Acumen Fund recently partnered with an amazing team at @radical.media to produce a short video that premiered at our annual Gala Celebration on November 11, 2008. It is narrated by Acumen Fund CEO Jacqueline Novogratz, and combines still photographs and footage from the field taken mostly by staff members and former Fellows, with several photos by Magnum Photographer and Acumen Fund advisor, Susan Meiselas. The result is polished and professional, and offers a glimpse at the world Acumen Fund is trying to create and the inspiring change we are beginning to see.

We hope you'll take a moment to watch the video, let us know what you think, and if you like it, please share it with your friends or colleagues. As exciting as it is to see some of these videos go viral (See Seth Godin's talk on Influencing the Masses from November's Investor Gathering which has received over 13,000 views in just a few weeks since posting!), we also recognize that there's enormous value in using this content in a live setting to introduce Acumen Fund to audiences and to help set the context for subsequent discussions. So far, the video we produced with @radical.media has only received a couple hundred views online, but since its creation, has been played at over a dozen live events to audiences totaling over 1,500 people.

In measuring impact, we will continue to look at metrics from both online and offline environments and will work closely with our Advisors and Partners on designing thoughtful marketing and distribution plans for this content.

In this coming year we will look at more partnership opportunities with filmmakers and production companies like @radical.media, to help add to our growing library of film and video content with the goal of telling real stories of ordinary people doing extraordinary things and sharing messages of hope, innovation, and dignity that capture the imagination of tens, if not hundreds, of thousands of minds around the globe.

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In addition to other videos we'll mention in this post, be sure to check out Tony Award-winning actress Sarah Jones' incredible multi-character performance from our 2008 Gala Celebration (Part 1 and 2), and Acumen Fund Fellow Karthik Janakiraman's latest video, The New Face of Farming?, which takes a look at how GEWP's drip irrigation technology is impacting the lives of smallholder farmers in India.

We hope that you will subscribe to the channel, rate and comment on the videos, and provide us with candid feedback. The channel is a work in progress and it's ultimately for you, so please let us know what you think!

So, why video, and what have we been doing to get here? It started in the Fall of 2007, when our newest class of Fellows, armed to the hilt with camcorders, did two days of intensive training on capturing and editing video. Chock full of Oscar-worthy ideas, the Fellows (link to 2008 Fellows class) took to their assignments in India, Pakistan, and Kenya with infinite zeal, great promise, and intentions of making-good on their Errol Morris ambitions. Fast-forward 10 months to their return to New York in September 2008, and to make a long story short, we learned a thing or two:

1. If you're going to invest in video, you'd better invest in the right technology to support it. While the video cameras provided our Fellows were quite nice, the laptops we equipped them with left much to be desired. Frequent reports of software and computers crashing led to some pretty frustrating moments bringing to mind this cathartic scene from Office Space which I've personally fantasized about many times over the years.

2. The assignment has to match the expectations, and the expectations have to match reality. Our Fellows weren't asked to shoot and edit video on an ongoing basis throughout the year, so imagine the difficulties we faced when the topic of video was broached again 8-9 months post-training. As talented, capable, and determined as our Fellows are, having them produce one video as a year-end deliverable was a tall order given that many of them were working 12 hour days, 6-7 days a week, and had several equally important year-end deliverables they were juggling simultaneously.

Despite these challenges - and a fair amount of blood, sweat, and tears - the Class of 2008 Fellows were able to produce some fantastic content, proving that video can and should continue to play a central role in how we share knowledge and stories of individuals and organizations that are changing the face of poverty.

Catherine Casey spent a year working at the Sustainable Healthcare Foundation (SHF) in Kenya and produced this inspiring portrait of Dorah Nyanjah, a nurse, healthcare provider, and entrepreneur who runs one of SHF's most successful franchise clinics in Kibera, one of the poorest slums in Nairobi. Last January, during the post-election riots that erupted in Kenya, Dorah's customers formed a human fence around the storefront of her clinic to protect it from looters. Spend three minutes listening to Dorah describe her work and then try to tell me dignity is lost on the poor.

Chris Walker spent his year helping Dial 1298 for Ambulance, a provider of emergency medical services in Mumbai, India, develop and implement a marketing strategy. In this video, he shares just one exciting example of a potential blowback innovation that the company is experimenting with: solar energy to power the onboard equipment of its ambulances.

Enlightened by both the successes and lessons we learned in video from last year's class, we've decided to experiment with a new format for our current class of Fellows. Each month, the Fellows have been asked to post a short video blog. The goal of the video blog is to share a short story, observation, or Aha! moment - either personal or professional - from the previous month.

Many of these take the form of video diaries where the Fellows simply "speak to camera" in the comfort of their homes. This approach requires a smaller commitment of time and energy and also allows the Fellows to develop their storytelling skills while finding their own unique voice. To date, most of the Fellows have already completed their first two video blogs.

What's thrilling is that some have gone above and beyond the call of duty and have produced videos that include interviews of entrepreneurs and customers in the field and combine some more complex editing techniques that they've learned mostly on their own. Follow what the Fellows are seeing, experiencing, and learning on their blog and their YouTube playlist.

We continue to receive invaluable feedback from the Fellows on what's working and what's not. But, the early results are promising, and we look forward to seeing where their discoveries and creativity take them in future months.

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According to the guide:

In mature markets such as in the US and Europe, SMEs benefit from an inflow of capital from venture capitalists, private investors and banks. However, investments in SMEs in Colombia are limited by a lack of information and thus a high perception of risk. “Investing in Small and Medium Sized Enterprises in Colombia” aims to address this knowledge gap, by providing all the information necessary to plan, manage and exit from an investment in an SME in Colombia. It is a practical guide and contains interviews with US, European and Colombian based funds, banks and experts on SME finance on how to approach an investment between USD 50,000 to USD 2 million in a Colombian SME.

Check it out: BiD Country Guide Series - Investing in Small and Medium Sized Enterprises in Colombia 2009.

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Two weeks ago, I joined a group that included Aun Rahman, Acumen Fund Pakistan Country Director, Dr. Sono Khangarani and Saqib Khan, respectively the CEO and COO of Acumen Fund investee Micro Drip to visit Hyderabad in the Sindh region of Pakistan. Micro Drip sells drip irrigation systems to smallholder farmers in Pakistan (check out the company’s web site as well). My colleague Sasha Dichter took a similar trip earlier this year to a different part of Pakistan (Thar), and reflected on What It Means to be Patient: Drip Irrigation in Pakistan’s Thar Desert.

It was the Sunday before a 3-day Eid celebration, and the traffic leaving Karachi was noticeable, even to me (a Karachi novice). Then again, I couldn’t complain. Even the traffic in Pakistan is colorful, what with intricate designs adorning all manner of transport from the smallest rickshaws to buses and large-haul trucks.

But today, the color came not just from trucks, but from our non-human counterparts sitting in traffic. As part of the Eid celebration, families sacrifice an animal to share; as such, many vehicles were transporting goats and cows bound for slaughter; even camels played their part, pulling families along the highway. Later that evening, on our way home, I saw one guy in a rickshaw, his knees up to his chin as his feet rested on two goats, stacked atop one another on the floor of the rickshaw, much like one might stack up suitcases for a long family road trip.

I was eager for the road trip. It was a chance to get out of Karachi, where the inability to simply walk around freely must surely become stifling; it was also a chance to see more of Pakistan’s countryside. The day was facilitated very effectively by National Rural Support Program (NRSP). NRSP is (in Aun’s words) the ‘big brother’ of TharDeep Rural Development Program – the parent organization of Micro Drip – and has been providing agri-specific support to farmers for over 20 years.

In the past few years, NRSP has been offering micro-lending options in addition to agri-services, and the villages we met - like these farmers, pictured at left - with have organized around these micro-loans. The farmers that we met were not users of drip irrigation; in fact, the difficult task of selling drip systems to farmers was a key outcome of the meetings for me.

Many of these farmers have taken on loans between Rs10,000 and Rs30,000, and what we heard from them is that while these loans help them to operate without total dependence on a middle man – ‘Arti’ in Urdu – they barely cover the cost of inputs, let alone any of the other household costs the farmers incur on a daily basis.

Our objective for the day was simple: to listen to farmers. We wanted to hear directly their key concerns, constraints and cost burdens in order to gain a deeper understanding of where drip irrigation might play a role in increasing farm productivity. From a broader perspective, we were also interested in what we should be thinking about as Acumen Fund moves forward with our new agriculture portfolio. I can’t help thinking that my modest report is going to be complimented by a deeper and more colorful analysis in Jacqueline’s journal, so I’ll stick to facts and basics and attempt to relay the key insights we heard from these farmers.

The farmers are incredibly wise. Any solution that Micro Drip – or any other enterprise looking to solve the problems of smallholder ‘productivity’ – puts forward must be designed via an ongoing process of endless discussion with farmers. They know that drip irrigation needs a constant water supply; today, they are lucky to have access to flood irrigation from the canals once a week. Naturally, farmers are skeptical of drip’s impact.

They know that they are lucky to get 3 hours of electricity a day with which to pump the water from their wells, and even that they pay the landlord for – and it’s still cheaper than diesel. ‘Loadshedding’ has become such a common phenomenon throughout the rural areas that, despite the fact that they were speaking to us in their local Sindhi, the English word was common to all.

These farmers are keenly aware that, in 2008 alone, the price of inputs such as fertilizer has risen from Rs500 to Rs1300 on the black market despite the standard rate being Rs600. Their market access is limited to the back market through their historical relationships with Artis (middle men) leading them to hoard fertilizer, which in turn drives the price up more.

They know that even if their yields do increase, it’s often difficult to find a market for their product. This was confirmed in one village where we saw vast piles of cotton (pictured at left), brown and wasting because there was no one to buy, no where to sell. And finally, they know that the loans allow them to cover the costs of these inputs, but do not allow them to break the cycle of debt that the landlords and the Artis further entrench. If only the loans were larger, and the definition on ‘productivity’ broadened even a little, then they might be able to diversify their income sources, break their dependence on a crop that might easily be devastated by a flood or other natural disaster. A larger loan would allow them to buy new clothes, educate their children, pay for healthcare and truly improve their standard of living.

Dr. Sono knows the right questions to ask. He is in his element and it’s an honor to see him in action; he’s the only one of us who can speak directly to the farmers in Sindhi. The questions he asks all three villages get the same unanimous replies: 1) Do you think the cost of inputs is going to come down any time soon, if at all? No is the clear answer. 2) Do you think water will get any easier to get a hold of? Again, no is the immediate consensus. 3) What do you think is the best way to deal with these issues and allow you to become more productive? That, the farmers say, is the billion rupee question!

Dr. Sono discusses drip as an option, although he admits that without solving the bigger infrastructure question that would provide a more reliable water supply, it may not be the best solution for these farmers just yet.

One can’t help but be struck by the deepening and systemic tragedies Pakistan has fought throughout 2008: the continued lack of true leadership and the IMF intervention whose impact raises many more questions on the horizon. There are undoubtedly equally tough times are ahead here. But taking the time to listen to these farmers, to see Dr. Sono’s quiet manner of marketing with truth, and the deep seated commitment of the Acumen Fund Pakistan team (who are all complete rock stars) as well as the commitment I’ve witnessed this week from Jacqueline, Aun, Hunter Boll and Stuart Davidson, I feel a warming sense of hope that by partnering with and learning from local entrepreneurs like Dr. Sono, we might just gain the insights and the humility to give more farmers what they really need: the ability to determine their own definition of productivity and the dignity of providing for themselves.

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Full details are available on the Work with Acumen page, including a PDF job description.

The Agriculture Portfolio Associate/Manager will, among other things, coordinate activities related to agriculture in East Africa and the development of our investments in the sector in Uganda, Kenya, Tanzania. S/he will also be expected to play a significant role globally, helping to build agricultural expertise in the organization. Based on qualifications and experience, the position will be created as an Associate or a Manager position.

Specific responsibilities include:
- Identify new investments, carry out due diligence and investment activities on potential investments, with a strong focus on the water sector;
- Prepare, present and maintain detailed investment documentation for Acumen Fund Senior Management, Acumen’s Investment Committee, and the Acumen Fund Board of Directors;
- Help manage relationships with upcoming agriculture investments in the region;
- Provide management support to agriculture investees.

If you or someone you know is interested in the position, please visit the site to learn more.

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In the article, Gary - who has been a Partner since 2006 - talks about his transition from financial-services law into volunteering. With Acumen Fund, Gary has been a Fellows mentor and a valuable adviser to many other staff members. We really value his commitment to Acumen Fund and are thrilled to see his story put forth as an example of how one can give back in ways that transcend the traditional donor/charity paradigm.

And while I for one am not ready for life after BlackBerry, I’m sure there are many - whether its retiring the iPhone, BlackBerry, or plain old cell phone - who can learn from Gary’s example.

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In the last few weeks alone, there has been some great press coverage. In case you’re not monitoring Google News for every mention of Acumen Fund (and if you are, well, I guess we love you even more!), here are a few highlights:

Power to the People, Financial Times: FT’s Sarah Murray explores how companies, multilateral institutions and development groups are working to deliver power to the world’s poorest communities - including Acumen Fund.

Thinking Big — and Small, Forbes: Ellen Grasso from Forbes’ Executive Woman series profiles Acumen Fund CEO Jacqueline Novogratz.

Social Enterprise Honor Roll, Fast Company: Anne C. Lee at FC looks at our portfolio metrics tracking system, re-named Pulse (as in taking the pulse of an investment to get an idea of its health).

Let’s Share, Stanford Social Innovation Review: Jennifer Roberts at SSIR (one of my favorite, journals) also profiles the Pulse system (formerly known as Portfolio Data Management System or PDMS) in its What’s Next section.

Business Defeats Poverty, New York Times: Nicholas Kristof’s On the Ground blog takes on the idea that business can defeat poverty; Kristof suggests he’s going to focus more on this idea in 2009.

Let’s hope Kristof - and these other fine journalists - continue the trend in 2009. But the burden is also on us at Acumen Fund and our friends in the same space (members of ANDE, for example) to keep pushing the envelope and generating results that merit press coverage.

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The conversation began with investees discussing shared challenges and the solutions/innovations they’re bringing to market. There was a powerful energy and momentum at the table, with each entrepreneur doing what they do best: seeking opportunity. Ideas and connections were fast and frequent: selling nutritional porridge at public toilets, liking micro-health insurance schemes to low-cost health care providers, using microfinance institutions to help organize farmers for pharmaceutical production…you get the idea.

It was exciting to watch these entrepreneurs use a simple platform to connect, share and explore collaborative opportunities. There was a clear hunger for such a forum on behalf of the investees, and when we had to call the event to a close, several members asked to make such meetings a regular occurrence.

There are lessons being learned every day in each of these ventures and there are real opportunities to for investees to work together in serving the base of the pyramid. Over the coming year, the Acumen Fund East Africa office looks forward to facilitating more of these conversations and learning from the commonalities, differences, and connections between this inspiring group of entrepreneurs.

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In any case, back to the breakfast. Pratyush’s talk – and the subsequent discussion – left me with three key takeaways and an important reminder:

Takeaway 1: Building a successful business serving the low-income market requires listening to the poor and building a product or service based on the specific needs and constraints of those living at the base of the pyramid.

GEWP – and its parent company, International Development Enterprises - India (IDE-I) – sell four types of irrigation systems. The systems vary in cost and depend on the specific preferences of the farmer. Not only does this enhance affordability, but the modular system design allows the farmer to add acreage incrementally as they generate profits from increased production. For example, a typical GEWP customer starts by irrigating one crop; after a successful season, he’ll add acreage and drip-irrigate another two or three.

Takeaway 2: In order to scale, GEWP must recognize market opportunity while strengthening its in-house capabilities.

While the need for drip irrigation in India is acute, GEWP’s business there is relatively seasonal (in the monsoon season, sales drop significantly). Understanding this aspect of his business and global demand for drip irrigation, Pratyush developed an international distribution strategy that sells drip irrigation in nine countries in Africa and seven additional countries in Asia. GEWP has also ramped up its in-house manufacturing capabilities in order to lower the costs associated with purchasing the irrigation systems externally.

Takeaway 3: Successfully marketing to low-income farmers is about tapping into the current infrastructure of local non-governmental organizations and other embedded actors who have earned the farmers’ trust.

GEWP’s success is largely due to the 20-year track record and network built by IDE-India. These lessons can be applied globally. For instance, Acumen Fund recently invested in a new, for-profit company in Sindh, Pakistan called Micro Drip. Much as GEWP is associated with IDE-I, Micro Drip is tied up with the Thardeep Rural Development Program (TRDP), a 16-year old agricultural services non-profit with a long-established network of smallholder farmers for whom drip irrigation technology can have enormous benefits.

Three key takeaways: listen, understand the market and leverage trusted partners. In addition to these three key lessons – which, if you look at them, seem to be relevant to all sectors, not just drip irrigation – there was an important closing aside.

As the breakfast came to a close, Acumen Fund’s India Business Manager, Biju Mohandas, gave us an important reminder. Biju, on his last day in the New York office prior to returning to India, asked us to remember that while most Americans think a typical Indian is the man working at a call center or at an IT firm, almost 70% of the country’s population are farmers. And at the end of the day, India’s sustained growth is dependent of the success of its farmers – and those farmers’ success might depend on the growth of innovative enterprises like GEWP.

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I’ve been studying, working with and thinking about leadership development for the last seven years, but I never stop being surprised. This past summer, I led an idea session for the Center for Creative Leadership to brainstorm how leadership development could be applied in the context of poverty.

But in this group of East Africans, West Africans, and North Americans, we could barely agree on semantics-leadership for the base of the pyramid, bottom of the pyramid, leadership for the majority, leadership for all…etc. However, no matter what we called it, we all could agree that not only did the poor have little access to leadership development tools, but the research and resources at hand had limited relevance to someone living in poverty.

That is not to say that there aren’t leaders. I have had the honor of meeting leaders born into poverty and raised through adversity who demonstrate true leadership irrespective of socio-economic status.

Living in Ethiopia, I met Solomon (above, left), a young man who lost three of his limbs when the Addis-Djibouti railway overturned on route to Dire Dawa, Ethiopia’s second city. Solomon ended up in one of Mother Theresa’s clinics and tried a variety of prosthetic options, none of them feasible for the life he would lead in Ethiopia.

So he decided to pack it up and return home. Solomon wanted to start his own business, and I worked with him over a period of months to figure out how he could make it happen. Solomon left his old community, where people saw him as half the man he once was, and established one of the most successful video rental shops in his new neighborhood. His business has grown quickly because Solomon has impressed and befriended those around him, and he’s not done yet. He’s sending home money to his mother, employing boys from the street and he dreams of opening a proper internet café.

After such a devastating accident, many in Ethiopia take to the streets as beggars-either by choice or by force-but Solomon chose a different path. His optimism, courage, and work ethic helped him found his shop and attract a growing number of customers each day.

For me, leadership is about unlocking human potential. In my work with the Cherokee Gives Back Foundation and the Acumen Fund, I have struggled to find entrepreneur-leaders and provide them with the financial support needed to succeed and alleviate poverty through market-oriented solutions. But finance is only part of the picture. I have participated in two Leadership Essential programs, designed by the Center for Creative Leadership’s Leadership Beyond Boundaries initiative, and experienced first-hand the impact of “leadership development for the majority.”

I see immediate potential to introduce these tools to a broader audience in East Africa, but I see an even greater opportunity/challenge: How do we take this concept of leadership development and apply it to the people living in the villages and slums? In East Africa, the “pyramid” looks more like the Eiffel Tower - a needle at the top and large in its foundation. I believe that unlocking doors for this “foundation” will require creativity and a cross-disciplinary effort. But I also believe in the power of leadership development to transform the paradigm. Solomon is one of those extraordinary leaders who succeed, no matter the odds. There are many more out there like Solomon, and with appropriate and accessible leadership development, the impact could be revolutionary.

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Yes, I am biased. I know this year’s class of 10 Fellows reasonably well from their 2-month training in New York (and I’ve known one, Joel, longer than that through our mutual interest in business approaches to poverty alleviation.) Regardless of bias, I feel like there’s a lot of great content over on the Fellows’ blog that we’re not cross-posting here, and I want you to know about it.

Why aren’t we cross-posting everything from the Fellows’ blog? We want the Fellows to have an open forum to post their thoughts, reflections and observations during their 12-month Fellowship, and want to ensure that they aren’t hemmed in by the “official” Acumen Fund blog. Does that mean we’re dishonest or opaque here on the AF blog? Certainly not - at least not with Mariko and me editing here - but we want the Fellows to be able to express their opinions independent of the official Acumen Fund line. For example, you might see the latest marketing pitch for Dial 1298 for Ambulance:

Side note: This is also a good place to encourage you to read Sasha Dichter’s blog, which is related to but not sanctioned by Acumen Fund, as well. (Seriously - Sasha is an incredibly smart, creative and insightful writer, and you’d do yourself a favor to read his stuff.)

It’s hard to choose the best posts from the Fellows’ blog, but a few recent ones were particularly good:
- Premal Desai on Ajmal Amir’s story (Amir was involved in the Mumbai attacks on November 26th; he was the only one captured.)
- Joel Montgomery on spending a day in the streets of New York
- Joanna Harries on marketing 1298’s services (features a great 30-second video clip, shown above) and on 1298’s CEO’s response to the Mumbai attacks.

Happy reading.

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We’re also proud to see our very own Brian Trelstad quoted in the article; he comments on the WaterHealth model’s short- and long-term viability.

Check it out.

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Seth Godin just announced an alternative MBA that he’s personally giving to a small group — application deadline is December 14, program starts January 19th, six months with Seth and a select group of people. It sounds amazing. You should tell amazing people you know about it.

Hats off to Seth for caring only about things that are valuable (as opposed to what’s conventional and expected), and for his being totally willing to put his money where his mouth is in terms of creativity, innovation, and break-all-the rules ideas. I’ve no doubt this will be incredible.

Here’s the full scoop: http://www.squidoo.com/Alternative-MBA.

Want to know a little about your professor-to-be? Check out Seth’s talk, “Influencing the Masses”, which he delivered at last month’s Acumen Fund Investor Gathering.

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On a personal, micro level, there were obvious differences: last year, I attended representing my then-boss, an Acumen Fund advisor; this year, I am an Acumen Fund employee. To be sure, the change in vantage point (from audience member to staff member) accounts for some of the differences I observed between IG 2007 and IG 2008. With a little time and distance, however, I’ve decided that substantive changes – in Acumen Fund’s world and the global community at large – account for the bulk of year to year differences.

From November 2007 to November 2008:
- The global financial system experienced turmoil unlike any in our lifetimes, precipitating massive asset devaluations worldwide;
- Kenya went through a period of post-election violence that it is still working to recover from socially, politically and economically;
- Pakistan struggled to fight terrorism, saw its former president assassinated and watched as its military ruler peacefully ceded power to a democratically-elected government;
- India continued to boom, saw income inequality explode, and experienced its own 9/11 moment when terrorists attacked multiple sites in Mumbai;
- The United States’ housing market meltdown precipitated a global recession; amidst economic turmoil, the country elected a new president.

To be sure, the challenges facing Acumen Fund and our community are arguably as great as they have ever been. Fortunately, and if last year is any indication, it appears that we are prepared to face them head on.

How prepared? Here are some notes from the Investor Gathering, outlining how Acumen Fund has continued to invest in businesses serving low-income customers, and how we plan to ramp up our work again in 2009.

After breakfast – and a state-of-the-state address by Jacqueline Novogratz, which she covers in her autumn update – Brian Trelstad gave the audience a thorough update on Acumen Fund’s portfolio. Acumen now has 33 investments under management, as well as 5 exited investments, meaning we’re beginning to learn more and more about housing, drip irrigation, anti-malarial drugs, LED lights, health clinics, ambulance services, clean drinking water – the list goes on – and that’s Brian’s point.

He argues that we are indeed providing patient capital for impatient people – and growing a social dividend in the process – but he doesn’t shy away from tough questions:
- How should Acumen Fund reach down the income ladder?
- Can we work to scale the companies in our investment portfolio more quickly?
- Where is the market compatible with philanthropy and where isn’t it?
- Can we use the lessons we’re learning to influence policy around energy, food and other major issues?

It’s encouraging to see how Acumen Fund’s portfolio has grown over the past 5 years – from $3.5 million under management to more than $41 million as of early November. What’s more, the work we’ve done in health has led to a new push on nutrition; similarly, our growing water and sanitation portfolio has led to an expanded effort to find investments in agriculture.

Successful investments are great, but Brian argues that, as social investors, we need to be just as rigorous in measuring how these companies impact people’s lives. The financial and social metrics Acumen tracks – quarterly – from all its investments allow him to quote an astonishing figure: the ten top-performing companies in Acumen Fund’s portfolio have impacted more than 36 million lives to date. (For more on what all that means, check out Brian’s article on social impact metrics (PDF) from the Innovations Journal.)

In 2009, Brian foresees more competition from commercial funds and strategic investors interested in the base of the pyramid, but less focused on social impact. Acumen will also likely get pushed by foundations and social entrepreneurs who are creating lots of social impact and but less financial impact. Can we toe this thin line?

Yes we can, Brian argues (drawing laughs from the politically aware crowd). It will take a sharper investment focus, a better understanding of what business models work and what we look for in an entrepreneur. It will require a focus on the poor – which means early-stage conversations with our investees about exactly how their business model serves those making a few dollars a day.

Operationally, this means that 2009 will see Acumen Fund focus more than ever on management support. Brian promises to do a better job of plugging our community into these problems, as we are lucky to have supporters with real-world experience and a willingness to go above and beyond to help.

Ann MacDougall, Acumen Fund’s Chief Administrative Officer and General Counsel – follows Brian. Her talk – a major change from 2007 – is entitled “Staying the Course in Troubled Waters”

We’re looking hard at costs, Ann says, in light of the financial crisis. She tells the crowd that Acumen is pushing for more efficiency, increased use of technology and most importantly, honing our energy, passion, and creativity to do more with less.

Following Ann and Brian are updates from the individual portfolio managers – Energy, Water and Health – explaining some of last year’s investments and what they mean for 2009.

In energy, Acumen Fund is working with one company whose biggest challenge is marketing, distribution and logistics; another uses long-proven technology – their competitive advantage is using that technology to serve the base of the pyramid.

In water, Acumen’s investments in drip irrigation are working with some of the 800 million small holder farmers in the world. Believe it or not, a simple drip irrigation system can help a 5-acre farmer double his income in less than a year – which is the most effective way to keep families together, to stem rural-urban migration and to allow people to make choices about how they feed, clothe, house and educate their children. Powerful.

The health report focuses on nutrition – specifically, in a newly-approved investment that will sell fortified breakfast foods in East Africa. Today, you’ll pay about $0.60 for a standard (non-nutritious) breakfast in Nairobi or Dar es Salaam; the product Acumen Fund’s investing in will retail at around $0.20, and provide a full complement of vitamins and minerals.

Throughout the day, we hear more stories and more updates – from India, Pakistan, East Africa as well as from former Acumen Fund Fellows and the since-departed class of 2009. A panel discussion featured the CEO of Lifespring – a chain of low-cost maternal and child healthcare hospitals that’s growing fast in India – with the backdrop of irresistible baby pictures.

At the end of the day, there were certainly differences between Investor Gathering 2007 and Investor Gathering 2008. Political and economic turmoil can dictate the agenda more than you might otherwise want it to. However, despite all of 2008’s upheaval, the Investor Gathering remained a hopeful, pragmatic assessment of Acumen Fund’s work this year and down the line.

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While watching the TV coverage, I did want to share another feeling of connection, and that was to everyone associated with Acumen-investee Dial 1298 for Ambulance, who have been on the scene and responding to the attacks since they occurred late Wednesday night, as seen in footage on CNN, IBN and other networks.

1298 operates under the ethic of “ambulance service for all.” Per its own policy, it provides free service to all accident and disaster victims - as well as to victims of terrorist attacks. Knowing that a few years ago, the city was so much less equipped to respond to such an emergency underlined the true service that 1298, now with 51 medically-equipped and professionally staffed ambulances, is making to the city where it was founded. We at Acumen Fund feel a great sense of pride, just in seeing how much can be built to change things in a constructive way and in this case, it was due to the hard work of the team at 1298. We thank everyone at the company for the work you do and the ethos of service you hold.

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BRAC, the largest non-profit organization in the developing world, is a dream partner for a small organization. But landing the partnership is only the first part. What happens next is where it gets interesting…VisionSpring’s Franchise Partner Manager Lalit Kumar reports from the field.

By Lalit Kumar

We often joke here at VisionSpring that working with BRAC is like landing a contract with Walmart. It’s the kind of opportunity that every small NGO dreams of – BRAC is known for its massive scale and incredible efficiency. This partnership will allow us to reach a huge new market of people in need in a time frame that would have previously been impossible. Now we just have to deliver!

We’ve been working with BRAC for two years now. For the last six months, we’ve been selling about 500 glasses per month by empowering BRAC’s network of Shashto Shebikas (community health volunteers) to sell our eyeglasses. Now, with our new plan to scale up, we will provide affordable glasses to almost ten million people in Bangladesh over the next three years.

Our biggest challenge by far is managing the inventory that BRAC needs. At the moment, we’re delivering about 30,000 pairs of glasses every four months, but soon we will need to deliver 30,000 every month. We are mainly focused on getting the glasses into Bangladesh, a complicated process involving multiple inspection agencies. A 2006 Doing Business (http://www.doingbusiness.org) report from the World Bank notes that when a Bangladeshi company imports goods, it has to prepare 16 types of documents and obtain 38 signatures, and that the whole process takes 57 days. I can tell from our experience that it hasn’t improve much in the last few years.

For example, we received a Letter of Credit from a bank in Bangladesh that was valid only from April through June. Simply getting it updated meant that we had to get signatures from BRAC’s bank in Bangladesh, VisionSpring’s bank in New York, VisionSpring’s offices in India and New York, and our vendor and inspection agency in China.

We at VisionSpring are working hard to understand the whole process and constantly improve our delivery time. The first order took us more than 9 months to clear customs and make it in to Bangladesh, and the next order took about 6 months. Our goal is to get the process down to 3 months, which we are able to achieve in other developing countries where we work. We are certainly going through a period of adaptation, but it has been a very exciting time and I look forward to making more leaps of improvement.

After business school at the Institute of Rural Management Anand (IRMA), I was surprised to find that the challenges we face are the same as private sector businesses, only we are addressing them in some of the most challenging markets in the world. There is a reason that most private-sector companies haven’t tried to reach rural markets in Bangladesh; the start-up and logistics costs are simply too high. However, if our partnership with BRAC is successful, we will be able to provide affordable glasses and business opportunity to millions of people in Bangladesh. For us, it is well worth the struggle.

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Congratulations, Niko!

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FINCA has a great career track called the Senior Banking Leadership Program, which grooms mid-career professionals to become the chief operating officers of their regional offices.  FINCA also has a fellowship program, which apparently opens on Monday. Forty-five positions are listed on FINCA’s website.

The FINCA representative highlighted the need for strong financial and language skills and international experience.  We have “lots of Wall Street talent now,” she explained, alluding to the new pool of financial expertise that the current economic situation has provided.

Random tidbit: you don’t have to have international experience specifically in the financial access or microfinance industries to get a job at FINCA.  Our speaker landed her position because of her travels as a Dutch Olympic high-diver.

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One message to all:  Create an integrated communications strategy!
CSR messages should be repeated everywhere: annual report, every speech, employee communication, CEO speeches, sales strategy, PR messages, company product branding.  It should be one message – not a series of messages for different stakeholders.

Internet trumps all as most credible communication channel.
Kellie’s research confirms the fact that consumers view website information about CSR as the most credible.  Employee ambassadors are the second most credible source. Magazines, radio, tv etc rank much lower.

We always care first and foremost about what’s happening in our back yard.
No surprise here.  Corporate, sometimes global CSR strategies will be most effective when developed with a localized approach.

There are 7 principles for branding and communicating CSR:

1)    Know thyself
2)    Get a Good Fit
3)    Be Consistent
4)    Simplify
5)    Work from the Inside Out
6)    Know Your Customer
7)    Tell Your Story: stories trump facts 10 times out of 10, period.

To hear more of Kellie’s thoughts on the subject of CSR, pick up a copy of her new book, Just Good Business: The Strategic Guide to Aligning Corporate Responsibility and Brand.

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Jocelyn came to know about IDEO during her Acumen Fellowship while visiting VisionSpring in India.  IDEO was interested in bringing in someone to build out the firm’s social impact work, so she wrote her own job description – knowing nothing about design and having never visited the firm itself – was made an offer, and then started the job.

One of her biggest surprises was that she had to figure out her job once she got there.  She was also surprised to discover a thriving group of social entrepreneurs who were already on board at IDEO.  Jocelyn realizes that the biggest asset in being able to make changes in a company is having a team of like-minded people who share the values of bringing services to the poor.  She started an e-mail list called “social impact at IDEO.” After that, she launched a social impact wiki page where people post resources and social impact projects.  The group then started meeting over Monday lunch hours for strategy meetings and social labs with entrepreneurs in the field.  “Everything is really transparent and open,” said Jocelyn.

During a two-week trip in June to various IDEO offices, Jocelyn put out a call out for people to start social impact initiatives at the local level.  Some have started this, some haven’t.  But, according to Jocelyn, IDEO’s social impact work has been able to withstand the current financial crisis because it is fully integrated into its normal business operations and because social impact services are priced at market rate.

Unlike Jocelyn, Henry Gonzalez of Morgan Stanley only gets to spend 25 percent of his time on social impact work, but his work as a patient advocate enabled him to found and integrate a Microfinance Institutions Group into the firm’s work.

“Your interests could evolve in the firm – whether you are the cheerleader, taking on your issue as an extracurricular project outside of the 9 to 5 p.m., or whether the firm eventually fully integrates a base of the pyramid strategy into everyday efforts,” said Henry.  “The more you can embed your initiative into the current business practice, the more the social impact work is unstoppable.”

The two intrapreneurs agreed on the importance of name affiliation in their ability to create a social impact movement.  If you’re a new social entrepreneur, but don’t have the name backing of Morgan Stanley, SustainAbility or IDEO, you’re not going to get asked to speak at conferences like Net Impact, they said.

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After the opening keynote, I headed to the first session of the day – Scaling Nonprofits.  (Choosing break-out sessions is harder than you might think: the conference guide book provided 140+ pages of descriptions and information about the speakers).

I choose the scaling panel largely because of my interest in panelist William Foster’s philosophy about the need for philanthropies to reward high achieiving nonprofits with growth capital (I wrote a few months ago about William’s thoughts on this topic here.) In addition to Bill Foster, a Partner at Bridgespan, Mora Segal, Chief Strategy Officer at College Summit and Aaron Hurst, founder and CEO of Taproot Foundation also spoke.

The panelists discussed the dynamics of the philanthropic sector, specifically addressing fact that the environment is not conducive to financing the best and brightest nonprofits out there.  Bill pointed out that there are only 144 nonprofits that have reached $50 million in size, and only 10 nonprofits that have raised growth capital funds.

“There is a limit to what philanthropy can do,” said Mora, who mentioned that College Summit just reached the $20 million dollar mark in large part because of a school fee system that covers the organization’s variable costs.  College Summit started a growth capital fund five years ago and successfully raised $15 million in the first six months.

“We need to talk about how we get foundations to stop giving inefficiently,” said Aaron, who likened the multitude of nonprofits with similar missions to the hundreds of Chinese restaurants across New York City. “All the restaurants serve dumplings, lomein”…to be efficient, “they should all be one Panda Express.”

Some may disagree with Aaron’s proposed monopolization of Chinatown, but his point in well taken.  The philanthropic sector could improve the net social impact by rewarding mergers and partnerships between nonprofits with similar competitive advantages who realize they could achieve economies of scale by working together.

Hopefully College Summit and others who are raising growth funds, like VisionSpring, will continue to speak about their ability to overcome some of the barriers to achieving scale posed by the current philanthropy model. It’s still early to tell if the growth capital model will work for all nonprofits, regardless of their mission, but it’s certainly encouraging to see the impact organizations of those who have been successful in crossing the ramp-up threshold.

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