Acumen (organization)
Acumen (formerly known as Acumen Fund) is a nonprofit impact investment fund focused on investing in social enterprises that serve low-income individuals in United States. It aims to demonstrate that small amounts of philanthropic capital, combined with business acumen can result in thriving enterprises that serve vast numbers of the poor. Over the years, Acumen has invested $115 million in 113 companies and has had a successful track record in sourcing and executing investment opportunities in the clean energy, health care and agriculture sectors. History. Acumen was founded in 2001 by Jacqueline Novogratz who gave up  her job in Investment Banking to work in International Development. The idea of Acumen reportedly originated from one of Novogratz's trip to Central Africa, back when she was still in the banking industry with Chase Bank. Chase Manhattan Bank), where she noticed that banks did not lend to poor people. Soon after, she quit her job, relocated to Rwanda and opened Duterimbere, the first micro-finance bank in the country. It started as a money-lending venture where it provided women with small loans to promote women's entrepreneurship at the grass-roots level with an aim to contribute  to the income of low-income working women. Novogratz's biggest challenge was convincing women that it was an authentic venture alongside explaining the ways in which it could increase their income and pull them out of poverty. Her cause was strengthened when she got 3 women parliamentarians to back her project and it grew to 2000 members from five provinces in 11 districts across Rwanda. After Duterimbere, Novogratz wanted to do something bigger. At the apex of her imagination was an entity that would provide social enterprises with the tools to empower the working poor. In 2001, with help  of Seed Capital from the Rockefeller Foundation, Cisco Systems Foundations and 3 individual philanthropists, she founded Acumen. Acumen uses a business mechanism to fight poverty, investing in for-profit businesses that treat the poor as customers. Investment model. Acumen's investment model is to invest as equity or debt in enterprises, either for-profit or nonprofit organizations, that are serving Bottom of Pyramid Markets. In choosing these organizations, Acumen focuses on companies working on one or more of the five portfolio areas namely water, healthcare, housing, energy and agriculture. It invests not only in the form of financial capital but  also its human and knowledge capital through assistance in business areas including business strategy, planning and performance management. Investments. WaterHealth International: In 2004, Acumen invested in WaterHealth International, a for-profit organization that supplies clean water to the poor population in rural India, Ghana and the Philippines. Acumen partners with the International Finance Corporation of the World Bank and Dow Chemical Venture Fund to supply, people in rural areas of third world countries, clean supply of water alongside earning a substantial gross margin that keeps these hybrid enterprises thriving. PEG Africa: In 2017, Acumen invested in PEG Africa, the leading  pay-as-you-go solar home system distribution company in West Africa. PEG Africa launched in Ghana in 2015, and today serves customers across Ghana, Côte d'Ivoire and Senegal, bringing affordable solar products to those who do not have access to the electrical grid. Social Return on Investment. When investing in businesses, Acumen measures success in the number of lives reached in bottom of the pyramid markets. For them, success is correlated with the social change that occurs in people's lives. For example, when looking to invest in a company that makes and distributes anti-malarial bed nets, Acumen  uses numbers to measure the social impact of this company. This means that the more number of anti-malarial bed nets manufactured and distributed, the more impact the company made. If a company builds toilets and shower facilities in urban slums and business districts, the success of this is measured by the number of times the toilet and shower facilities are used. Acumen measures the immediate output and considers it when looking for businesses to invest in. It doesn't go further in investigating whether these social changes is contributing to decrease in malaria or improvement in health and environment . Its former CEO, Brian Trelstad argues that the latter approach is complicated, expensive and impractical for emerging companies. Instead, Acumen measures between output and impact i.e. distribution of bed nets to reduction of malaria. Grants. Bill and Melinda Gates Foundation: Cisco, Sapling Foundation Partnerships. The Clinton Foundation: The challenges in this initiative involve difficulty in accessing and adopting beneficial agricultural innovations as well as the company's challenge in providing it and still remaining profitable. This partnership helps in overcoming these challenges by developing repeatable models to scale the adoption of agricultural innovations. Other projects. LifeSpring Hospitals: LifeSpring hospitals is  a joint venture of Acumen and Hindustan Latex Limited to provide women with a cheaper and accessible way of childbirth. It started in 2005 when Anant Kumar, CEO of HLL (now known as HLL Lifecare) travelled to hospitals to talk to women about family planning practices and contraceptive use. Kumar found out that most women were unsatisfied with the level of care at public hospitals, some were so frustrated that they would take out loans to finance visits to private facilities. Kumar took the idea of opening a high-quality maternal care institution to low-income families in the sprawling  Hyderabad urban slums. The concept involved provision of high quality pre and post natal health care services priced at 50-70% the price of private clinics. The concept was welcomed among the poor population and it was expanded to 9 hospitals in low-income areas by 2009. Its narrow specialization in maternal health care has been instrumental in lowering costs and increasing productivity in its locations. By limiting capital expenditures such as renting hospital buildings on multi year leases, outsourcing pharmacy and laboratory services and reducing the amount of machinery to only those necessary in performing a safe normal delivery , LifeSpring hospitals has brought the cost down to make it accessible to the poor population. Through its process-driven model, LifeSpring has filled a void in the Indian healthcare landscape. Its developmental goals are to reduce maternal and child mortality while achieving financial sustainability. It ensures that more babies are born with qualified physicians rather than at home in high-risk situations. Additional income generated apart from deliveries is attributed to family planning services, consultation fees and rent from outsourced laboratory and pharmacy. Raising money for expansion. In December 2013, LifeSpring Hospitals decided to raise $3.2 million to fund  its expansion plan and to set up another maternity home.