The before-and-after pictures of Naran's fields are stunning. Before, the picture is of parched, cracked earth in the dessert. Just four months after, Naran is dwarfed by radiant, seven-foot tall sunflowers that extend in a sea of yellow heads to the horizon. This harvest alone paid back the cost of the drip system and all the inputs (seeds, pesticides and fertilizer), and Naran will be able to plant two more crops this year, with the expectation of higher profits.
As exciting as Naran's example is, scaling up MicroDrip is not going to be easy. Not all the farmers have been as successful as Naran – some because of bad weather; some because their sunflowers were hit with "head rot" that can strike in a matter of hours and destroy part or all of the crop; and some because they didn't take the time and effort Naran did.
- What It Means to be Patient: Drip Irrigation in Pakistan's Thar Desert
Using Patient Capital To Build Transformative Businesses
Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. We 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. Our investments focus on delivering affordable, critical goods and services - like health, water, housing and energy - through innovative, market-oriented approaches.
The Challenge: Tremendous wealth is being created in the world today thanks to globalization and the power of technology and markets. Yet there is a growing gap between rich and poor.
Why Charity Alone isn’t the Answer: Poor people seek dignity, not dependence. Traditional charity often meets immediate needs but too often fails to enable people to solve their own problems over the long term. Market-based approaches have the potential to grow when charitable dollars run out, and they must be a part of the solution to the big problem of poverty.
Why the Marketplace Alone isn’t the Answer: Very low-income people are too often invisible to businesses and society. Businesses see no significant market opportunity and governments view low-income areas as having insufficient tax revenues to pay for basic services like clean water, healthcare, housing and energy.
Changing the Development Paradigm: We believe that pioneering entrepreneurs will ultimately find the solutions to poverty. The entrepreneurs Acumen Fund supports are focused on offering critical services - water, health, housing, and energy - at affordable prices to people earning less than four dollars a day.
The key is patient capital. We use philanthropic capital to make disciplined investments - loans or equity, not grants - that yield both financial and social returns. Any financial returns we receive are recycled into new investments. In the past six years, we have refined the Acumen Fund investment model, built a world-class global team with offices in four countries, and learned what does and does not work in growing businesses that serve low-income people.
- Acumen Fund: About us
Metrics Matter
For Acumen Fund, metrics are a management tool that allow us to help the enterprises in our portfolio to improve their internal operations - and for Acumen Fund to know where to allocate support and how to improve its own efficiency. Metrics must be understandable, inexpensive and, most importantly, useful. We have defined a set of key metrics we use to assess our investments - for each investment, for our overall portfolio, and for the organization - that signal to our community where and how we can have the greatest impact.
At the level of our individual investments, we assess our investments along four criteria:
Financial Sustainability: Are the enterprises we fund in good financial health? Can they return our capital?
Social Impact: How many lives have been impacted by our investments, and what is the nature of that impact (e.g., the number of farmers using drip irrigation systems and the degree to which their productivity has increased)?. We opportunistically partner with world-class research organizations to conduct in-depth research to better understand the social impact of select investments.
Scale: What is the progress toward the goal of scaling the organization, and how is that scale helping address the problem (e.g., the number of people who live in rural India that have access to affordable, clean drinking water)?
Cost Effectiveness: Before we make an investment, we seek to understand whether there is another group in the charitable marketplace that can deliver the same product or service more cost-effectively.
We expect quarterly metrics from each enterprise on the corresponding financial operational and social impact metrics. We then complete our evaluation framework with a Capability Assessment by our portfolio team that gives a broader qualitative snapshot of the health of the enterprise’s management team, its organizational systems, its continuing fit with Acumen Fund’s mission and its potential for financial sustainability and scale.
- Acumen Fund: Investment Performance
