Jacqueline Novogratz, the CEO of the Acumen Fund, started as an international banker, then drifted into the aid world in Africa. According to the New York Times, Novogratz became frustrated that many of the aid projects didn't help and sometimes made things worse. In Rwanda, she became involved in a bakery project, in which 20 poor women made doughnuts and samosas to sell in the neighborhood. Two charities subsidized the project at the rate of $650 a month – more than $1 per woman per day – and yet the women earned only 50 cents per day from selling the baked goods, too little to survive. Jacqueline helped the women transform it from a charity project into a real business, in which they turned a profit and averaged $2 a day in earnings each.
This experience was one of the early inspirations for the Acumen Fund, which today states its mission as working to create a world beyond poverty by investing in social enterprises, emerging leaders and breakthrough ideas. They invest patient capital in business models that deliver critical, affordable goods and services to the world's poor, improving the lives of millions. Since 2001, Acumen Fund has invested more than $70 million in enterprises that provide access to water, health, energy, housing, education and agricultural services to low income customers in South Asia, East Africa and West Africa.
For impact investing to work, it has to make genuine investments in businesses that can generate a return. According to the Monitor report on impact investing, From Blueprint to Scale, Acumen Fund's investing experience reflects this reality: it has considered more than 5,000 companies in the past ten years and has invested in just 65 of those. Recent Monitor studies of inclusive businesses on the ground paint a similarly challenging picture. The team looked at 439 promising inclusive businesses and found that only 32 percent were commercially viable and had potential to achieve significant scale. Only 13 percent were actually operating at scale.
No comments:
Post a Comment