To alleviate poverty in the global south, the New York-based Acumen Fund has for the last 15 years invested in businesses that serve the bottom of the pyramid, like solar-light manufacturer d.light and Burn, which makes and sells cookstoves in East Africa.
Now, unexpectedly, Acumen is coming home.
Acumen has just launched a fund to invest in businesses that serve low-income Americans, as I reported the other day in The Guardian. A nonprofit led by Jacqueline Novogratz, a former banker and foundation executive, Acumen raises charitable donations and invests them in businesses and social enterprises.
This story was worth telling for a couple of reasons, I thought.
First, I’ve been a fan of Acumen’s market-friendly approach to fighting poverty since meeting Novogratz in the early 2000s at a Fortune Brainstorm conference. It has invested in small-scale agriculture, low-cost schools, pay-as-you-go clean energy providers, and health care startups, all of which are aimed at improving lives of the world’s poor. We can be confident that poor people want the products and services that Acumen’s portfolio companies deliver because they are paying for them.
Second, Acumen’s decision to operate in the US got me thinking about relative poverty and absolute poverty. I’ve written on this blog about my bias towards helping the extreme poor, which means giving money overseas. Could being relatively poor in a wealthy country like the US be nearly as painful as being extremely poor in a poor country like Ethiopia?
The Robert Wood Johnson Foundation, Barclays and The Hitachi Foundation are the first philanthropic supporters of Acumen America. They have given $7 million, and Acumen is raising more. So far, the fund has made two investments, one in tech company called WorkAmerica that connects community college students to employers and another in Healthify, which enables healthcare providers in low income communities to fully address the needs of their patients.
You can read my story in the Guardian here.