Acumen Fund: 10 years of patient capitalism

Acumen Fund was started 10 years back in 2011 as an investment model to fight poverty around the world. It is a great model to initiate social enterprises and social entrepreneurship around the world.

These are the ten things they have learnt in the last ten years. According to them in the last 10 years more and more organisations have come up in the “impact investing” sector and they are now about 1999 as of 2010.

So the lessons learned:

  1. Dignity is more important to the human spirit than wealth
  2. Neither grants nor markets alone will solve the problems of poverty
  3. Poverty is a description of someone’s economic situation, it does not describe who someone is
  4. We won’t succeed in the long term without cultivating local leaders, local money and strong communities
  5. Great people, every time, no exceptions
  6. Great technology alone is not the answer
  7. If failing is not an option, you have ruled out success as well
  8. Governments rarely invent solutions, but they can scale what works
  9. There is no currency like trust, and there are no shortcuts to earning it
  10. Patient capital investing is built upon a system of values; it is not a series of steps to be followed

Jacqueline Novogratz founded Acumen Fund and she has written about the background and growth of the sector in her book, The Blue Sweater.

From the Economist:

In “The Blue Sweater”, her recently published autobiography, she describes her past frustrations working in such pillars of finance and development as Chase Manhattan bank, the African Development Bank and the Rockefeller Foundation. She found them bureaucratic, distant and condescending to those they sought to help. So in 2001 she set up Acumen Fund, a “social venture capital” outfit, to promote what she calls “patient capitalism”. Acumen is an odd mix of charity and traditional investment fund. It takes donations from philanthropists in the usual fashion, but then invests them in a businesslike way, by lending to or taking stakes in firms. The recipients—private ventures aiming for profits—must serve the poor in a way that brings broader social benefits. Acumen goes to great lengths to measure those benefits, and thus the efficiency of its work.

Acumen’s charges are a diverse bunch. In India, Drishtee runs a network of internet kiosks in rural areas, while LifeSpring runs low-cost maternity hospitals. A to Z Textile Mills, a manufacturer of antimalarial bed nets, has grown to become one of Tanzania’s largest employers. Some ventures, including a Pakistani mortgage provider and an Indian pharmacy chain, have flopped. But many others manage to repay their loans (granted at below market rates) or generate dividends. Acumen reinvests its profits in other companies, thus stretching the initial donations further.


Ms Novogratz dismisses those such as Jeffrey Sachs, an influential economist, who think that the bottom billion are too poor to be treated as consumers, and should sometimes receive handouts instead. “When Jeff Sachs says every poor person should receive a free bed net, I agree—but in reality many end up not receiving one,” she says. “And I don’t live in a world of shoulds.”





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