Acumen is a non-profit organization headquartered in New York. Jacqueline Novogratz founded it in April 1, 2001 with the seed capital from Rockefeller Foundation.
Although Novogratz first began her career as a finance manager in a bank, she soon changed her job as a consultant of the World Bank and UNICEF. Over the course of her working as a consultant, she had an opportunity to work in various different worlds where she explored huge gap between the rich and poor. She also derived inspirations from the organization addressing the problem of poverty. In particular, Rwanda’s microfinance organization Duterimbere was an epitome of modern social enterprise to deal with poverty issue. Being fully inspired, Novogratz established Philanthropy workshop in Rockefeller Foundation, a philanthropic organization that specializes in the field of healthcare. After that, he founded Acumen and showed durability and consistency of Acumen in addressing the poverty issue.
The foundation of acumen fund is Novogratz’s one of the greatest achievements. Despite his initial inspiration was derived from Rwanda’s microfinance organization Duterimere, she took different approach to address the issue of poverty. She devised a system of ‘patient capital’. Patient capital is a type of capital that focuses on long-term profit. Owing to its long-term durability, patient capital is particularly useful in business. Since every business start with paucity of funds and capitals, we investors cannot expect high profit from them in a short term. Being aware of this, business investors make investment to businesses that have a potential to make a high profit in the future.
Both for profit organizations and non-profit organizations like Acumen accept the concept of patient capital. For profit organizations simply employ this to make potential revenues. On the other hand, philanthropic organizations assess the social leverage and the social sustainability of a business to maximize social contentedness instead of revenue.
As a result, Acumen fund does not give loans but identifies promising businesses that will make a huge social impact. Longer time horizon and tolerance over the repayment of loans also differs them from microcredit organizations as they urges individuals to repay loan as soon as they can.
Investment and innovation
Patient capital is invested into 6 different categories: Water, health, housing, agriculture, energy and education. So far, these array of broad spectrum that Acumen addresses are changing the fabric of our society and will continue to do so.