If you go to the New York Stock Exchange ... or the London Stock Exchanges ... or any other major stock market, there are thousands and thousands of companies listed, all of them doing their best to grow sales and make profits. Sadly there are almost no organizations that are committed to building social value ... yet it is social value that is most needed in order for society to have any chance at a future with an acceptable level of quality of life!
Some weeks back I got this message from the founder of the Acumen Fund, an organization engaged in "social investment".
May 18This message is positive ... and I like optimism. But I would observe that most business organizations have little or no focus on the social importance of their work. And while the Acumen Fund is quite well known in the social business space it is tiny compared to the profit centric entrepreneurial organization. Worse, there are very few organizations like the Acumen Fund compared to thousands and thousands doing for profit work with no interest in the social impact.
When I was in business school, company growth was frequently depicted as a lovely upward curve. However, my experience has been that growth happens in sharp steps, some upwards and some downwards. The process is anything but smooth or predictable.
In the past few months, it feels like Acumen Fund is in the midst of a big leap, with all the excitement and anxiety that can provoke. We’re seeing more robust and widespread growth and impact among our companies. The ambulance company 1298 recently signed contracts with multiple Indian state governments. Over the next 3-4 years, more than one million people will be served. The company also will hire more than 2,500 individuals (1,000 in the next few months). Ecotact just launched two more public toilets, taking their total to 26 active facilities. D.light recently hit a milestone by bringing affordable, safe solar power to more than one million people. Our companies are on the move!
I remember when we first started Acumen, many believed we would see outsized social impact but were doubtful about exits. We are actually beginning to see capital returned from our investments – of the $2.1 million of capital expected to be paid back to Acumen in 2010, we have already received $1.2 million since January. This means an additional $2.1 million that we can invest in other innovations serving the poor. As the person most responsible for fundraising, the power of this can’t be overstated.
We’re learning at a faster rate. Some of the lessons are due to our finding that we made incorrect assumptions when we started Acumen. When it came to government, for instance, Acumen feared corruption and mismanagement – often, for good reason. But social entrepreneurs can grow companies and organizations only so large without government or the capital markets. With the right counterparts, government provides an answer that will extend services to the widest array of people, especially when it comes to reaching those who the markets might not ever touch.
We also were wary of companies that depended too heavily on institutional sales rather than selling directly to low-income consumers. We still focus our aim on building companies with diverse customer bases. But when you see VisionSpring selling hundreds of thousands of pairs of eyeglasses through BRAC, one of the world’s most extraordinary organizations, you see the potential of using a growing ecosystem of social enterprises to help distribute critical goods and services to the poor in myriad ways.
Beyond our investments, our community is rapidly expanding in a thrilling way. Chapters for Acumen are emerging in cities around the world, including New York, San Francisco, Dubai, Chicago, Washington DC, Pakistan and more. These are organizations typically headed by young professionals and can include anywhere from a few hundred to more than a thousand individuals who form an active part of our community, meeting to learn, discuss and raise resources for this work. Most recently, New York for Acumen raised $27,000 during a wonderful spring event, and Dubai for Acumen raised $15,000 in their Inaugural Spring Benefit. We could feel neither prouder nor more excited for the future of the chapters.
Our community is also increasingly global. Due to the generosity of the Tokyo Foundation and the Japan Society as well as two outstanding volunteers, I participated in a week of events and discussions surrounding the launch of The Blue Sweater in Japan. We found strong interest in the ideas of Patient Capital and a yearning among both local institutions and young people to play a greater role in social entrepreneurship and the global issues of our time.
From Tokyo to the Cairo Summit in Washington, DC: President Obama invited 200 delegates, largely from Muslim countries, to Washington to honor promises made in his elegant Cairo speech last January. I felt a swell of pride in seeing Acumen’s representation: five Acumen entrepreneurs (Shaffi Mather of 1298; Jawad Aslam of AMC; Roshaneh Zafar of Kashf; Magda Iskandar of Care with Love; and Helmy Abouleish of SEKEM) as well as a number of Acumen partners, including Fadi Ghandour, Arif Naqvi, Fred Sicre, Kashif Zafar, and others. In terms of follow up, we are talking to a number of officials in DC, exploring ways in which Acumen could be supportive while also staying true to our mission and investing approach.
We’re also meeting amazing storytellers who are bringing the ideas of Patient Capital to a more mainstream audience. PBS NewsHour did an excellent piece on Ecotact’s work on public sanitation in Kenya. Christiane Amanpour brought forth a “different face of Pakistan”; and we’re also reaching new audiences through an interview with Katie Couric in Glamour magazine. Next month, we are excited for the airing of a documentary on our Fellows Program. The New Recruits is a Skoll Foundation-funded film being broadcast on June 15th on PBS about three Acumen Fellows who are working to bring a new approach to tackling poverty through business. It is likely to raise Acumen’s profile and also spark conversation about our work – and the phenomenon of the current generation that is increasingly interested in using business skills to change the world.
Finally, two founding board members, Angela Blackwell and Cate Muther, completed their nine-year terms with Acumen Fund. It is with the greatest appreciation and a bit of sadness, too, that we thank them for their immeasurable service in bringing Acumen to life, and bringing it through its early stages of development. We also welcome David Heller, Co-Head of the Goldman Sachs Global Securities Division, to the board. David brings not only powerful skills and experience, but a way of listening to others and a deep commitment to giving back that is at the core of our values.
So what does this feeling of transition really mean? To me, it means doubling down on the anchor that is our portfolio: getting smarter, digging deeper, doing what it takes to scale and strengthen and partner with our investee companies to provide the world with real examples of what Patient Capital can do. At the same time, we are actively seeking to exchange ideas and knowledge with our peers and major stakeholders that can help us advance the idea of Patient Capital and investing in leaders through our Fellows, our team and our growing community around the world.
We will need your help to do it. We will need your help as communicators, as fundraisers, as champions. Every day, I am more convinced that Patient Capital is an important way to effect fundamental change in the lives of those who for too long have been left out of the opportunities of the global economy. Wayne Fletcher, President of Sandbox, a division of Media Brands (which has been giving generous pro bono support to us), has said, “Acumen is a philosophy.” Maybe that philosophy isn’t Acumen alone but is something bigger than us altogether, the ideas surrounding Patient Capital and what it means about the way we see low-income people.
It begins with a fundamental belief that each of us is born equal and each should have the opportunity to pursue our dreams. And as I keep learning, by providing choice and freedom, we give dignity not just to the poor but to all of us.
I wish you peace, and thank you always for your support of this work,
I understand this ... business has to be profitable in order to stay in business! However, I would also argue that there is no point in having business that is profitable when its basic business model destroys value in society.
Without value metrics, most organizations do not know very much, if anything, about the value dynamic of their activities. Everyone knows something about money accounting and the calculation of profit ... but almost nobody knows anything about the value proposition that coexists in the money profit business model. Without specific attention to value, it is easy for value to be destroyed to the detriment of society.
There has to be deployment of value metrics ... sooner rather than later. In my view, it will be a game changer!