology Practice of IBM Global Services. I was a thought leader and designer/developer on an applied research team that created software frameworks for executable business models. The basic idea was to rapidly envision and prototype flexible business systems by directly programming abstract business models in an 'executable' form. For this, we used advanced object-oriented simulation technologies.

What we learned was this; if you want to get a disparate group of people to come face-to-face with the ambiguities and subtlties of their 'shared' language, write some software (for example, a simulation of the problem domain) that embodies this supposedly shared space. When we started working with clients' cross-silo executive teams to create such executable models, we soon ran into the brick wall of The Language Problem. Since this was IBM, we had vast human resources in the research labs and a 'failure is not an option' consulting culture that meant that we had to overcome this obstacle.

Before long, I was traveling to all client engagements with a business ontologist in tow. My buddy was Doug McDavid, who developed a consulting methodology he called Business Language Analysis. Doug would help clients figure out what they really meant when they talked about their businesses, their markets, and their industries. His analysis made my designing and programming do-able. I, in turn, brought these business models to life in software that could be experienced rather than the model just being talked about. In relatively short order, we'd get an "A-ha! That's it!" reaction from the client.

So, what might the BVG Team do to advance the movement? Consider hosting an applied, virtual workshop to do just such a language analysis and simulation development. (In this case, you'd be modeling the shared space of the BV 'industry' or shared community of interest.) In the early ninties, we had to do this kind of event face-to-face in grueling, extended work sessions. With today's on-line collaboration technologies and web-enabled simulation environments, this project could be done from the comfort of everyone's home office.

To learn more about Business Language Analysis, please see Doug's article 'Business language analysis for object-oriented information systems' (HTML abstract and full 23-page article in PDF format.)

Hope this information source and experience report is helpful. Is anybody interested in working together on such a project? The Skoll Foundation might be a potential funding sponsor, and Social Edge would be an ideal host for this applied research community project.

spitzer - Apr 1, 2004 9:36 pm (#11 Total: 18)
Stanford Graduate School of Business


Thanks, Sohodojo Jim, for sharing your ideas and experience with a similar problem.

The BVG team has developed a comparatively low-tech glossary-building process that has started with our compiling and assessing the other lexicons that have been produced by different blended-value silos. Eventually, we intend to gather extensive input from the Social Edge community to help us understand how those terms are being used. (I’m happy to talk more about our specific plans if folks are interested in such details.)

Thanks & best, Josh

spitzer - Apr 1, 2004 9:37 pm (#12 Total: 18)
Stanford Graduate School of Business


The BVG team could use some help in two key areas. Most importantly, we need to understand which terms cause the most trouble (and “investment” is a fantastic example). We’d also like to know if there are other helpful lexicons out there in the world of blended value. Any responses to the following two questions would be very helpful.

• Which terms (or concepts) cause the most confusion or controversy across the silos? • Have you found any existing lexicons intended to ameliorate some of that confusion?

--Josh

Sheila Bonini - Apr 19, 2004 4:44 pm (#13 Total: 18)
Hewlett Foundation


Hello - I'm Sheila Bonini, co-author of the Blended Value Map which is based on Jed Emerson's blended value proposition (see overview discussion or Q&A for more info). I am excited about the Glossary project and wanted to throw out a few terms that we came across in our various conversations and interviews that seemed to be problematic. The one Jed brought up is probably one of the most difficult - investment. I'd also add:

Social Enterprise Social Entrepreneur Socially Responsible Investing Corporate Social Responsibility Blended Value Double Bottom Line Triple Bottom Line Sustainable Development

These are just a few that we came across (see the definitions section in the Blended Value Map) and I'm sure that there are dozens more.

I'd like to ask the community what they think about these particular terms - give us your definitions. Also, I'd like to ask which terms ought to be added to this list?

Thanks!

Sheila

Love Humanity - Apr 24, 2004 8:12 am (#14 Total: 18)
Louise Williams


I am relatively new to the non-profit arena and have found that there are numerous terms that seem to confuse rather than to clarify. For example to a layman, what would Blended Value mean? When reading this term for the first time today, I think it means that a Non Government Organization (NGO) may have blended value by offering services at no cost and then possibly have a revenue model as well.

I think a Glossary is very important. But where does one add it? Coming from an advertising background I was taught that all general copy should be readable and understood by eighth grade level. But when new terms or "Buzz Words" are added, it is no longer eighth grade level because the word now has a different meaning.

If we put, for example, on our web site that we are a blended value organization, most people would not understand. So when is it wise or unwise to use industry specific words?

For me, I would rather write in clear and simple words so any person can understand. Why muddle the waters with a lot of sophisticated jargon when something can be said with words that are clearly understood by the masses.

However, I do agree that as change takes place, words will also have to change to reflect the new. For example, the term Social Entrepreneur. Previously I think this meant an individual who was stepping out and doing something for society not looking for a profit. It meant starting a non profit organization. Yet, this same term, Social Entrepreneur now appears to also mean an individual starting a company for profit that addresses a social need. Which is the correct term? Are they both correct?

I agree words are important. Especially in the electronic age of today. I think a Glossary is very important.

mitchellgordon - Sep 28, 2004 3:11 pm (#15 Total: 18)
Community Resources for Justice


I am intrigued by this thread and where it is going. I might point out there is an ongoing conversation at the Edna McConnell Clark Foundation regarding jargon that has crept into our lexicon as we work with foundations. That discussion is much more in the direction of Love Humanity's comments - keeping it simple..

That being said, I perhaps fall right in the cracks of this dialogue. I think a precise and uniform nomenclature is important to help us understand and communicate succinctly and clearly. At the same time I am concerned that it is precisely the use of this nomenclature that could keep certain opportunities out of the mix.

To try to be more clear... a nonprofit initiative may be very well suited to our support and interest, however, we may put them in an untenable position whereby unless they can express themselves in a language we value and understand we may not engage or even recognize their efforts.

So while we might agree on a uniform nomenclature, are we engaging in a process that ultimately requires others to conform to that language? And if so does that serve both our interests and theirs. Speaking from a purely Roger Fisher (Getting to Yes) point of view, we need to be sure that this process meets our interests well, other interests somewhat, and still those tangential interests acceptably. If our dialogue imposes a language on the process does it truly serve our interests (and others) – or does it reflect a position.

I also wonder whose perspective we are taking. Are we looking at our need to better understand and talk about what we do? Are we looking at those of us and others who are engaged in these activities and trying to help them (and us) to communicate about what we do? Are we focusing on how we talk about what we do and losing sight of the actual doing?

One might paraphrase George Carlin who was concerned that there were three words for things that burn or don't burn - inflammable, flammable and non flammable...when he said that either the thing flams or it doesn't.

I respect the efforts that the BVG group is undertaking, and I think it is important and necessary. I also think that perhaps we might find that at the end of the day simplicity wins out AND that the exercise and process of exploration was and will continue to be important.

As I said, I feel as if I sit between two camps and perhaps hope to gain greater insight by questioning the process and the purpose. I think that is a good investment.

terrypassarotti - Sep 28, 2004 10:03 pm (#16 Total: 18)
www.travelinged.org


So many of the concepts being talked about here (SRI, sustainability, social entrepreneurship, etc) are still being fine-tuned with a tremendous variety of nuance - e.g. TBL is out, Integrated Bottom Line is in; Sustainable Growth - is this growth without bounds or growth happeing within the bounds of social and environmental sustainability?

I think it's important that the words are out there, that their nebulous definitions are the subject of meaningful dialogue. Many people have acknowledged that diversity is something to be valued, not discouraged. Diversity of perspective leads to a more accurate sense of the ideas behind the words. In language, there are examples that people use many words to describe what is important to them. This vocabulary explosion around sustainability and organizations shows that interest is shifting, that attention and resources are being allocated to the very important concepts discussed in this thread. One person's social investment is another's grant. SRI yields SRoI - we hope.

The variety of definitions reflects where people are coming from - is the starting point as important as where we end up?

mitra - Sep 28, 2004 10:31 pm (#17 Total: 18)
Natural Innovation


I think its important to recognise that this is also an international space, both with english speaking countries - and places where english is a second or third language. I think its important to recognise that as the jargon changes you won't necessarily be communicating your ideas to people from other cultures.

Lets take one example of this - Australia started talking about TBL a LONG time ago, while most people in the US where still talking about DBL. I've never heard the term "Integrated Bottom Line" here, so if you use that term most of us won't understand you. But ... here at least in this part of Australia people are starting to talk about QBL, where the fourth line is either "spirit" or "ethics" depending on where you heard it form, i.e. how the business integrates HOW it does business.

Also ... when you talk about a Social Venture here in Australia it typically means what in the US is called a Social Entrepreneur. (i.e. non-profit + earned income) whereas in the US I'm more used to Social Venture being a business with a TBL.

- Mitra

terrypassarotti - Sep 28, 2004 11:10 pm (#18 Total: 18)
www.travelinged.org


I agree with you, Mitra. When the jargon obscures the meaning for people trying to get a handle on what sustainabilty (or any concept) is all about, it may be less useful.

And, I would suggest using something like concept mapping to show the evolution and interrelationships of terms popularized in different places and under different circumstances. This creates a richer picture than a list of words, definitions, and synonyms that we all agree upon for one moment in time and space.

I think people understand that in the same language, identical words used in different countries can have different meanings; idiomatic expressions are also confusing. These differences add to the richness (and sometimes hilarity) of a cultural experience as one comes to understand the differnences where none were originally apparent. "I'm embarassed" in English translating to "I'm pregnant" in Spanish - I had an obscure conversation around this phrase on a bus in Honduras once !

Continuing the conversations, asking for clarification, knowing one's audience and choosing language appropriately. I acknowledge the differences are sometimes subtle, am sometimes confused by them, but my curiosity takes me deeper - or not, depending on my level of interest.

I don't want to be divisive or exclusive. I want to understand and to build bridges where possible. Part of my life work is bridging the communication gaps between nonprofit and for-profit organizations as they seek to work together and learn from each other in a blended value sort of way.