Tag: Acumen Fund

I’m hiring

~ Sasha ~ 34 Comments

I’m looking for someone great to join my team at Acumen Fund.   I’m looking for a great marketer — a storyteller, a tribe-builder, someone who knows how to connect with people in a real and genuine way and help them to be part of something big…and who at the same time is ready to roll up their sleeves with data and numbers and analytics and web 2.0 tools.

We’re living through an amazing, challenging time.  We have a financial meltdown on one hand, and a new U.S. President brought to power on a wave of change from below on the other.  This is a tremendous opportunity.  The time is ripe to create a step change in terms of awareness, excitement, and membership in Acumen Fund’s community of supporters and advocates – from tens of thousands to hundreds of thousands…and someday millions of people who believe that markets and entrepreneurship have a central role to play in the global fight on poverty.

I need someone to help us make this happen. You might be a great blogger or an old-school marketer with lots of new tricks up your sleeves.  But either way you bring off-the-charts passion, energy, commitment, and humility to this roll.

You can read the full job description on this Squidoo lens. The boiled-down version is: you’re probably either a super-duper marketer who knows how to use online tools, or you’re world-class with online tools and also have got some great marketing ideas. If you’re neither of these things, this job probably isn’t for you.

Please spread the word to people who might be interested.  I’m excited to see who will apply for this role.


Change minds, change lives

~ Sasha ~ 3 Comments

It’s daunting to see the world’s problems.  It is hard to know what you can do to make a change.

Here’s a great opportunity.  A chance to spread the word about a book full of fresh ideas and an authentic story.

by Jacqueline Novogratz
The Blue Sweater by Jacqueline Novogratz

Seth Godin and I are asking a few select bloggers spread the word about The Blue Sweater, a new book coming out on March 3 by Jacqueline Novogratz, CEO of Acumen Fund.  We’re asking you to read and review the book, and then give it away to a friend or blog reader. Seth has bought the books and we are giving a small number away to people who can spread the word the farthest.

If you’re an interested blogger, go to this page and describe your platform.  Let us know who you are and who you reach with your blog – we only have a few books to share so cannot give copies to everyone.

If you’re a blog reader (of course you are), tell your blogging friends about this and share it with your social networks.

And if you’re interested in pre-ordering the book, you can get it at Amazon or Barnes and Noble.

I promise that people will be happy to hear from you about this, and that by spreading the word you are spreading a powerful, new idea.

Change minds, change lives.

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Are we dropping the bag in the lost and found?

~ Sasha ~ 2 Comments

Sean Stannard-Stockton, author of the wonderful Tactical Philanthropy blog, made a characteristically insightful comment on my “Create your own reality” post.   It is in a similar vein as Nathaniel Whittemore’s comment here, so I feel like I haven’t been nearly clear enough in some recent posts.  So here goes.

Sean writes:

Sasha, it seems to me that you had a ton of tools at your disposal to find the mysterious Australian. What if instead your best bet was to just drop the bag off at a lost and found. That wouldn’t have made you feel as good because it was not just the act of trying to help that made you feel good, it was your success in helping.

That desire for success is what is driving “increasing donor demands for objective data.” Philanthropy isn’t just about trying to help, it is about actually helping.

15 years ago, you didn’t have all the technology tools you mentioned in the post available to help track the person down. That’s where we are today in philanthropy. We want to help, but we often don’t know how to do it effectively.

The passion behind philanthropy is not at odds with the technical, data driven discussions. The passion is driving those discussions.

Yes, yes and yes.  I totally agree.  So what am I getting at?

1. Yes, the passion is behind the discussions about data and creating measurement tools for the sector.  This is totally, completely necessary, which is why I’m hugely enthusiastic about the work that Acumen Fund is doing with the PULSE tool as well as other similar efforts in the sector.

2. My question is more about how people really make decisions when they allocate philanthropic dollars.  I’m skeptical not because of anything I think about philanthropy or the nonprofit sector (though measuring the changes we are trying to make is harder than in most sectors, I would argue).  I’m skeptical because I see other sectors that have much much better data, and I don’t see that data playing nearly as big a role as one would hope in driving decisions and dollars.   My front-and-center example? The mutual fund industry, in which individual investors make very irrational decisions, in which data on fees is available but somehow doesn’t seem to impact much at all, and in which intermediaries (salespeople) have a very big incentive to meet their own sales goals and divert people from making optimal decisions.

So yes, absolutely, let’s get better data and let’s start using it.  Let’s develop a common vocabulary and let’s put it front and center on all of our materials, so that the most effective organizations (no matter how small or obscure) rise to the top and attract more philanthropic capital.

But let’s also be realistic about the fact that there are many other incentives and actors, that brands matter, that personalities matter, that fundraisers will sell their own stories and that these stories may be much more powerful than the data.

My goal is to insert this into the conversation early, so that we don’t get surprised.  Our sector has a lot of catching up to do, but the data will only get us so far in terms of creating an “efficient philanthropic marketplace.”

Ask 3 questions to practice listening

~ Sasha ~ 2 Comments

There are gobs of advice out there about how to communicate better – whether in meetings or in presenting to big groups or even just in email.  This is important stuff, some of which I’ve blogged about before (most popular seem to be Start with the Punchline, Please and 10 Obvious Tips for Email (that Most People Don’t Follow).

What about listening?  Does anyone out there teach how to listen better?  Does anyone even ask it of you?  It’s amazing when I reflect on my MBA curriculum that – outside of a dim nod to focus groups and the CEOs who “got out to spend time with customers – listening skills weren’t even recognized as something worth cultivating.  Maybe we needed to invite some more cultural anthropologists into the classroom, or it could be that the whole value proposition of business school is to churn out people who can talk their way into that first investment banking job, but listening is getting short shrift as a skill needed for personal and professional success.

Listening starts with the recognition that you don’t have all the answers, and that you have something to learn from the person who is talking.  It requires you to be present, to be active, and to care what other people think.  And, perhaps most obvious, it requires you to keep your mouth shut unless you have something really valuable to say.

If you think that you might not be a good listener, try this: in your next conversation, or the next time you meet someone new, ask three questions in a row of that person (instead of, when they tell you something, saying, “It’s funny, the same thing happened to me the other day….”).  This is a little heavy handed, but doing it will both force you to practice and recognize if your impulse is to turn the conversation back to you.  People love to be heard – so give them that chance.

I had barely thought about this until two years ago when I started working at Acumen Fund, where listening is one of our core values.  We start with the premise that the only way to really break the back of poverty is by listening to poor people to understand who they are, their needs and preferences.  This serves two purposes: on a practical level, it forces the enterprises we invest in to create products and services poor people both want and need.  More fundamentally, it forces us, and the enterprises we support¸ to respect poor people, to afford them dignity, and to recognize them as fully capable human beings with real aspirations for their own lives.

You don’t have to be in the business of serving unmet needs of an underserved population to have this be important or possible.  Start small.  Listen to your co-workers, your boss, someone who works for you or the customer or student or parent or donor you’re meeting for the first.  Really hear what they have to say (and really listen for what they really mean but are not saying).

If you’re the kind of person who says something in any meeting you attend, practice going to meetings and saying nothing.  (And if you tend to keep your mouth shut, listen harder and practice saying something.)

We all play different roles in different settings – are you in a 1-on-1 meeting with your boss; presenting to a big group as an “expert” on a topic; or in a brainstorming session with peers?  It’s so easy to focus on the different things we’re supposed to say in each of these situations.  Don’t forget that you have to practice listening too.

Kiva and Acumen overhead ratios redux

~ Sasha ~ 4 Comments

Sean Stannard-Stockton picked up my post Why overhead ratios are meaningless for Kiva and Acumen Fund in his Tactical Philanthropy Blog, and in reading his summary of my post I realized that I wasn’t as clear as I could have been in the original post.

I was trying to make two separate points, and I think I mixed them together:

  1. For any nonprofit whose main activity is NOT grantmaking, “operational efficiency” ratios (“how much do you spend on overhead?”) don’t mean much.

Here’s the math:  “Nonprofit Grantmaker” has a $10 annual budget.  It spends $1 on “administration,” $1 on raising money, $2 on paying its “program staff”, and $6 on grants.  According to nonprofit math, this organization spends 20% on overhead and 80% on programs.

But what if “Nonprofit That Invests Instead” spends the same amount on administration, raising money and program staff, but instead of $6 in grants it makes $6 in loans?  Nonprofit That Invests is spending 50% of its budget on “overhead” (Its annual budget is now $4, not $10.  The $6 stays on its balance sheet as an asset and is not part of the operational budget).

So even without getting into any discussions about whether loans are more or less effective ways of deploying philanthropic capital, we can agree that there’s no substantive difference between the “efficiency” of these two nonprofits, despite what the ratios say.

The solution?  The onus is on the Kivas and Acumens of the world to reframe this.  And unfortunately this probably requires some heavy lifting because until 990 tax forms explain this clearly, it will continue to feel like fancy footwork explaining “why we’re different.”

2. The second point is not limited to Kiva or Acumen Fund, though I do think our business models shine a brighter light on this question: what is the “core” work of an organization like Kiva or Acumen Fund, and what is “overhead?”

The question Matt Flannery posed on the Kiva blog was whether it makes sense that the engineer who writes the code for Kiva’s website – which in turn connects people to the issue of poverty in the developing world and motivates them to put their capital to work for microfinance customers – is “overhead” (read: bad, inefficient, should be minimized) vs. the person who interacts directly with the microfinance organizations that Kiva works with?  I for one think it makes no sense at all.

And my broader point is that you cannot successfully answer this question without grappling with your own theory of change.

This is why I gave the Grameen vs. BRAC example, and argued that large-scale, paradigm-shifting change happens as the result of lots of influencing activities which, according to traditional nonprofit math, are “overhead” and, therefore, inefficient and to be avoided.  The whole thing seems pretty a**-backwards to me.

Why overhead ratios are meaningless for Kiva and Acumen Fund

~ Sasha ~ 8 Comments

Matt Flannery, the CEO of Kiva, wrote an excellent post on nonprofit overhead over on the Social Edge blog.  Kiva has been a game-changer in the poverty alleviation space: they use Kiva.org to connect donors to microfinance loan recipients in the developing world.  What’s important is the loan part — rather than getting a grant the borrower has to pay back the microfinance organization, which in turn pays back the funder.  Conceptually, this is similar to Acumen Fund, where I work – we raise philanthropic donations and then make debt and equity investments in enterprises that serve the poor in the developing world.  When we’re paid back, we recycle that capital into new investments.

One of the challenges that Acumen Fund and Kiva both face is that our models – focused on innovation, accountability, investment, and better leverage for each philanthropic dollar – are in direct opposition to the traditional metrics that rate nonprofit efficiency.  This is because invested capital (loans and equity), unlike grants, don’t factor into ratio of “overhead costs as a percentage of total cost.”  It just stays on the balance sheet but is not part of the annual budget.

The conventional nonprofit wisdom is that “best in class” nonprofits will spend no more than 20% on “overhead,” breaking down roughly to 10% on fundraising and 10% on administrative costs.

As Bridgespan, one of the leading consulting organizations to the non-profit sector, reports, “Many organizations and their funders are locked in a vicious cycle in which nonprofits are pressured to under-invest in overhead and to under-report their true overhead costs, even when those costs are still below what their senior managers feel is needed.”  Worse still, Bridgespan reports that “The majority of nonprofits [75-85% they studied] under-report overhead on tax forms and in fundraising materials.”

If we’re going to break the cycle, we have to uncover how flawed the underlying logic is.  Here’s where the logic falls apart:

An example: Both the Grameen Bank and BRAC in Bangladesh are world-class organizations that have changed the lives of tens of millions of poor people (mostly Bangladeshi women) through the provision of microfinance services.  Both organizations were founded by visionary leaders upon whose shoulders my generation stands in our work to bring an end to global poverty.

Yet, if forced to choose, I would argue that Grameen had the greater impact on the world because Mohammed Yunus, Grameen’s founder, won the Nobel Prize.  This was a major marker that “mainstreamed” microfinance and allowed the world, and not just the development community, to understand that lending money to poor people could change their lives in new and exciting ways. The result was a huge influx of commercial capital, and significantly more growth in the sector – ultimately leading to millions more served.

My question is: in the 30 years prior to Yunus receiving the Nobel Prize, does it sound right to you that every meeting Yunus had with a world leader, a powerful donor, or a leading journalist would have been counted in Grameen’s “overhead” cost, as separate from the “program” cost of delivering microfinance services to Bangladeshi women?  Should Grameen have “stuck to its knitting” in delivering microfinance services and not wasted money on all the “overhead” of external communications and building a community of friends, advocates, advisors, and supporters, which ultimately led to a global movement in support of microfinance?  (and yes, I know it wasn’t all Yunus, but without him, I don’t think we’d be where we are today).

My point is: it’s not just a little wrong to try to separate out “program” from “overhead,” it’s an outdated (or maybe it was never right) mode of thinking that is based on the premise that nonprofits are primarily delivery mechanisms for pre-determined services.  In reality, nonprofits play an active role in shaping our collective understanding of how to solve important social problems.

And getting back to Kiva and Acumen…: There’s a whole new segment of hybrid organization – encompassing the likes of  Kiva, Acumen Fund, Root Capital, E+Co, Agora Partnerships, sitawi, and others – that deploy mostly non-philanthropic capital for social ends.  Much as we’d like not to worry about the conversation, people do often ask about “overhead ratios” when making philanthropic decisions.

In closing, here are four (more or less related) thoughts:

  • Until “social investors” like Acumen et al. can develop a common vocabulary to  assess how efficient and effective we are (or are not), we will be at a disadvantage in the philanthropic marketplace
  • The nonprofit sector as a whole would be significantly stronger, and better positioned to weather economic downturns, if nonprofits didn’t rely on annual funding cycles.  But raising money over 18 months to pay for costs over 5 years requires an upfront investment – one that will look “inefficient” based on traditional ratios
  • If you care about fundraising efficiency, ask how much it costs an organization to raise a dollar, not how much they spend in total on raising money.
  • Even when asking this question, take the answer with a HUGE grain of salt – raising money, teaching, inspiring people, changing attitudes, motivating people to act….there’s huge overlap in these activities. If you don’t agree, please read my NonProfit CEO Manifesto and let me know how we can all do this better.

Acumen Fund benefit Celebration on November 11

~ Sasha ~ Leave a comment
Vusi Mahlasela
Vusi Mahlasela

Act now!  Acumen Fund is holding its benefit Celebration on November 11th in New York City.  Tony Award winner Sarah Jones will be performing and we will be graced by the voice of Vusi Mahlasela.  It will be a colorful, joyful evening with lots of spirit and a real sense of community.  Click here for more information or here to buy tickets.

(we promise, this ain’t your typical benefit.)

Accepting applications for the Acumen Fellows class of 2010

~ Sasha ~ 1 Comment

Acumen Fund (where I work) is now accepting applications for our fourth class of Fellows.  The Fellows program is a unique opportunity to spend a year working directly with enterprises service low-income customers in India, Pakistan and East Africa, and to be part of a small cohort of dedicated individuals who are working to make real, lasting change in the world.  You can learn more about the Acumen Fund Fellows Program here.  And, from the Acumen Fund Blog:

We are excited to announce that the application process for the 2009-2010 class of Acumen Fund Fellows is now open. Applications will be accepted online until noon EST on October 20, 2008. Detailed information about the program and application the process, as well as bios of current and past fellows, can be found on our website. To apply directly, please click here.

We are looking for dedicated individuals with the moral imagination, the practical skills and the leadership potential to effect real change. The program thus far has been a resounding success – both for the Fellows and the Acumen Fund enterprises they support. Fellows have called their time with the program a life-changing experience, allowing them to build critical business skills and a better understanding of the challenges involved in serving low-income consumers around the world…

Please spread the word!

The need for maternal care in the developing world

~ Sasha ~ 1 Comment
Photo by John Tucker, Acumen Fund Fellow

On a recent trip I took to India and Pakistan for Acumen Fund, I had the chance to visit LifeSpring Hospitals, which provides high-quality, low-cost maternal care. I wrote a blog post about this titled “Can a Hospital be a Breakthrough Innovation?” about my visit there on Mother’s day.

The more I’ve learned about the need for high-quality, low cost maternal care, the more I think that LifeSpring could be a blueprint for addressing an important, prevalent, but under-addressed health problem globally.

In India alone, only 43% of women are cared for by a skilled attendant during childbirth, and India’s 117,000 maternal deaths annually is the highest number in the world. The chances, over a lifetime, of an Indian woman dying due to complications in pregnancy and childbirth are 1 in 70. This makes an Indian woman 5 times more likely to die in childbirth than a Brazilian woman; 18 times as likely to die than a Chinese woman; 70 times as likely as an American woman; and 250 times as likely as a Swedish woman.

I don’t think I truly understood what poor access to maternal services means until I read this article from the Disease Control Priorities Project, which I learned about on Owen’s blog. Here’s an excerpt (be warned, it’s pretty graphic):

In developed countries, fistulas occasionally happen from surgical accidents or radiation therapy and are promptly repaired. Few in those countries have ever heard of the condition. But across much of the less developed world, fistula is an ordinary hazard of childbirth for many women and a permanent blight on countless lives. In those countries, obstetric fistula overwhelming results from obstructed labor, which occurs when the baby cannot pass through the mother’s birth canal because it either does not come head first or is too large for her pelvis. In the developed world, prompt medical intervention, often including Caesarean section, permits a delivery safe for both mother and child. But thousands of times each year in poor countries, birthing women receive no such aid and their labor is a futile agony lasting up to five days, with uterine contractions constantly forcing the baby, usually head first, against unyielding pelvic bone.

Long before the mother’s torment ends, however, the unremitting pressure kills the child. It also cuts off the blood supply to the soft tissues of her vagina and other organs trapped between the baby’s skull and her pelvis. Eventually these tissues also die, forming one or more fistulas, and the baby’s head softens sufficiently for the stillborn child to pass from her body. Should she survive, the mother soon finds urine, feces or both leaking unstoppably from her vagina. In about a fifth of cases, the woman also suffers nerve injury that can cause a condition called footdrop, which prevents normal walking. Constant contact with urine or feces irritates and infects her skin and other tissues. Her kidneys, bladder, or other nearby organs may also be damaged. Her menstrual periods may stop, rendering her infertile.

The article goes on to describe that, in addition to this physical and psychological damage, the mother often becomes a social outcast. It is stories like this that give me a real sense of urgency about the need to find, nurture and grow enterprises that are finding solutions and positioned to grow, and grow fast.

Acumen Fund Breakfast Discussion on Energy

~ Sasha ~ 1 Comment

[Editor’s note: this entry was originally posted on the Acumen Fund blog.]

Yesterday morning, Acumen Fund hosted a monthly breakfast for members of our Partner community featuring Acumen Fund Director of Capital Markets and Energy Portfolio, Raj Kundra. With 30 guests in attendance, this promised to be an engaging discussion.

Brian Trelstad, Acumen Fund Chief Investment Officer, opened up the discussion with reference to Acumen Fund Advisory Council member Peter Goldmark, who observed in 2006 that marginal changes in the climate will affect those on the margins first and most profoundly. Later that year – in no small part due to Peter’s influence – Acumen Fund made a Clinton Global Initiative commitment to launch an energy portfolio, and we began our work in energy 12 months ago.

Raj began the talk with a description of the Acumen Fund model, and how we raise philanthropic capital to invest in breakthrough enterprises that provide critical goods and services to the poor – with a focus on health, water, housing, and most recently energy. So while Acumen Fund acts like a venture capital firm, we differentiate ourselves with our focus on large-scale social impact, coupled with economic sustainability, as our primary objectives. We invest in management assistance to support our investees – both before and after we make an investment. And we believe in the power of sharing what we are learning, based on the recognition that in a world with trillions of dollars of capital, we will always, by definition, be a relatively small player.

Raj continued with a discussion of the poverty trap that poor people face with respect to energy. As of 2005, poor people spent more than 14% of their incomes on energy, and Raj estimates that these numbers have increased to over 20% with the recent surge in energy prices. In addition, the poor often use fuel sources that are expensive, inefficient, and dangerous (for example, kerosene lamps or burning wood for cooking in open spaces). Finally, with limited access to energy, productivity (whether on the farm or the result of the shortened day for studying or work) is simply lower, all of which contribute to a ‘poverty trap.’

Even though this problem exists, there’s a significant market opportunity in energy, with the poor spending roughly $433 billion a year on energy – or about $100 per person per year – most of which is in Asia. So a lot of spending is already happening today, and the question for Acumen Fund is how to find entrepreneurs who are looking to provide products that are better, safer, more energy efficient, and therefore lower cost for poor consumers.

Raj scoped out Acumen Fund’s focus areas as broadly divided between “Renewable Energy Generation & Supply” (micro hydro, wind, biomass, solar, biogas, and biofuels) and “Energy Consumption & Appliances” (high efficiency lights, cookstoves, and other household level applications). Broadly speaking, Acumen Fund sees opportunity in these two areas, though some areas (like large scale generation and supply, where the state plays a heavy role; or direct-to-consumer retailers) look to be out of scope for now. Raj went on to describe Acumen Fund’s portfolio of closed and approved investments, totaling $2.5 million, which focus on LED lighting and a micro-hydro provider in India; as well as our late-stage pipeline of about US$4 million of investments on which we are doing serious due diligence. We are seeing significant progress in the portfolio and expect it to grow considerably over the coming 12 months.

Raj closed the presentation with a diagram of what it takes to navigate the carbon markets, pointing out that there are across the board opportunities for Acumen Fund to provide expertise and support to entrepreneurs; and also noting that there’s a particular role for patient capital to play in these markets, where a two year certified emission reduction process can significantly alter the economics of a given investment.

This discussion quickly shifted gears, touching on LED light prices (currently US$10 to $30, with the expectation that costs will continue to drop as companies scale); the role of mini-grids (by definition less efficient, but potentially effective in areas where the grid will not be built out for the foreseeable future); how to ensure that customers get access to energy; whether and how Acumen Fund should invest in biofuels companies (where we have been extremely cautious); how we think about environmental impact in this portfolio in particular; and how to compare various options at the level of the low-income household, to decide which interventions might have the greatest impact.

In the end, I was left with a sense that Raj and Acumen Fund have both a broad and deep understanding of the energy market, but that there are a number of truly complex issues where we and others still have a lot to learn. We hope to continue to learn by doing, supporting entrepreneurs with the passion, vision, and commitment to execution to help millions of people to escape the poverty trap.