Global Health Ideas

Finding global health solutions through innovation and technology

Business Week:”Acumen’s New Model for Third-World Aid”

Today Business Week profiled the Acumen Fund and their focus on developing country solutions. The Acumen Fund (based in New York City) is an interesting organization, they are “a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty”.

Below an advisor to the Acumen Fund says that the charitable money is there, but the solutions are not. I would have to disagree with such a stark statement. The money making solutions may not be there, but the solutions to some major global health problems are certainly there. Not every solution will be sustainable on its own, there are some problems that will need to be funded outright until a particular problem is eradicated or alleviated. I definitely applaud Acumen’s overall approach and their ability to raise capital make a robust attempt to find innovative projects, but let’s be clear about what type of solutions they are pursing – those with a financial return on investment. This is a great thing, but it is a mistake to send the message that solutions are not there. I highly recommend you read this article.

From Business Week, November 10, 2006:
By Jessi Hempel: “Acumen is a leader in the fast-emerging hybrid sector that straddles private industry and nonprofits. Technically a nonprofit, it invests in enterprises in developing countries with the strategy and discipline of a Silicon Valley venture-capital firm. Acumen’s founder is Jacqueline Novogratz, a former banker with an infectious magnetism…Under her leadership, the fund manages $20 million in investments that fall within three portfolios: health, water, and housing. But Acumen’s goal is far larger than successful companies. Says Novogratz: “We’re creating an overall design for how you provide goods and services to poor people.”

“There’s growing interest among investors eager to fund for-profit businesses that have both social and economic impact. Rather, there’s a paucity of creative ideas. “It’s all about innovation,” says CEO Tim Brown of Ideo, who advises Acumen. “The money is there, but the solutions aren’t.”

“Acumen uses classic consumer-focused design methods to solve the problems of poverty…Acumen’s portfolio companies create from the bottom up…”Start with the individual,” says Novogratz. “Build systems from their perspective. Really pay attention, and then see if they can scale.” Plenty of nonprofits have embraced the term “venture philanthropy” in recent years. But while most aspire to new forms of grantmaking, Acumen eschews giving money away. Instead, it buys equity in companies and offers them loans. It made a $600,000 investment in WaterHealth International, which will help the startup expand its franchise model for delivering safe, affordable water to Indian customers.” FULL STORY.

From the Business Week article here are couple of more excerpts from their photo essay on the A to Z anti-malarial bed net solution, the full slide show is availabe at the beginning of the article:

acumen_bednet.jpgAcumen’s most successful company to date is A to Z bednet factory in Tanzania, which makes inexpensive mosquito nets that protect people from malaria. This fall, A to Z will make its final payment on a $325 million loan. Acumen’s investment allowed A to Z to introduce a new kind of anti-malarial bed net that originated from Japanese company Sumitomo Chemical. This net is impregnated with a long-lasting insecticide that lasts for up to five years. A to Z also has found a cheaper way to weave the bed net. This will bring down the cost of production to $5 from $7.

acumen_factory.jpg

Increasing Production, Creating Jobs: By the end of 2006, A to Z’s bed net production will ramp up to 7 million per year. The nets are currently protecting more than 5 million people in Tanzania. And 2,000 jobs have been created, primarily for women. Right now, most of the nets are purchased by UNICEF and distributed as a part of their aid efforts. Acumen is working with A to Z to distribute the nets through women sales agents, who buy them from A to Z and make a commission by selling the nets in their villages.

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Written by Aman

November 11, 2006 at 1:27 am

Posted in Uncategorized

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