As I walked into Desmond Tutu Center in New York on Thursday night, I wasn’t quite sure what to expect from the social networking event hosted by Good Capital. Good Capital is an investment fund aiming to accelerate the flows of capital to social enterprises, and they successfully convened an incredible group of colleagues, investors, and friends.

Just to give you a sense of the event, my first conversation was with two women from Scojo Foundation, an Acumen Fund investee that reduces poverty and generates opportunity through the sale of affordable reading glasses. I then had the pleasure of talking with Tim Freundlich, a partner at Good Capital, who - among other things - told me of the upcoming conference they are hosting in San Francisco in October. This was followed by a conversation on community building with Jed Emerson, one of the leading thinkers on Blended Value and also an Acumen Fund and Good Capital Advisor.

I finished up the evening discussing the growing spectrum of capital with two fellow Michigan Alumni, Josh Cohen of City Light Capital, a money management and business development firm that focuses on the security, media and energy sectors, and Michael Baratoff of Equilibrium Capital, a growth equity fund focused on sustainability.

As I walked out of the event into the breathtaking and serene courtyard of the seminary behind the Tutu Center I realized that we are no longer a few disparate mavericks but instead an interconnected community leading a movement that can demonstrate the power of the market as a tool for sustainable and innovative solutions to social problems.

Pangea Day is an international event that will bring the world together through film.

In a world where people are often divided by borders, difference, and conflict, it’s easy to lose sight of what we all have in common. Pangea Day seeks to overcome that - to help people see themselves in others - through the power of film. (Watch Pangea Day organizer Jehane Noujaim’s TED Talk about the concept; Noujaim is a 2006 TED Prize winner.)

Live events in Cairo, Kigali, London, Los Angeles, Mumbai and Rio de Janeiro will be linked for a program of powerful films, live music, and visionary speakers including Queen Noor of Jordan, CNN’s Christiane Amanpour, musician/activist Bob Geldof, and Iranian rock phenom Hypernova. Pangea Day is a live broadcast - in seven languages - featuring powerful films, visionary speakers and inspiring music that will reach millions of people worldwide through public and private gathering places and through the Internet, television, digital cinemas and mobile phones.

Join members of the Acumen Fund team at The Paley Center for Media – a great venue for Pangea Day. Starting on Saturday, May 10 from 2:00 to 6:00 pm, the entire Pangea Day will be broadcast live. Don’t miss this opportunity to gather together locally and connect with the international community (through media) globally.

The Paley Center for Media is located on 52nd Street between 6th and 5th Avenue. Pangea Day is a free event - typical admission charges to the Paley Center do not apply, just remember to mention ‘Friends of Pangea Day’ when you arrive. We hope to see you there on Saturday! And if you’re not based in New York (or if you won’t be here on Saturday), please be sure to check out the Pangea Day web site, where information on thousands of venues can be found with just a few clicks.

This past Tuesday in New York, Acumen Fund hosted a breakfast featuring Aun Rahman, our Pakistan Country Director and longtime Acumen Fund employee. The event began with Omer Imtiazuddin – Acumen’s health portfolio manager – introducing Aun. Before joining Acumen Fund, Aun worked for five years in economic and strategy consulting at Charles River Associates in Boston, specializing in financial modeling and quantitative analysis. Aun joined Acumen in 2003 as a Fellow, working for 18 months our investee, Saiban, to structure and incubate an affordable commercial housing project in Lahore and to develop the organization’s management information systems.

In 2005, he became Acumen Fund’s Country Manager in Pakistan. Originally from Karachi, Aun came to the United States to attend the University of Chicago, where he earned a BA in Economics. At the conclusion of his introduction, Omer remarked how he and Aun actually went to school together (in grade six) but only realized their shared history upon joining Acumen Fund. It is indeed a small world.

Aun began his talk by giving a demographic overview of Pakistan. Seventy percent of Pakistanis earn less than $2/day; fifty percent of the urban population lives in slums; seventy percent of Pakistanis don’t have access to clean drinking water. Not only that, but recent commodity price increases have put a squeeze on the purchasing power of the poor, exacerbating some of these (older) figures.

After his overview, Aun began the heart of his presentation by talking about Saiban, an incremental housing model targeting the urban slum population. The poor aren’t offered housing options in the current economy – it’s too expensive, on the wrong time schedule, and scarce. To address these issues, Saiban has developed a model based on the informal housing sector. Specifically, Saiban works with people in low-income communities who build their homes over a four or five year period – not a traditional housing or real estate model.

Acumen became involved to help Saiban accelerate and scale up the incremental housing process. When we came in, Aun notes, it was already a holistic business – they weren’t just building homes, but also the infrastructure, and facilitating financing and land purchase as well. Acumen’s assistance came in the form of a $300,000 grant/loan in 2005, as well as the services of Aun (Fellow, 2004) and Jawad (Fellow, 2007) working directly with Saiban’s team.

As far as impact, Aun displayed a slide noting that there are 22,000 residents living in 2 communities built by Saiban. There are schools, mosques, stores as well as a range of utility services (water, electricity, sanitation, etc.). Finally, and perhaps most interestingly, there’s a formal mortgage financing scheme for the poor – a first in Pakistan.
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I have had the privilege of interning with Helen Ng, Acumen Fund’s Housing Portfolio Manager, for the past couple of months, and I wanted to share some perspectives with you. I hail from the private sector and am currently a business school student at Columbia here in New York City. It’s been a fantastic ride here at Acumen Fund, and an eye-opening one at that.

One thing that I learned quickly was that Acumen Fund truly embraces the importance of addressing problems faced by the BoP with a business mentality. When we look at potential deals, the first litmus test is always: “is this an economically-viable business model?” With several ex-Wall Street-ers at Acumen, concepts such as cash flow and ROI invariably work their way into discussions about potential and current investments. And for the strategy buffs out there, frameworks such as Porters Five Forces are tools that are helpful in vetting triple-bottom line businesses as well!

This type of analytical rigor is part and parcel of a disciplined portfolio evaluation process. I sat in on a portfolio review session recently, and was blown away by the team’s in-depth, holistic approach to evaluating portfolio investments. Not only were topics such as management quality and barriers to entry discussed (areas that any VC would lay awake at night thinking about), but an investment’s ability to generate knowledge for the BoP development space is valued highly as well. And that’s what I appreciate so much about my Acumen experience. The billions of poor who subsist on less than $4 a day are treated as partners and shareholders. All major decisions are made with the BoP in mind.

Outside of Acumen, I am busy finishing up my first year at Columbia Business School. Students are incredibly in tune with new development models, as pioneered by visionaries such as Acumen. In fact, students recently launched Microlumbia, the first microfinance fund of its type initiated by any business school program. The fund will make its first investment in the near future, so stay tuned for more.

Dorah’s Senye Clinic in Kibera has a new addition today: A small refrigerator that allows her to add immunizations to her list of services.

“I’ve always had to send customers to immunize their children elsewhere,” Dorah describes. “No smart business-person sends customers away.”

With limited resources, Dorah has to work extra hard to meet customer demands. But she continues to find innovative ways to meet her customers needs. And they respond … Dorah is one of the most successful franchisees in the network.

I arrive to Senye today just in time to see Grace bring her 2 month old son to the clinic. Grace could take Trevor down the road for free immunizations, but chooses to pay the small fee at Senye because: 1) Dorah met her demand and 2) Dorah provides unmatched customer service. Despite 12 hour days and a long commute, Dorah treats her customers with dignity, personal attention, and quality care.

Even in a resource-constrained environment, basic business principles remain true: Meeting customer demand and providing quality service means happier and more loyal customers. Grace & Trevor will be back in a month for their next check up.

(This post first appeared on the Acumen Fund Fellows’ blog, Immersion)

Yesterday in New York, I had the pleasure of attending a round table organized by the Council on Foreign Relations entitled The Commercialization of Microfinance: The Good, The Bad and The Ugly. Moderated by CFR Senior Fellow Isobel Coleman, the discussion featured comments from Mary Ellen Iskenderian (of Women’s World Banking) and Roshaneh Zafar (of the Kashf Foundation.)

I arrived early, set up my laptop and grabbed a bite to eat (if you’re curious, the CFR building is beautiful and they do a good lunch spread). Before I was through my sandwich, the room had filled to capacity and CFR staffers were scrambling to set up overflow seating – there’s clearly a lot of interest in the recent controversy surrounding microfinance. It was quickly apparent that women outnumbered men in the audience by a ratio of about 2:1 – interesting, though not completely unexpected given the importance of women in microfinance and the fact that the speakers and moderator are all women.

Coleman kicked off the session with brief introductions and quickly segued into the topic at hand – the good, bad and ugly of microfinance. She stated – without dissent – that microfinance now finds itself at an inflection point. On the one hand, there have been calls for microfinance not to profit off the backs of the poor, notably in the New York Times’ coverage of Compartamos’ IPO. On the other hand, those who know microfinance realize that it can’t scale – from 100 million clients today to its potential market of 4 billion – without the capital markets, and the formality capital markets require.

I thought Coleman did a good job setting the stage here. From my perspective as a quasi-insider, there wasn’t much new – but it is important to say nonetheless. Microfinance can and will go one of two directions, and it’s pretty clear that there are strong arguments being made by advocates on either side.

Mary Ellen Iskenderian was next to speak. She is President and CEO of Women’s World Banking (WWB), the world’s largest network of microfinance institutions and banks. Iskenderian leads the WWB global team, based in New York, providing hands-on technical services and strategic support to more than 50 top-performing microfinance institutions and banks around the world. Iskenderian told us that WWB’s network MFIs have a total portfolio value of $1.4 billion and an average loan size of just $500. Those MFIs serve roughly 9 million clients and there are another 14 million clients served through WWB affiliate banks. Of WWB’s 23 million clients, approximately 70 percent are women.

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What’s big, red and innovative all over? No, it’s not Clifford’s supremely creative cousin – it’s Entrepreneurship@Cornell. A university-wide initiative, Entrepreneurship@Cornell is unique in bringing together students, faculty, alumni and outside experts across a range of sectors (hospitality, biotech, real estate, venture capital, law and more were all represented at the event I attended last week). Other universities could learn from Cornell’s approach – a truly multidisciplinary program is hard to find in academia, so kudos to the Big Red for getting this one right.

I went to Ithaca last Thursday and Friday to participate in Entrepreneurship@Cornell’s annual celebration. The 2 day event featured a gala dinner, entrepreneur expo and – of course – panel sessions. Thankfully, the panel session in which I participated was well organized and expertly moderated. (No coincidence here: the organizers – Steve Wang and Sara Standish – are Johnson School students and the moderator was Mark Milstein, a heavy hitter in the BoP space.)

I thought Sara and Steve did a particularly good job finding representatives from distinct stages of the BoP continuum. First to speak was Fernando Lima, founder of Florestas and a New Ventures entrepreneur. Fernando holds a Ph.D. in economics from the University of Barcelona and has worked for many years in finance – but his passion is personal care products. Specifically, Fernando is all about certified-organic products whose ingredients are sourced from Brazilian cooperatives. Florestas’ new line – Ikove – just attained nationwide distribution through Whole Foods, which is the holy grail for any start-up company in the organics sector.

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Last week, Jacqueline and I attended the Global Philanthropy Forum, a three day conference convening donors, social entrepreneurs, political leaders, academics and activists to discuss problems and solutions in the areas of global security, human rights, violent conflict, resource scarcity and health.

Bishop Desmond Tutu gave an inspiring and wide-ranging talk at the opening plenary, notwithstanding a bad case of the flu. He spoke of the recent violence in Kenya and the vulnerability of any country to a similar situation when colonial structures persist, leaving one group as top dog. He spoke of his hope that Zimbabwe will come through its current difficult period and that Robert Mugabe will step down or otherwise leave office. Even so, Tutu warned, there is a long road for recovery ahead and one key element of that recovery will be a framework or platform for people to “say what happened” (as happened in South Africa with the Truth and Reconciliation Commission).

He also expressed a wish I heard several times throughout the Forum, a wish that more women should be at the table, as heads of government, the military and in major policymaking bodies. Tutu asserted that the “attributes of women” would bring more balance to the debate and to decisions like whether to go to war. As he put it, “I cannot imagine a woman who nurtures a child in her womb for nine months and then rears that child going on to let him be turned into cannon fodder.”

The Forum alternated between plenary sessions and smaller workshops and panels, some of which were very timely and relevant to Acumen’s work (Hunger, Agriculture and Inequality; Fragile Successes in Rwanda and Uganda; Predictable Surprises: Pakistan and Afghanistan; Maternal Health and Childcare). In the plenary session entitled “Entrepreneurship and Social Change,” we heard Fazle Abed (BRAC) and Larry Brilliant (Google.org) talked about the “missing middle” - the space between micro-finance and traditional investing - which is the next place (i.e., beyond microfinance) to move the needle on poverty alleviation through a business approach. Abed and Brilliant cited Acumen Fund as a good and established example of this approach. Mr. Abed hastened to add to that while the microfinance business model was mature, the need for more microfinance facilities was far from fully met. Both panelists said that women were often the “better bet” as entrepreneurs, social or otherwise.

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“Great” is often thought of as better than “good.” Not in this case. What I mean to say is that GOOD is great; GOOD Magazine, that is. We at Acumen Fund are happy to congratulate longtime ally Jonathan Greenblatt on his new job: CEO of GOOD Magazine, another Acumen Fund ally.

We’ve worked with Jonathan through WorldChanging, the Global Entrepreneurship XPrize, and Ethos Water - which he co-founded, sold to Starbucks and helped scale. (As of today, Ethos has raised over $6.2 million dollars towards clean water projects in the developing world.)  We are thrilled to know that we can continue working with him now that he’s at GOOD.

And just a reminder, when you subscribe to GOOD, your subscription fee is donated to Acumen Fund. GOOD magazine, good cause!

I just returned from an energizing trip to the University of Virginia, which is both Jacqueline’s and my alma mater. At UVA, I taught two classes in the business school’s newly developed Integrated Core Experience (ICE) program - one on Acumen Fund and the other on Social Venture Capital. The students - all undergraduates - were an engaged and inquisitive group. Throughout the 7-week course, the students are exploring different ways to approach global poverty, ranging from a charity-based model to a market-based approach.

There were two really exciting things about this trip. First, I continue to be energized by the way top universities are integrating the field of social entrepreneurship into their core curriculum. This is really an essential piece of what we are doing in our knowledge pillar, in terms of sharing our best practices and institutionalizing what we’re learning.

Second, I was amazed by the students‘ passion and curiosity as well as that of the professors. They are really working to understand the unique business models, challenges, and insights of our work. There is momentum here that brings to life the entrepreneurial spirit in so many. At Acumen, we are thinking hard about the best ways to harness the energy of students and young professionals. We would love to hear your thoughts, so please respond to this blog posting with ideas and suggestions!

Last night, Acumen Fund hosted the Muslim Finance Professionals Association of New York for an event entitled “NY MFPA and Acumen Fund evening.” (Suggestions for better event titles are welcome.)  More than 40 people gathered over snacks and drinks to hear Omer Imtiazuddin and Adrien Couton, Acumen’s health and water portfolio managers, describe our social investment fund business model and methodology.

Spirited Q&A followed Omer’s and Adrien’s remarks, ranging from questions on Acumen’s rate of return to how we define and measure social impact.  Particularly interesting were repeated calls for those in the room to use their extensive networks – the Indian and Pakistani diasporas, local finance professional associations and university alumni networks – to spread the word about Acumen.

Thank you to the Muslim Finance Professionals Association – and in particular Malik Sarwar and Dalia Mahmoud – for organizing last night’s event.  We are truly humbled by the sight of a room full of people – all of whom are taking time away from their hectic professional and social lives – gathered to learn more about business models serving the BoP.

Today, April 1, marks Acumen Fund’s seventh birthday. Seven years; the so-called age of reason, a time for making the move from fledgling organization to an institution - with a robust heart and mind, legs growing stronger all the time and still abounding with energy. Reflecting today, I’m amazed at how quickly time has passed, how much has changed, how much has been accomplished, how we’re just getting started.

Seven years ago, we set out to build an institution that would help change philanthropy, build more focus and accountability into solving big problems, and use the market as a guide to listening to poor people as customers and not as passive recipients of charity. We were a team of four with no road map. I remember our first COO, Dan Toole (now an Advisory Board member), saying it felt like we were on the 20th story, building a terrace beneath our feet, brick by brick with no safety net below.

We were experimenting with new language (”investors, never donors!”) and new ways of doing things. We found twenty extraordinary individuals willing to support our new idea that most people didn’t fully understand and some thought was outright crazy or just plain wrong. And Acumen Fund was off, letting the work teach us, making mistakes and learning from them, gaining momentum with each step.
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