Value = Profit + Public Good

When people talk about how well a company is doing or try to value a company, it is common practice to refer to its stock price or its most recent quarterly earning statements. I would contend that profit is a narrow way to value a company. Profit tells us very little about intangibles like what the a company's impact on the environment is or whether a company is treating its workforce fairly. I would argue that a much better way to value an organization, whether it be for-profit or not-for-profit, would be to look at both the income it is generating and the public good that it is creating. Jed Emerson, a senior Fellow at the Generation Foundation, has made a very similar argument in his essays about blended value. To learn more about his theory of blended values visit: www.blendedvalue.org

In a utopian world, public good be quantified and measured, so that the true value of both for-profit and not-for-profit organizations could be known. Conceivably, in this world, companies that produce negative public good, could fund the work of social sector organizations that generate little economic profit, but create a lot of public good, through a system that is much like the one we see for carbon trading today.