~Acumen Fund~

(In our last class (section-B) I had a presentation on a non-profit organization known as "Acumen Fund". Below is the information concerning this organization? For more details or queries visit their website: www.acumenfund.org)

Acumen fund is a non-profit global venture fund targeting the four billion people living on less than $4 a day.

There is a growing gap between rich and poor. Something should be done to extend the benefits of the global economy to the majority of the world’s population that lives on less than $4 dollars a day.

Acumen fund uses entrepreneurial approaches to solve the problems of global poverty. They seek to prove that small amounts of philanthropic capital, combined with large doses of business acumen, can build thriving enterprises that serve vast numbers of the poor. Their investments focus on delivering affordable critical goods and services like health, water, society and energy – through innovative, market-oriented approaches.

Funding comes from wealthy individuals as well as institutions like the Bill and Melinda gates foundation and google.org, the charitable arm of Google.

Acumen fund is currently dealing in five countries and these are Kenya, Tanzania, South Africa, Pakistan and India.

As mentioned above, Acumen fund is using market-oriented approach so a question may rise in your mind that what does the market do, that traditional philanthropy cannot? Here is the answer: The market is the best listening device that we have. If I offer you a gift, you’re going to tell me that you like it. If I offer you something you have to pay for, you may tell me you can’t afford to pay -- but you may tell me you really want it and I have to figure out a way to get it to you for free. Not all my customers are really going to need it for free. Some of the people are going to have to pay some of the cost. Market-driven doesn’t mean that capitalism will change the world. It’s using the best of markets to deliver basic goods: health care, water, housing, and alternative energy to people who live at the bottom of the pyramid.

Another question that may come into your mind is how do they decide where to invest? These examples to the answer of this question will make many things clear that how the way they actually are working???

One example is Water Health International. The conversation in India and at the UN was that water is a human right and everyone should have it absolutely for free. But 450 million people in India don’t have clean water so let’s experiment. They put $600,000 of equity into a new startup company that was trying to transfer new technology into India. They supported it with knowledge and talent: knowledge around helping with business planning and sent in an architect to help them with the design of the actual plant and connections. They also saw that for this to work, again, it needs to scale. They worked with ICICI (India’s second-largest) bank, putting up a guarantee so the bank could lend for the first time into rural areas. The company has over a quarter million customers now and they are sustainable in over 100 villages.

Another example would be East Africa, which is completely different. You not only need manufacturing, you need jobs. Sumitomo had developed a technology to make bed nets in Vietnam and China that last for five years and don’t need to be dipped in insecticide. Acumen fund made a $350,000 loan to a local entrepreneur in Tanzania (A to Z Textile Mills); again we provided some management assistance. That company now employs 7,000 people.

In all these cases Acumen fund is the enabler. They find the right entrepreneur. They’re extraordinary individuals and then they grow these amazing businesses. It proved itself to the point that Sumitomo came in as a partner. The company has since raised $12 million.

Now you may find interesting to know a bit about organizations history.
Acumen fund was incorporated on 1st April 2001 with seed capital from two foundations and three individual philanthropists. The founder and C.E.O is Ms. Jacqueline Novogratz, a University of Virginia grad with a Stanford MBA.

Organization’s goal: Invest $100 million and make an impact on the lives of 50 million people by 2011.

Acumen fund’s investment in Pakistan is supporting innovative business models that provide affordable legal housing and finance for thousands. 74% of Pakistan’s population still lives on less than $2 a day. With a population of 160 million, Pakistan’s challenge is how to address its citizens basic needs and services.
(source: www.acumenfund.org)