Acumen Fund lands in Toronto

Last Monday night I pushed my way through a large and boisterous group, made up primarily of Generation Yers (or is it Z already?) and, despite my aversion to crowds and a case of jet lag having just returned from Costa Rica the night before, I was glad I did. What brought so many faces out to Czehoski on a Monday night, you ask? It was the ceremonious launch of Acumen Fund'€™s Toronto Chapter


The brainchild of former Wall Street maven Jacqueline Novogratz, Acumen Fund is a nonprofit social venture that puts its unfettered faith and hope in the power of entrepreneurs to fight the longstanding scourge of global poverty. Believing that neither charity nor markets alone can meet that radical challenge, Acumen promotes a hybrid paradigm that combines both. This blended values approach, investing in solutions that have potential for social impact and profit, has been paving the Fund’s path to change since it launched in April 2001.

Also referred to as patient capital -- debt or equity investments of $300,000 to $2,500,000 in an early-stage enterprise with payback or exit in roughly five to seven years (but unlike a typical venture capital firm, if that goal is not met, Acumen won’t walk away) -- financial and social returns are the result. Don’t look for grants here, though; you won’t find them. What’s more, all financial returns are recycled into new investments, with every dollar invested leveraged four times.

Today, Acumen Fund boasts 27 investments and a portfolio worth just under $40 million, not including a recent capital markets fund of $15 million. The focus is on supporting enterprises that provide low-income consumers with access to five specific areas: health, water, housing, energy and agriculture. And by the look of it, they’re getting somewhere. Case in point: D.Light, which uses LED technology to provide a much-appreciated alternative to kerosene lanterns, known to be more expensive, lower in quality and veritable fire hazards. As a side note, it is estimated that more than 1.5 billion people in the world live without access to electricity.

D. Light was created by social innovators and funded by Acumen ($800,000 in 2008, $400,000 in 2009) and a number of other investors. And how is the hybrid model working for them? Well, let’s see. Since 2007, D. Light sold 115,000 lights, impacting an average of 500,000 lives while their main competitor, Tata --dependent solely on grants -- sold 5,460. Not exactly a full-blown analysis or conclusion, not by a long shot, but the numbers make it well worth taking a long, hard look at the patient capital model and its potential for real change.

Interestingly, as I made my way across the crowded room, chatting to whomever I could (tripping the waiter and stepping on about five toes in the process), it occurred to me that while many attendees knew a lot about consulting and business, they knew little about venture philanthropy. When asked what brought them here, the answers were diverse but shared one common theme: the desire to support a different way of doing business toward the eradication of poverty. Considering the response to the event, it seems the new Toronto chapter, with its goals of fueling knowledge, conversation, fundraising, awareness and more, is heading on the right track.

By Elisa Birnbaum

A Sea-Change in Citizen-Led Water Action

I tripped upon an interesting blog the other day, Reversing the Flow by Brita Belli in eMagazine (April 2010). In it she talks about the Global Water Network. She says “Earth Day Network’s lesser-known side project is called the Global Water Network. Unlike the much more visible Earth Day—celebrating its April 22 40th anniversary this year with projects that include ‘A Billion Acts of Green’—the Global Water Network (GWN) is only in its second year.

It’s a means for connecting donors with water projects across the globe—with Earth Day Network (EDN) acting as a conduit, especially in encouraging U.S. schoolchildren to take up collections for children abroad who lack clean drinking water access and proper sanitation. ‘In the U.S.,’ says Beth Larson, EDN’s international education coordinator, ’students don’t feel empowered. But just a small amount of money can go a long way in places like Burkina Faso.’”

Absolutely! Small amounts of money can go along way around the globe, Canada included. We have a project profiled on www.smallchangefund.org right now, for example, that only needs $1250 to upgrade a boat so that the organization, Fundy Baykeeper, can expand the scope of their water monitoring work. A little can go a long way. It’s a great point. It’s also interesting that she’s hit on the issue of connecting donors and empowering students. That’s a big challenge and one we’ve taken to heart at Small Change Fund. How do we engage – truly engage – Canadians in protecting our precious water resources and those of communities around the globe?

Brita goes on to talk about the collaborative work between our global partner, Global Greengrants Fund, and Aveda. “Hair and skin-care company Aveda has had a partnership with Global Greengrants Fund for more than a decade, in order to direct money to environmental causes and has seen a ‘dramatic spike in fundraising with the issue of clean water,’ says Katie Galloway, Aveda’s Earth Fund manager. The company itself looks for ways to lower its water footprint, she says, and has expanded Earth Day to ‘Earth Month,’ since 1999.

Through sales of a limited edition ‘Light the Way’ candle, as well as via Walks for Water, Aveda raised some $3 million for environmental causes last year, just over $1.1 million of which went to Greengrants. And the company specifically directs grants to areas of the world where they source ingredients. ‘The best example is Madagascar,’ says Galloway. ‘A lot of our essential oils and aromas are sourced there, such as clove and cinnamon…Greengrants did a grant in the Southeast part of Madagascar where they cleared out a well and installed a solar tank and water tank. As a result, 2,000 people in Madagascar now have access to clean water.” But despite this she says, “Lack of funding is the biggest impediment to fresh-water access in the developing world.’”

We need to celebrate the companies that are putting money back into communities. Like Aveda. Like Lush that recently funded 4 Small Change Fund projects. (Thank you Lush!). What’s more, we need to explore, promote, refine, and celebrate the new tools that provide a gateway for everyone to support water work world-wide to help meet grassroots funding challenges. Organizations like Charity:Water, Kiva, Small Change Fund, and Social Actions are pioneering new ways of galvanizing citizen-led action on important social and environmental issues around the globe. But it’s all new. There’s no real road map. We’re all feeling our way along to the most effective, most engaging, most sincere, most transparent means of empowering you, empowering all of us, to get involved. So how do we do it? We need feedback. We need inputs. We need to learn.

Which brings me to one of my favourite authors, the late Donella Meadows of the Sustainability Institute. She was so wise. She said “Working with systems, on the computer, in nature, among people, in organizations, constantly reminds me of how incomplete my mental models are, how complex the world is, and how much I don’t know. The thing to do, when you don’t know is to learn. What’s appropriate when you’re learning is small steps, constant monitoring, and a willingness to change course as you find out more about where it’s leading. That’s hard.”

It’s hard, but it’s necessary and perhaps the only way in this world of social innovation, new media, and change-making. So help us find out more about the engagement question. How do we connect you to global water causes? How do we empower a sea-change in citizen-led action? How do we realize the power of your small change?

By Ruth Richardson, originally published at SmallChangeFund.org