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An estimated $12 trillion in market opportunities are embedded within the Sustainable Development Goals. Companies can unlock these opportunities with shared value, addressing social challenges in ways that improve a business' competitive positioning and profitability. But long-entrenched social and environmental problems often thwart shared value strategies. While executives know how to manage their corporate ecosystem of suppliers, distributors, and related businesses, those approaches do not work for the social ecosystem of governments, NGOs, and local communities. This guide outlines concrete and actionable steps for companies to build shared value ecosystems, based on insights from 12 companies across industries from around the world.

Today, investors are able to identify "good" companies and "profitable" companies but not companies doing the most good most profitably which is a missed opportunity for business, investors, and society.In Hybrid Metrics: Connecting Shared Value to Shareholder Value, we introduce a new approach that combines companies' social and environmental impact with standard measures of financial performance, making the connection between the two explicit. Hybrid metrics are still in the nascent stages, but the benefits and potential they hold are promising. We hope this report inspires companies, analysts, and investors to experiment with this concept and bring us closer to demonstrating the causal link between social/ environmental and financial performance — underscoring the importance of creating shared value.

Creating shared value involves value creation for business that simultaneously yields more profit and greater social impact, resulting in powerful transformations and opportunities for growth and innovation in both business and society. The concept of creating shared value focuses on the connections between societal and economic progress, and has the potential to unleash the next wave of global growth and competitive advantage. Published in Harvard Business Review, January/February 2011.

Despite spending vast amounts of money and helping to create the world's largest nonprofit sector, philanthropists have fallen far short of solving America's most pressing problems. What the nation needs is Catalytic Philanthropy -- a new approach that is already being practiced by some of the most innovative donors.

This recently published report provides the first comprehensive analysis of mission investing by U.S. foundations. The study, funded by The David and Lucile Packard Foundation, analyzes the mission investment activity of 92 U.S. foundations, which have made a combined total of $2.3 billion of mission investments. Mission investing is a more specific type of social investing, and represents the use of financial investments as tools to achieve a foundation's mission. Through interviews with foundations and extensive data collection, FSG assembled a rich picture of current and historical mission investment activity stretching back almost 40 years. The study found that the number of foundations engaged in mission investing has doubled in recent years, and the amount of funds committed annually has tripled. Although most mission investments are still low-interest loans, foundations are increasingly using equity and other investments that generate market-rate returns. Surprisingly, most of the growth has been driven by smaller foundations with assets under $200 million.

A growing number of foundations are offering low-interest loans, buying into green business ventures, and investing in other asset classes to advance their missions. Yet most mission investing remains haphazard and inconsequential. To bring about real change, foundations need to take a fundamentally different approach, making strategic mission investments that complement their grantmaking. Authors Mark Kramer and Sarah Cooch talk about strategic mission investing in the Fall 2007 issue of Stanford Social Innovation Review.

This report provides a guide to mission investment intermediaries, organizations that collect capital from multiple sources and reinvest it in people and enterprises, whether nonprofit or for-profit, that deliver both social impact and financial returns. A growing number of foundations and other funders are beginning to use such intermediaries versus making mission investments directly. This is due to a number of advantages that intermediaries can provide, such as ease of investment, reduced risk, lower transaction costs, specialized expertise, performance reporting, and an expanded deal flow. Yet research disclosed that many funders are unaware of the wide range of mission investment intermediaries that are available and of the advantages they can offer. The authors provide an overview of mission investment intermediaries and how foundations use them, the benefits and challenges of investing in intermediaries, and an analysis of available intermediaries that address economic development, housing and the environment.

This 2006 study, commissioned by the Shell Foundation, and prepared by FSG, sees strong growth and opportunity in the nascent field of proactive social investment (PSI). In a typical PSI, a socially-responsible corporation or a charitable foundation uses its capital to invest in new enterprises that can play a critical role in alleviating a societal problem. Although still a very small share of investments, the report estimates that PSIs total nearly US$15 billion, and are attracting increasing interest among foundations and corporations. The study, based on in-depth interviews with 36 pioneers in social investment from the US and Europe, validates the belief that PSIs can simultaneously deliver measurable social benefits and attractive rates of return.

Explores the various approaches to evaluation in social entrepreneurship, based on a review of relevant literature and interviews with funders, social entrepreneurs, and scholars in the field.

It is said that a good metaphor frees the mind . . . then imprisons it. The metaphor of business as a model for the nonprofit sector seems to be tracing this proverbial path. Over the past decade, many principles borrowed from corporate management, venture capital, entrepreneurship, and investment portfolios have been grafted onto the work of foundations and nonprofits. These new ideas have stimulated a considerable amount of innovation, bringing to the field venture philanthropy funds, social entrepreneurs, capacity building grants and the increasingly common goal of taking small nonprofit organizations to scale. It is true that certain basic principles of strategy, expertise and efficiency apply to the nonprofit sector, just as they do to every other kind of enterprise. But these broad principles need to be thought through carefully in the specialized context of the nonprofit sector if they are to be usefully applied. We may already be reaching the point where the business metaphor has imprisoned much new thinking in the social sector -- and the limitations are most apparent in this widespread ambition, shared by many funders and nonprofit leaders alike, of "going to scale" through rapid organizational growth.

Evaluation is one of the most confusing topics in philanthropy -- in part because it embraces multiple definitions that are often jumbled together. Evaluation often refers to at least three different kinds of measures: monitoring measures that typically focus on whether grant money is being expended for its intended purpose; process measures that offer data on interim measures of grantor and grantee processes believed to be indicative of future success; and impact measures that assess whether giving is achieving the desired level of social progress. Each of these measures can in turn be assessed at three different levels: the individual grant, the program, and the grantor as a whole. Combining these measures and levels produces a nine-part matrix that begins to tease out some of evaluation's varied meanings.

Foundations can boost impact and sharpen strategy by explicitly mapping clusters of grantees and explicitly managing the clusters.

Chronicle of Philanthropy, Mark Kramer argues that every nonprofit institution has three indispensable "customers:" the clients it serves, the donors who support it, and the volunteers or staff members who help get the work done. The failure to serve any one, while tolerable in the short run, will sooner or later undermine the organization's survival.

This paper articulates the case for a renewed role for business in global education through the lens of shared value. It is intended to help business leaders and their partners seize opportunities to create economic value while addressing unmet needs in education at scale. The concepts we describe apply across industries and to developed and emerging economies alike, although their implementation will naturally differ based on context

Mark Kramer and Dr. Atul Gawande discuss the untapped potential for community-based funders to transform the cost and quality of health care in the United States. Individually, these funders have the opportunity to make a profound and lasting impact on the health of their communities; together, they have the opportunity to create a national movement to achieve better outcomes at lower cost.

Large-scale social change requires broad cross-sector coordination, yet the social sector remains focused on the isolated intervention of individual organizations. Substantially greater progress could be made in alleviating many of our most serious and complex social problems if nonprofits, governments, businesses, and the public were brought together around a common agenda to create collective impact. Published in the Stanford Social Innovation Review, Winter 2011.

Large-scale social change requires broad cross-sector coordination, yet the social sector remains focused on the isolated intervention of individual organizations. Substantially greater progress could be made in alleviating many of our most serious and complex social problems if nonprofits, governments, businesses, and the public were brought together around a common agenda to create collective impact. Published in the Stanford Social Innovation Review, Winter 2011.

With funding from The Surdna Foundation, FSG has developed this report to help foundations identify how various mission investing instruments and opportunities can help them create greater impact. Guided by an expert Advisory Board and based on interviews with more than 50 practitioners from the field, the report provides a framework for foundations to think about how mission investments can create the greatest impact when combined with grants in an integrated program portfolio, with a specific focus on climate change.

Trustee Evaluation ToolkitTrustees care deeply about impact. Understanding results is part of their fiduciary duty. As foundations strive to improve performance, advance accountability and share knowledge, their desire for evaluation -- reliable data on organizational effectiveness -- grows. Based on discussions with trustees, we've heard that current evaluation approaches don't always generate useful information. In too many cases, foundation evaluation practices don't align with trustee needs. Trustees across the United States believe there are ways to improve how we determine the effectiveness of social investments. FSG Social Impact Advisors, with funding from the James Irvine Foundation, interviewed dozens of foundation trustees, CEOs and evaluation experts to uncover critical issues and exciting ideas related to evaluation. This "toolkit" shares highlights from these interviews, and explores innovative new approaches.

A surprising new breakthrough is emerging in the social sector: A handful of innovative organizations have developed web-based systems for reporting the performance, measuring the outcomes, and coordinating the efforts of hundreds or even thousands of social enterprises within a field. These nascent efforts carry implications well beyond performance measurement, foreshadowing the possibility of profound changes in the vision and effectiveness of the entire nonprofit sector. This paper, based on six months of interviews and research by FSG Social Impact Advisors, examines twenty efforts to develop shared approaches to performance, outcome, or impact measurement across multiple organizations. The accompanying appendices include a short description of each system and four more in-depth case studies.

Discusses in detail the legal aspects of mission-related investing, including federal and state fiduciary laws, foundations' fiduciary responsibility, and emerging practices, and makes recommendations. Includes examples of investments and case studies.

U.S foundations have considerable freedom to invest their assets in ways that further their missions, even at greater risk or lower financial return. The legal framework that governs the investment of foundation assets is both complex and ambiguous, however, with the result that many foundation leaders and investment advisors are unclear about what is legally permissible. Anne Stetson and Mark Kramer of FSG have prepared two reports, in consultation with nationally-recognized legal experts and senior foundation officers, analyzing the federal tax and state fiduciary laws as they apply to US foundations. In addition to legal analysis, the reports provide practical recommendations as to how foundations can best navigate these laws in making mission-related or program-related investments. A Brief Guide to the Law of Mission Investing for U.S. Foundations is a short 18 page booklet, suitable for foundation staff and boards, as well as their advisors, explaining in non-technical language the factors foundations must consider in making mission investments.

The field of philanthropy is undergoing a fundamental transition toward more performance-centered and forward-looking evaluation approaches that provide foundations and their grantees with timely information and actionable insights. Our report highlights emerging evaluation practices and identifies major trends in the field related to increasing effectiveness for both foundations and grantees. Based on nearly 100 interviews with foundation leaders and evaluators, this report represents the first step in a multi-year action initiative to develop pragmatic evaluation approaches that enable foundations, large or small, to achieve greater social impact.

This study is intended to provide a preliminary exploration of the rationale and potential for foundation-corporation collaborations, together with a framework for constructing them, and a few abbreviated case-studies that suggest their power. The objective is to highlight some of the issues that may arise, and stimulate further research that may lead to the formation of new and potent partnerships for social progress.