Pulse

Time for responsibility: As part of a special section on community service and responsibility, Time magazine just put out a list of “Responsibility Pioneers.” Acumen Fund is among them, along with investee D.Light Design, and peer organizations like KickStart, Ashoka and Living Goods. (Full list here.)

Ripple Effect makes a splash: IDEO and Acumen Fund have been partnering around innovation in the water sector, as this story on Forbes.com highlights.

Ecotact in the news: This video on CNN.com showcases the work of Acumen Fund investee Ecotact, which provides sanitation services in Kenya, as well as David Kuria, the entrepreneur behind the organization.

Outlook on GEWP: Outlook India recently featured this article on the success of drip irrigation and GEWP.

The pulse of Pulse: VentureBeat looks at the development and progress of Pulse as a platform for metrics in the social investing space.

Acumen Fund is seeking a partner(s) to market, implement, and support the Pulse software system, a flexible social metrics tool built to integrate with the Impact and Investment Standards (IRIS) (www.iris-standards.org).  Pulse and IRIS are supported by the Rockefeller Foundation, B-Lab, PricewaterhouseCoopers, Deloitte, Skoll Foundation, Salesforce.com Foundation, Kellogg Foundation, Lodestar Foundation, and others.   The Pulse tool, originally developed in partnership with engineers from Google, has recently been re-built as a  Salesforce.com application that is being piloted by a select group of social investors and grant makers.  We anticipate a full launch of the application this Fall, and there are over 50 institutions that have seen and tested the system.    Acumen’s partner(s) will be in a unique position to be a first mover in the field of social and impact investing with the support of leading institutions and companies.

The ideal partner(s) will be equipped to build upon nearly three years of work by Acumen Fund to help bring Pulse to the next level of becoming a sustainable, evolving industry standard tool to measure and track social impact.

Please contact Brad Presner at bpresner@acumenfund.org for more information and to request a copy of the RFP.

World Watches in Shock and Awe

Mark your calendars: June 16 (tomorrow) is World Metrics Day! Our declaration of an official World Metrics Day (or WMD, as we’ve been calling it) is a little (well, actually, a lot) tongue in cheek, but Acumen Fund’s commitment to metrics is absolutely serious. Figuring out how to measure social impact has long been a challenge for philanthropists, social investors, practitioners and the development sector. Our focus has been on finding ways to collect, understand and use data to (1) best support the enterprises in which we invest, (2) improve how Acumen Fund works and (3) create common measures for the sector - in that order of importance. (We’ve blogged here before about metrics, on what we like to call cost effective cost effectiveness and our best available charitable option methodology.)

If you follow our work, you know that we’ve been developing a platform called Pulse, discussed in BusinessWeek and The New York Times when it was announced last fall at the Clinton Global Initiative. Pulse helps social investors track, measure, and evaluate operational data to understand whether different approaches to solving the problems of global poverty are working. Although originally designed as a tool to help us manage our own portfolio, we’ve been working with Salesforce.com to make it available for adoption by peer organizations and to share data across the sector. We have also been collaborating with the Rockefeller Foundation, B-Lab, Deloitte and PwC to develop standard definitions of social and environmental performance that can enable comparability across portfolios (for more on this, see www.iris-standards.org). About forty organizations are currently testing Pulse, which we expect to be widely available to nonprofits later this year.

We chose June 16 as World Metrics Day for three reasons. First, last year on June 16th we convened a number of our partners and leading thinkers on the topic at the Rockefeller Foundation to map out our current strategy, and we are simply taking stock of where we have come in the year. Second, it’s Bloomsday, a day notable for its devotees’ commitment (obsession?) to a singular topic, perhaps the least linear novel ever written (Joyce’s Ulysses). Finally, it happens to be my father’s birthday (happy birthday, Dad!). My father is a pathologist and the naming of Pulse was inspired by the autopsy metaphor. Most measurement and evaluation in the social sector is like an autopsy: intrusive, inconclusive and too late to help. We wanted to build a metrics practice that could take the “pulse” of our investments, with simple but meaningful measures that can help us make course corrections real time.

So we will be spending the day thinking about and talking about and, indeed, celebrating metrics. Celebrate with us — June 16 is the first annual World Metrics Day. Remember, count something. and make it count!

Updated 6/18/2009 - thanks to Sara Olsen of SVT Consulting for her great blog post over at Social Edge on World Metrics Day. Count what counts, Sara!

Last Sunday, I had the opportunity to speak on two panels at the 10th Annual Harvard Social Enterprise Conference. The SE Conference is an impressive, energetic gathering, with more than 1,000 attendees packed in on a snowy day in Boston. The backdrop of the financial crisis was everywhere, and you could tell that many students on campus are thinking differently about their careers. At the same time, nearly every panel referred to the opportunity presented by the Obama administration, specifically the potential for the Office of Social Innovation, which from all reports is on the verge of being created.

A keynote by Linda Rottenberg kicked off the day, providing perspective on the arc of the social enterprise sector over the last decade and our opportunities for the years to come. Linda asserted that we spent the first 10 years answering the question, “What IS social enterprise?” and that we’ll spend the next 10 answering, “What have you DONE?” I agree with Linda, though I think that the sector still has a long way to go in terms of clarifying our language and explaining in simple terms what we are and the unique value we bring in combining the best of the private and public sectors as levers for change.

In my morning panel, I had the opportunity to share the stage with Jeff Walker, Ex-Chairman and CEO of CCMP Capital and Chairman of Millennium Promise; Michael Chu, one of the founders of Accion Internacional (an early microfinance pioneer) and Co-Founder and Managing Director of IGNIA Fund; and Peter Kellner, co-founder of Endeavor and Co-Founder and Managing Director of Uhuru Capital Management (launched on Monday), a fund of funds that will give a portion of its management fees to support social enterprises.

The room was packed, with close to 150 people in a classroom that comfortably seats 90. Each panelist gave opening remarks, and we jumped into the discussion. Early in the discussion, Michael Chu made the observation that, across the panel, we represented “a spectrum of theories of change,” each complementary in nature. 

Michael makes a good point, especially given that, from the outside, it may look like we’re all trying to bring capital to bear in a new way to fight poverty and make social change. But the theories of change do differ. 

Millennium Promise uses almost all philanthropic capital to catalyze a set of simultaneous interventions in Millennium Villages, and the results in terms of increased agricultural output, decreased disease burden, and improvements in well-being in these villages is impressive.

Acumen Fund, with our focus in India, Pakistan and East Africa, has set out to provide critical goods and services to the poor, as a way of removing barriers and bringing choice and opportunity. With more than $40 million in approved investments that have touched more than 30 million lives, we have a solid investment track record and have invested in many of the most successful social ventures in the geographies where we operate. We are “impact first” investors, and our main goal is return of our capital, not return on capital.

Endeavor’s principle aim is to foster the growth of “high impact” entrepreneurs in the developing world – to create a vibrant entrepreneurial economy to catalyze change.

And IGNIA, which began making investments in 2008, is leveraging its experience with Compartamos microfinance bank which, in its recent IPO, gave outsized financial returns in addition to its large-scale social impact.  Michael Chu was clear that IGNIA’s goal is to invest in small- and medium-sized enterprises with an explicit goal of “above market” returns.” 

Given the amount of opportunity, the scarcity of capital, how underserved these markets are, and the potential of entrepreneurs to create new business models that integrate the best of the private and public sectors, this is not a question of which is the “right” approach.  Rather, our collective opportunity is to roll up our sleeves, do the work, be rigorous and transparent about what we are seeing and learning, and to be relentless about sharing these lessons learned so that the sector as a whole can better understand where and how we can use the market as a listening device to learn how best to lift millions of people out of poverty.

Fortunately, thanks to the ANDE network, the Rockefeller Foundation’s Global Impact Investing Network, and Acumen Fund’s PULSE platform to collaborate on metrics, the sector as a whole is creating the platforms we need for more collaboration. Stay tuned.

Editor’s note: You can also follow Sasha Dichter on his personal blog at http://sashadichter.wordpress.com

Editor’s note: New contributor Brad Presner is Acumen Fund’s Metrics Manager. In this role, he manages the development of the Pulse social metrics platform and helps define Acumen Fund’s performance assessment strategy. He joined Acumen Fund in July, 2008, having worked closely with the Pulse team while an employee of Google.org. Brad holds a BS degree in Mechanical Engineering from Stanford University.

By Brad Presner

Last October, Brian Trelstad and I were fortunate enough to be invited to the Bill & Melinda Gates Foundation offices in Seattle. As a part of their own processes for engaging in thoughtful and actionable measurement, the Impact Planning and Improvement (IPI) Group brought together a set of leading thinkers to help inform their own thinking and potentially change their approach to measuring social impact at the Foundation.

Acumen Fund’s contribution to this meeting was a discussion of our BACO Methodology., an exercise whereby our Portfolio team compares the estimated social output of a potential investment we are considering with that of the best available charitable option that addresses the same issue. For us, this process helps us ascertain where philanthropic capital will be most effective – whether invested in the social entrepreneurs we seek to provide with patient capital or with an alternative charitable vehicle.

I think it’s safe to say that Brian and I got as much out of this meeting as we contributed. We were humbled to be in the room with peers such as Jed Emerson ofSROI fame and his former colleagues at REDF; Paul Brest of the Hewlett Foundation; Michael Weinstein from Robin Hood; Kat Rosqueta of the Center for High Impact Philanthropy, Sara Olsenof SVT Group, and others from banks, think tanks and consulting firms. The collection of thoughtful, engaged leaders was truly inspiring.

A little more than halfway through the meeting, Paul Brest made a point that all eight of the methodologies being discussed that day could be boiled down to a similar fundamental goal—calculating the expected return as a function of how you value the benefit of your program, weighted by probability of success, as a ratio of the cost of your program:

Expected Return = (Benefit X Probability of Success) / Cost

This keen observation underscores both the inherently simple goal—how much good came out of what we put in—and an abundantly complex set of questions that all eight of us in the room had endeavored to answer for ourselves – namely, how do you accurately estimate the benefit of your work?

I don’t think we came away with any definitive answers. In fact, the only thing we seemingly could agree on was that there was no single “right” answer (and that it may not even be desirable for there to be). But what this convening really highlighted is that this conversation is happening more and more. At conferences, in team meetings at Foundations, in phone calls among peers – we are seeing a convergence in the field around what we at Acumen like to think of as “cost effective cost effectiveness”. While our methods may never be the same and the metrics we track may differ, the conversations about how and why we seek to assess impact are happening with more frequency and greater depth. And while it will likely take us many more years to get there, we are light years ahead of a time not long ago when the conversations weren’t even happening.

We encourage you to take a look at the recently posted “Measuring and/or Estimating Social Value Creation Report” put together by Melinda Tuan and sponsored by the Gates Foundation. We are grateful to have been included in their process and hope that in some small way, we were able to contribute to our shared goal of advancing the field towards more cost effective cost effectiveness.

In addition to holding the “billionaire title,” these three individuals share a commitment to a new movement of social change, according to Matthew Bishop and Michael Green, co-authors of Philanthrocapitalism: How the Rich Can Save the World.  Bishop and Green believe that Gates, Clinton and Jolie are part of a new generation of wealthy, powerful people who are changing the role of philanthropy by combining focused, charitable donations with “big-business-style” investment strategies. Their book profiles several of these new philanthropists, including those listed above and other influentials like George Soros and U2’s Bono.

Bishop, American Business Editor/New York Bureau Chief for The Economist, explained the basis for focusing on the super-rich as change agents in a recent interview with Alliance Magazine: “The point we’re making is that there are more super-rich people around than ever before and they have all sorts of problem-solving talents developed in their business lives that they are now looking to bring to bear on some of the world’s big problems.”

But while these philantrocapitalists may be willing to take greater risks with their checkbooks as compared to traditional philanthropic institutions, many of them have a deep interest in accountability and rigorous performance measurement. Bishop’s and Green’s Values blog recently published an entry on philanthrocapitalism’s need for robust impact measurement systems.  Acumen Fund’s new portfolio management system, called Pulse, was pointed to as one innovative “work-in-progress” solution aimed at addressing this challenge.

Bishop also recently interviewed Acumen Fund CEO Jacqueline Novogratz at the Clinton Global Initiative about Acumen Fund’s emphasis on market-based solutions to solving the problems of global poverty (the video can be viewed below or on The Economist’s website).

In reviewing the list of names and organizations included in Bishop’s and Green’s book, it is clear that philanthrocapitalism has as many distinctions in as it does similarities.  Though the movement is unlikely to settle on a precise spot along the scale of pure philanthropy to pure capitalism, an exciting, unifying theme emerges: there is great promise in connecting high net worth individuals with innovative intermediaries to move from social investment to long-term impact.