How Does Acumen Fund Measure Social Impact?
Posted by Katrina · Leave a Comment
In this video interview, we had the good fortune to meet up with Molly Alexander, Manager of Business Development at Acumen Fund, at Acumen’s headquarters in New York City. In this video, we continue the conversation about how Acumen Fund measures social impact and evaluates success of its social ventures worldwide. For Part I of our conversation with Molly, be sure to also check out “How Acumen Fellows Are Selected”. Thanks for watching, and be sure to leave a comment below and rate this vid. What other measures of success can you think of to effectively evaluate social impact?
The Full Transcript
KATRINA: For these projects you have around the world, how do you measure the success of each project?
MOLLY: It’s been one of ours and I would say more broadly, one of the social sector’s biggest challenges. You know, our metrics work. I mean there’s a lot of different people at Acumen who work on it, but it’s really, quite frankly, attributable to Brian Trelstad who’s our Chief Investment Officer. When we had a small loan portfolio of ten companies it was very easy for us to manage all of this data on Excel sheets. And now we have 38 million US dollars invested in over thirty five entrepreneurs. So the scale of what we need to manage, let alone how to make sense of that obviously became a challenge for us.
So we actually partnered with Google, engineers from Google, and have since garnered support from Skoll Foundation, Rockefeller Foundation, a number of other groups that are all part of the ANDE network, the sort of social venture space collaborative group, and have developed a program called Pulse. And what Pulse does is allow us to measure for each and every investment, the financial, operational, and the social impact data.
And so what we’ve been able to do within Acumen is start to aggregate across portfolios where we’re having the most impact for the dollars that we’ve invested. But what’s getting even more exciting, is of course through the leadership of Andy and Jean the Global Impact Investment Network, and also now IRIS, which is another group that spawned out of all of this – different organizations throughout the social sector are in fact using this tool. By the end of this month, it’s actually going to be free to use on the Salesforce.com platform for all non-profit organizations – which is amazing, because there was no tool out there before. But again, even more exciting than that is that this sector as a whole will start to see where we’re seeing real breakthroughs and what types of business models work where and how we can really learn from one another.
KATRINA: When it comes to partnerships and collaboration, what role does that play in the success – it sounds like from Pulse you’re collaborating with Rockefeller Foundation and others – what role on a project-by-project basis does partnerships play for success?
MOLLY: It’s interesting because we talk about our investors, our donors, as partners. And so anybody who is essentially making a gift of US$ ten thousand dollars or more to Acumen is a partner. But I think what’s interesting is that that phrase is really starting to be redetermined. I mean, talking about the group of partners who have supported Pulse, there’s obviously a very strategic and specific collaboration going on. There’s other groups such as GAIN, which is the Global Alliance for Improved Nutrition, which has made an investment in Acumen and is working with us deliberately to make investments in 6 – 24 month year old improved childhood nutrition.
So it’s really about, quite frankly one of the challenges that I think the social sector faces is that the idea of partnerships and collaboration are often thrown around as real buzz words, and what we found is that it’s really hard to create partnerships that really work. We tend to move away from specific co-investment with other organizations. Again, if we have strong partnerhships with organizations it’s conversations we can have. But most importantly for us is understanding each partner, what their strategic value really is, and then trying to build from that. So, we’re relatively hesitant and wary to throw the word of partnership around within the social sector. But I do think that the success of things like Andi is showing real collaboration.
I think, you were at CGI (Clinton Global Initiative) last week as well? Yes, Willy Foote who is one of the founding members of Andi was sort of throwing around this phrase, “pathological collaboration”. I know that Bill Clinton ended up using it in his closing remarks. And I think that’s where it’s starting to get really exciting, but the challenge is that the buzzword can be thrown around a little too much. And creating partnerships is, I think, the next iteration for the sector.
KATRINA: On your website you do mention quite a bit this concept of “patient capital”. Can you elaborate on that?
MOLLY: Yes, it’s a phrase I think that’s used more and more these days. The way we think about it is that there’s such a debate going on out there at the moment around whether or not, you know, “aid vs. trade” is the most simple breakdown of it. There’s certain camps that are calling for a cease to aid, and there are other camps that are calling for a real increase to aid.
The way we think about is that there’s really a role for both aid and market-based approaches to play. And again, the model of Acumen Fund is very representative of that. So we’re using charitable dollars, but we’re investing them. So we invest using loans and equity directly into these businesses. And these businesses themselves are using market-based approaches, so there’s a fee associated with every good or service they are delivering. And so this idea that there’s value and there’s a real need for aid, and there’s dollars out there and they can be mobilized in the right way and in the smart way, to have a real impact.
Likewise, the market is really the best listening device that we have. So what patient capital is really saying is how do we find a middle ground between the two, and rather than “is it aid or is it trade?”, how do we talk about using aid more effectively, and leveraging these dollars in the right way, and then measuring them and figuring out what we’re learning.
KATRINA: Fantastic. Thank you so much for your time, Molly. I really appreciate it. It’s been a delight talking with you, and we can’t wait to hear more about what happens with Acumen Fund.
MOLLY: Thank you.
About: Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. Website: 
About: Rockefeller Foundation works to ensure that the opportunities unleashed by globalization are accessible to more people, more fully, in more places — and that poor and vulnerable people are equipped to seize them. Website: 
