Social Capitalists: Advisory Board

Social Capitalists

Jed Emerson

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If one discounts the brief stint he had as a busboy at Denny's in high school, Jed Emerson's entire career has been spent working for the nonprofit sector. But his perpetual dissatisfaction with the status quo in that field has led him to be one of its harshest critics -- and one of its leading innovators.

At 26, Emerson founded the Larkin Street Youth Center, a program for homeless youth in San Francisco. The center was a successful program, but after four years, Emerson found himself frustrated by the agency's inability to make a systemic difference. "I felt like I'd become a part of the poverty industry," he says. He noted that the way that businesses measured success was not how he saw his compatriots in the nonprofit sector measuring it. In Emerson's eyes, most nonprofit organizations at that time were defining success relative to "political contacts, media coverage, and an ability to schmooze."

He left the San Francisco organization and, in 1989, started working for a foundation set up by investment banker George Roberts. With Roberts's backing, he had the opportunity to explore some ideas about a new approach to measuring success. In particular, he examined whether it would be possible to take business models and use them to advance social goals. That year, Emerson helped launch the Roberts Enterprise Development Fund (REDF), which gives loans and grants to nonprofit organizations that employed low-income and formerly homeless people in market-based ventures. For 10 years, he served as the fund's executive director and was its president in 2000. At REDF, Emerson was able to forge a two-fold definition of success for the fund's portfolio organizations: First, they had to be financially sound and run in the black. But Emerson also began to work on methods of quantifying the social contribution these organizations made. Measuring those results was critical to both demonstrating the value of nonprofit work in the world and also to setting goals for improvement, Emerson says.

Eventually, Emerson came to believe that financial and social performance -- for nonprofits and for-profits -- should be melded together into one number, a concept he calls the "blended value" proposition. His next task? Working with others in the field of social entrepreneurship to create a way to measure blended value, a process Emerson admits will be neither easy nor fast. "We need to create new metrics," he says. "We can't use the old ones. And yes, it's going to take a 20- to 30-year process of debate and experimentation for them to evolve."

Since leaving REDF, Emerson has been a senior fellow with the William and Flora Hewlett Foundation and the David and Lucile Packard Foundation. He also lectures at Stanford University's Graduate School of Business. From 2000 to 2001, he served as the Bloomberg Senior Research Fellow in Philanthropy at Harvard Business School.

Emerson has twice been selected by The Nonprofit Times as one of its "50 Most Influential People in the Nonprofit Sector."


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