Last year Forbes ran an article highlighting the top 30 social entrepreneurs today, nine of whom were women. Perhaps one of the most outstanding among them was Jacquelyn Novogratz, the CEO of Acumen Fund. Novogratz has found an innovative way to channel capital in order to help the poorest of the poor. Under the Acumen Fund model, philanthropic capital is used to make loans or equity-not grants-to yield social and financial returns. All financial returns are recycled into new investments. The goal is to use this capital to fund emerging leaders and social entrepreneurs who have breakthrough ideas in sectors like technology, health and agriculture in order to give every person a chance at a life with dignity. Acumen Fund is unique because it puts an equal, if not heavier emphasis, on the social returns that come from its investments than the ROI, or return on investment, which is what traditional venture capitalism uses as its main benchmark for success.
Novogratz understands that field work is important, as she must collect the quantifiable data needed in order to track progress. On a recent trip to Pakistan she got down to business, dressed in a tunic and baggy pants. She whipped out her notebook and started interviewing farmers, asking questions like, “How much livestock do you have?” and “How much money are you saving at the bank? What do you do with the cash?” However, such visits can also be difficult and take the “one step forward, two steps back” mentality. For example, in another visit to Africa she visited a struggling Kenyan microfinance firm and found that cronyism and mismanagement were to blame for the firm’s struggles. Her handwritten analysis mysteriously disappeared.
Novogratz’s model has not come without criticism; some, such as Jeffrey Sachs, an influential economist, believe that the bottom billion are too poor to be treated as consumers, therefore shutting out the notion that market and capital forces can be used to alleviate poverty. Their solution? To give the bottom billion hand outs instead. However Novogratz refuses to “live in a world of shoulds.” Although Acumen Fund’s model may not be perfect, it is people that have Novogratz’s sense of dedication and humility that make finding solutions to poverty more realistic than ever.