A recent paper titled “Fortune at the Bottom of the Pyramid: A Mirage” stirs up debate around the business opportunity around the poor – and garnered a response from C.K Prahalad. The paper argues that the only way to alleviate poverty is to focus on the poor as producers – not as consumers – to raise their income. We, like Prahalad, believe that these are not mutually exclusive. Given the right access to choices, the poor can make consumer decisions that increase their ability to generate income and improve their overall quality of life. The fact that there is ongoing debate around this idea reinforces the need for Acumen Fund, and others in this space, to continue to find and support examples of enterprises that are successfully serving the poor.

The MacArthur Foundation recently announced their prestigious “Genius” Awards, and it was thrilling to see two of our peers, Jim Fruchterman of Benetech and Victoria Hale of One World Health, be named to this most exclusive list. Both Jim and Victoria are social entrepreneurs, using the practices of business to implement social visions to improve the world.  We’re proud to know them both and proud to see social entrepreneurs being honored in this way. The world is changing as this most vital sector begins to emerge and reshape itself. Congratulations to Jim and Victoria and all who work with them.

I came across this (rather long but very interesting) article in The Economist about how ‘business angels’ step in to provide small entrepreneurs with access to capital where venture capital firms are often wary of going – for reasons of risk or simply, size.

In a way, I suppose we could think of Acumen Fund as a ‘business angel’ for social enterprises – we step in and place our bets on innovative social entrepreneurs and effective ideas and business models that manifest the potential to reach underserved markets. We help give socially driven market-based ideas wings by going a step further than simple financing and providing intensive management support to incubate social enterprises until they are ready to fly on their own.

Great article on the front page of the New York Times about our partner Google.org and its executive director, Larry Brilliant.  It is really exciting to see Google.org push boundaries around what is possible and how we need to use ALL of the resources at our disposal to solve tough problems of poverty. If there is one thing our work over the past five years has taught us, it is that to be more effective, philanthropy cannot be thought of only as money given to help people. Google has such great reach in the world that it can influence entire sectors using much more than its money - and their vision is an exciting one.

From Acumen Fund’s perspective, watching ideas that were seen as crazy five years ago be instituted as more mainstream also is a reminder that change can happen. Varun Sahni , our India Country Manager, and I had a breakthrough with a reporter in India when she asked us if we were the new “Missionaries of Charity.” After thinking about it, we said, that no, we were not missionaries; that the world needed to get away from a bifurcated vision that organized itself in business, government and charity. Instead, what is needed is to think about how we, as a more interconnected world, need to organize ourselves to use our resources more effectively to enable all people in society to flourish. In the 21st century, it will take new kinds of organizations that incorporate ways of reaching the poor as well as covering their costs. Acumen Fund is experimenting with these new kinds of organizations - and through these experiments, will learn better how to serve people so that they can make their own choices in life.

We’re learning daily and also learning from new partners like Google who are pushing the envelope. It couldn’t be a more exciting time.

Acumen Fund CEO Jacqueline Novogratz’s latest journal entry from Pakistan follows.

September 3, 2006 – Karachi, Pakistan

In the late afternoon, we visit Mir Ibrahim Rahman and Imran Aslam at GEO TV. The air at GEO crackles with the excitement of young people using the power of the media to change the world. I’m struck by the power of this partnership between the young and innovative Mir with the more seasoned, deeply insightful Imran. They are trying to change the nature of media between them and turning issues on their heads. Their most current programming focuses on Satan telling people what to do given their assumption that Pakistanis prefer doing things they are not supposed to do. The cartoon-like Satan at GEO will beg people to chew pan, a traditional mix of betel and other leaves and spices, and then spit the red juice on the sidewalks and floors. It will ask people to litter and despoil places, too. You have to be intrigued by this station’s sense of humor as it looks at its own culture squarely in the face.

I have been watching GEO’s work on the Hudood Ordinances for the past several months and believe it has many lessons for Acumen Fund – and the world. Pakistan’s Hudood Ordinances are a repressive set of laws, focused largely on the rights of women. One of the worst is the ordinance stating women must have four male witnesses to prove a case of rape. They have been justified largely on the basis that they come from the Quran, and no recent government has been able to overthrow them in large part due to pressure from conservative forces. GEO interviewed seventeen religious scholars, including a number who actually helped create the Ordinances, to ask whether they did indeed come directly from Quranic law. Essentially, every one stated that the ordinances were man-made and, indeed, did not come directly from the Quran. Moreover, the campaign created widespread discussion about the Hudood Ordinances throughout the country. Recently, the government has moved forward a bill to overturn most of the Ordinances – to public outcry from some of the most conservative elements in Pakistan. (more…)

Acumen Fund CEO Jacqueline Novogratz is traveling. Her latest journal entry from Pakistan follows.

September 3, 2006 – Karachi, Pakistan

I love the Karachi papers. For a country that jails many of its journalists, the press is surprisingly free and certainly outspoken. Most of the articles are critiquing the government’s handling of the death and burial of Nawab Bugti, the tribal leader from Balochistan, one of Pakistan’s poorest regions. Of course, adjacent to these articles are columns about cosmetic surgery’s rising popularity and the MTV awards. We live in a world where the rich are living in different worlds entirely than the poor, in their shared countries. Perhaps it has always been this way – it is just that today, the differences are not only so stark but so readily, constantly visible. (more…)

Interesting article on looking at market-driven solutions for healthcare prevention. One of the main reasons cited for chronic poverty is huge expenditure on healthcare, in part because treatment is so much more expensive than prevention. This is what makes vaccines so important. In many cases, the world has vaccines but not the distribution systems. In Pakistan, for example, the cost of a Hepatitis-C vaccine is approximately $25; treatment for the chronic disease that attacks the liver and can result in death at least $600. In Lahore, Pakistan, it is estimated that 12-15% of the population is infected with the disease. Our partner, Kashf, is launching a micro-lending program to provide financial options to poor people infected with the disease to help them cope – for without treatment, they are often unable to earn any income at all to survive.

There has to be a better way. Acumen Fund is searching for reliable information on effective vaccine distribution. Let us know if you know of successful, sustainable examples of vaccine distribution to large numbers of people for diseases beyond polio, measles and TB.

Acumen Fund CEO Jacqueline Novogratz is currently in Pakistan, and, as usual, she is keeping a journal.

Karachi, Pakistan - September 1, 2006

After a day of meetings in London, I flew into the Karachi airport. This time has been a reflective one for me, as we’ve been working on Acumen Fund’s five-year report.

Our history will be forever tied to two significant moments in time. First, the 2000 dot.com implosion. We were incorporated a year later on April 1, 2001. I remember someone telling me I should look at the crash as a good thing, for if we weathered the tough fundraising environment, we would be in good shape when things improved. Second, September 11. We were scheduled to move into our offices near Ground Zero on that day. That proximity reaffirmed our feeling that it was the moment to reach out to the world and precipitated our work – and growing relationship – with Pakistan, a country whose people I have grown to love and admire and whose geopolitical importance in the world I have come to understand.

When you start an organization, you have a roadmap for the world. Inevitably, the world changes – and just as with a child, the organization’s personality and way of being in the world change too, becoming a mix of its original DNA and the external environment.

I don’t think we could have imagined how much the world would change after 9-11. The 1990s, especially in the U.S., was such a freewheeling, optimistic, narcissistic era, when at least some people thought the good times could and maybe even would last forever. When I was first looking for funds in the start-up year, many people would answer that they were not interested in giving globally. We had our own problems to clean up, they would say, so why put money down rat holes in foreign lands when everyone knew aid didn’t work? Then the Twin Towers fell – and everything changed. (more…)

Congratulations to our investee Scojo Foundation, which features in an article published in The Financial Express (part of the Indian Express group) on Hindustan Lever Ltd (HLL) and ITC Ltd’s rural business initiatives. Sadly, Scojo has been misspelled as Skojo - but it is thrilling to see Scojo Foundation highlighted as part of the effort to bring - and market - affordable products to underserved markets.

We are delighted that Acumen Fund investee Drishtee has been named one of Red Herring’s “100 Hottest Startups in Asia.” In Drishtee CEO Satyan Mishra’s words, “this award augurs well for the scalable growth of ‘Technology for Development’ in India and in all other developing economies. ” We would like to congratulate Satyan and everyone who has worked so hard with him to help Drishtee grow and strengthen its operations.  The company is a powerful example of what is possible by combining strong heads and soft hearts, the commercial and the social, and we couldn’t be prouder to be working with the Drishtee team.