15 Key Lessons From "Social Value Investing" by Howard Warren Buffett
Warren Buffett's grandson has figured out how to make money while doing social good
TL;DR: Together with his academic mentor William B. Eimicke, Howard W. Buffett—grandson of the legendary investor—has written a book that takes value investing a step further. By focusing on social value, he writes, one can realize financial gains while also achieving social goals. Cross-sector partnerships are an extremely important part of this. By partnering the public, private, and philanthropic sectors, and by ensuring transparency for all stakeholders, more gains for all can be achieved. Exemplified by Buffett’s and his colleagues’ experiences with digitizing Indian telehealth medicine and improving community development in Afghanistan together with the U.S. army, several case studies show how social value can be dramatically increased with the right approach. The 15 key lessons from this book are shared below.
In a world facing complex global challenges, the idea of investing has evolved far beyond financial returns. Social Value Investing, written by Howard W. Buffett and William B. Eimicke, takes the principles of value investing and applies them to cross-sector partnerships aimed at achieving social goals alongside financial gains. By uniting the public, private, and philanthropic sectors in collaboration, the book lays out a framework for creating long-term social impact through partnerships that prioritize the five P’s:
Process emphasizes structured collaboration, ensuring that diverse organizations align their efforts through formal agreements and coordinated strategies.
People highlights the importance of collaborative leadership and diverse teams, leveraging varied expertise to achieve shared goals.
Place focuses on grounding partnerships in local contexts, fostering trust, and engaging stakeholders as co-owners of outcomes.
Portfolio advocates for blending financial resources and innovative financing to diversify risk and maximize impact.
Performance underscores the necessity of measurable indicators and data sharing to track progress and redefine success.
Drawing from real-world examples such as digitizing telehealth services in India, revitalizing public spaces in New York, and fostering community-led development in Afghanistan, the authors present a compelling case for how thoughtful partnerships can transform societal outcomes. This article distills the book’s 15 key lessons into actionable insights, demonstrating how organizations of all kinds can work together to create measurable, meaningful change.
The 15 Key Lessons of Social Value Investing
Process: Building the Foundation
Formalize Partnership Structures
Cross-sector partnerships often bring together organizations with differing goals, cultures, and operating methods, which can lead to misalignment if not addressed early. Formalizing the partnership through clear agreements—like memorandums of understanding or project charters—helps set expectations and establish accountability.
For example, the Central Park Conservancy gradually formalized its partnership with New York City over two decades, creating a foundation of trust before committing to long-term contracts. Formal agreements reduce ambiguity, ensure consistency in decision-making, and provide a framework for resolving disputes. While flexibility may be necessary early on, formalization is key to sustaining a partnership’s longevity.Establish Mutual Operations
Partnerships thrive when all participants coordinate their efforts effectively. Establishing mutual operations involves synchronizing workflows, co-developing strategies, and fostering seamless communication among partners.
For instance, in the Digital India telemedicine initiative, the government, technology firms, and local entrepreneurs worked under a shared operational framework that enabled efficient program delivery. Similarly, IBM and the FDNY colocated teams during a fire safety initiative, fostering a collaborative environment where each partner could contribute expertise. Mutual operations not only enhance efficiency but also strengthen trust by ensuring all stakeholders feel valued and aligned.Develop a Comprehensive Strategy
Addressing complex social challenges requires a holistic, well-thought-out strategy that leverages the unique strengths of each partner. In Afghanistan, cross-sector partnerships invested significant time in creating a logic model to address gaps in economic development and social infrastructure.
This comprehensive approach allowed funders, local NGOs, and academic institutions to align resources and activities toward shared goals. A comprehensive strategy includes clear goals, a detailed roadmap, and a commitment to ongoing evaluation and adaptation. By taking the time to thoroughly plan, partnerships are better equipped to navigate challenges and achieve long-term success.
People: Empowering Leadership and Teams
Emphasize Collaborative Leadership
Collaborative leadership is essential for partnerships that bring together diverse organizations and individuals. It requires fostering cooperation rather than relying on rigid hierarchies or unilateral decision-making. For instance, the Friends of the High Line successfully mobilized community members, philanthropists, and city officials by leveraging a collaborative leadership approach. By ensuring all voices were heard and valued, the project transformed an abandoned railway into a celebrated urban park.
Conversely, the 2016 Rio Olympics highlighted the dangers of neglecting collaborative leadership, where a lack of community engagement led to corruption and widespread protests. Effective leaders inspire trust, empower teams, and navigate across organizational boundaries to align diverse interests toward common goals.Maintain Integrity and Respect
Cross-sector partnerships often involve organizations with vastly different cultures, resources, and objectives, making mutual respect and integrity essential. Respect fosters trust, which is the foundation of any successful collaboration. In Afghanistan, local entrepreneurs, NGOs, and international agencies overcame cultural and operational differences by engaging respectfully with one another, creating a partnership that delivered lasting benefits to communities.
By contrast, in the Rio Olympics case, dismissing local voices and critics undermined trust and led to public opposition. Treating all partners equitably and with respect ensures smoother collaboration and a shared sense of accountability.Build Diverse Teams
Diverse teams bring a wealth of perspectives and expertise, enabling partnerships to tackle complex challenges from multiple angles. The Comunitas initiative in Brazil exemplified this principle by drawing on leaders from finance, architecture, technology, and other sectors to rebuild public trust in local governments. This diversity allowed the partnership to address a wide range of urban challenges, from budget transparency to community services.
Building such teams requires intentionality, ensuring that leadership roles are distributed across sectors and that all participants feel empowered. Diverse teams not only enhance problem-solving but also increase the likelihood of innovative, inclusive, and sustainable solutions.
Place: Strengthening Local Roots
Recognize Interdependence
Successful place-based partnerships recognize that no single organization can achieve large-scale impact alone. Instead, partners must acknowledge and embrace their mutual reliance, ensuring that each contributes unique strengths to achieve shared goals. In Afghanistan, the success of agricultural initiatives depended on the coordinated efforts of philanthropic funders, local entrepreneurs, NGOs, academic institutions, and government agencies.
Each partner’s role—whether providing security, technical expertise, or community leadership—was essential to the overall success of the project. Recognizing interdependence fosters accountability and deepens trust, ensuring that all partners remain committed to the long-term objectives of the partnership.Broaden Public Participation
Engaging local communities as active participants is key to building trust and ensuring the sustainability of partnership initiatives. In Brazil, the Juntos program empowered citizens to shape municipal budgets and strategic planning, fostering a sense of co-ownership and accountability. Similarly, Digital India leveraged public participation to enhance access to telemedicine and government services, transforming rural communities.
By contrast, the Rio Olympics case demonstrated the pitfalls of insufficient public engagement, where a lack of transparency and consultation led to protests and delays. Public participation strengthens partnerships by aligning them with the priorities and needs of the communities they serve, reducing resistance and increasing impact.Codify Common Values
Partnerships that align around shared values are better equipped to navigate challenges and make decisions efficiently. Codifying these values provides a framework for cooperation and accountability, ensuring that all stakeholders operate from a common understanding.
In New York’s High Line project, shared values helped partners overcome bureaucratic hurdles and advance construction even before formal agreements were finalized. This alignment enabled the project to move forward with confidence and trust, ultimately creating a transformative urban space. By contrast, partnerships that lack shared values risk misalignment and inefficiency, as evidenced in the Rio Olympics case. Codifying common values ensures that all partners are working toward the same vision and goals.
Portfolio: Diversifying Resources
Make Substantial Commitments
Partnerships thrive when all parties demonstrate a genuine commitment through significant investments of time, resources, and expertise. In Afghanistan, the U.S. government made substantial initial investments in research, infrastructure, and security, while philanthropic partners financed irrigation systems and local entrepreneurs contributed on-the-ground knowledge. These collective commitments signaled the seriousness of the partnership and ensured alignment of priorities.
Similarly, Brazil’s Comunitas initiative relied on upfront investments from private, public, and philanthropic sectors to transform municipal services. Substantial commitments create momentum and a sense of shared responsibility, increasing the likelihood of sustained success.Agree on Complementary Contributions
Effective partnerships leverage the unique strengths of each partner, rather than compensating for weaknesses. In New York’s fire safety initiative, IBM provided advanced analytics and technical expertise, while the FDNY contributed operational knowledge and access to real-world scenarios. This complementary approach allowed both organizations to achieve results neither could have accomplished alone.
In Brazil, Comunitas blended philanthropic and private-sector funding with public infrastructure and human capital to achieve transformative urban improvements. By focusing on complementary contributions, partnerships ensure that resources are used efficiently and that all partners feel valued for their unique inputs.Use Innovative Financing
Creative financial tools enable partnerships to take on high-risk, high-reward initiatives that traditional funding models might avoid. Social impact bonds (SIBs), for instance, align financial returns with social outcomes, attracting private-sector investment for public good. In Brazil, Comunitas utilized blended financing models that combined public funding, philanthropic grants, and private investment to drive urban transformation.
Program-related investments (PRIs) incentivize collaboration by offsetting risks while encouraging innovative solutions. By diversifying funding streams and using flexible financial instruments, partnerships can access more resources and align financial incentives with long-term social goals.
Performance: Measuring Success
Determine Measurable Indicators
Clear and mutually agreed-upon metrics are essential for tracking progress and defining success. In New York City, Mayor Bloomberg’s administration prioritized performance-based governance by establishing measurable indicators for public safety, public health, and economic development. This data-driven approach allowed the city to reduce fire-related deaths to historic lows and improve recidivism rates among former inmates.
Metrics like these ensure that all partners are aligned on what success looks like and can adjust strategies as needed. Without such indicators, partnerships risk drifting away from their goals or failing to demonstrate their impact to stakeholders.Share Data and Information
Transparent data-sharing fosters trust and improves decision-making within partnerships. In the Digital India initiative, shared data platforms enabled seamless coordination between the government, technology providers, and local entrepreneurs, enhancing service delivery to rural communities. Similarly, New York City’s open-data initiatives provided public access to partnership performance metrics, ensuring accountability and encouraging innovation.
While some organizations may hesitate to share proprietary data, effective partnerships find ways to balance transparency with competitive concerns. Sharing information ensures that all partners are working with the same data, enabling better collaboration and more accurate performance assessments.Redefine Success
True success in cross-sector partnerships goes beyond financial returns to include long-term social impact. The Impact Rate of Return formula introduced in the book provides a framework for aligning diverse goals and evaluating projects holistically. It is related to the common Net Present Value formula, and instead introduces variables like Future Impact, Impact Efficiency, and an Impact Multiplier instead of using purely financial variables.
By redefining success to encompass social, environmental, and economic outcomes, partnerships can create more inclusive and sustainable solutions. For example, in New York City, performance measures were designed to improve not only operational efficiency but also quality of life for residents. Redefining success ensures that partnerships prioritize outcomes that matter most to the communities they serve and sets the stage for transformative, lasting impact.
The Bottom Line: Partnerships Create Value Beyond (But Not Without) Profit
Social Value Investing is more than a framework. It is a call to action for organizations across sectors to rethink how they collaborate to address society’s most pressing challenges. By formalizing structures, empowering people, grounding strategies in local contexts, diversifying resources, and prioritizing measurable performance, partnerships can unlock social value at an unprecedented scale.
From revitalizing urban spaces to transforming healthcare access, the case studies in this book illustrate the potential of partnerships to create lasting change. As Howard W. Buffett and William B. Eimicke emphasize, redefining success to include social impact is not just aspirational—it is essential for building a more equitable and sustainable future. These lessons provide a blueprint for leaders who are ready to step up and drive meaningful collaboration in the years to come.
The principles of Social Value Investing align closely with the work we do at Wangari Global, where the goal is to integrate sustainability into financial decision-making. The book’s emphasis on cross-sector collaboration offers valuable insights for forging partnerships with governments, corporations, and nonprofits to enhance ESG data integration and analysis. Although Wangari remains committed to focusing on monetary value creation for its customers, these lessons remind us that meaningful change is not achieved in isolation—it requires collective effort and shared purpose.
What we’re reading at Wangari
- has an interesting take on diversification. In his piece Concentration in investing he argues that if he just chooses the winners in the market, he does not need to rely on diversification quite as much. This does not and can not work out in the short term: If a large chunk of your portfolio suddenly breaks away because of a scandal or corporate misstep, you’re out of the game as an investor. If you aim for a time horizon of 10+ years, however, it is well possible to pull this off. You just need a bulletproof due diligence process.
Somewhat to the contrary of aforementioned
, portfolio manager argues that one must think in bets with associated probabilities, just like a poker player. Going beyond the black-and-white of a binary choice, his piece Non-Binary Investing argues that his portfolio might be more resilient to shocks if he made sure to make decisions as large as the probability of an event happening. Had he, for example, pulled out some 20 or 30 percent of his Russia-exposed stock at the beginning of the 2022 Ukraine invasion, he would have been better off than thinking, “This invasion makes no sense, hence I’ll keep my assets where they are.”- has an interesting tidbit of information on the European economy: It is de-industrializing. In Focused Investing Perspectives #33 he points out that this is concerning for plenty of Europe-focused investments. As a European, I say ouch—and will not contradict him because the data speaks for himself. Plus other read-worthy tidbits.