We are excited to announce that the application process for the 2009-2010 class of Acumen Fund Fellows is now open. Applications will be accepted online until noon EST on October 20, 2008. Detailed information about the program and application the process, as well as bios of current and past fellows, can be found on our website. To apply directly, please click here.

We are looking for dedicated individuals with the moral imagination, the practical skills and the leadership potential to effect real change. The program thus far has been a resounding success – both for the Fellows and the Acumen Fund enterprises they support. Fellows have called their time with the program a life-changing experience, allowing them to build critical business skills and a better understanding of the challenges involved in serving low-income consumers around the world.

We are also excited to welcome our new class of 2008-2009 Fellows later this month. They will soon join Acumen Fund in New York to begin training and to prepare to support Acumen Fund investments. The Fellows have committed to sharing their experiences both from New York and on the ground, so expect to see frequent posts from them on the Acumen Fund website and blog.

If you know exceptional individuals who should be part of our 2009-2010 class, please encourage them to apply.

There is something Orwellian about last week’s World Bank announcement of a new poverty line, and the Bank’s entire effort to categorize the poor, that I found moderately disturbing. This top-down attempt to box the problem and then convince ourselves that, because of some statistical shenanigans, there are now more (or fewer) people living in poverty is the kind of pointless navel gazing that I want us to avoid getting trapped into at Acumen Fund.

We have had internal discussions about this, which inevitably end with the realization that we will know poverty when we see it. What’s more, we need an honest check against moving too far up market - thereby neglecting our charitable intent and our aim of trying to serve the poor, who we define in terms of lack of income, lack of access, lack of dignity and lack of a chance to take control of one’s own destiny.

It certainly should be someone’s job to think about the distribution of wealth, the trends in economic development and the amount (and distribution) of human suffering, but I would take the effort more seriously if it were done by an organization that holds itself accountable to evaluating its programs for their ability to systematically alleviate poverty.

The Skoll Foundation funds a fantastic ongoing interview series called the X Interview. Posted online to Social Edge, the X Interview is conducted by a mysterious blogger named Global X. Recently, Global X sat down with Acumen Fund ally (and Advisory Council member), IDEO CEO Tim Brown.

The interview - only 2 minutes, 30 seconds long - covers a few different topics, but Brown focuses mainly on insights he gleaned from a trip to India in the company of Acumen Fund CEO Jacqueline Novogratz:

…he [Brown] was impressed by the systemic thinking and level of innovation that Dr.Govindappa Venkataswamy (Dr. V) had brought to the Aravind Eye Care Hospital in Madurai.

It is now believed to be the best eye care and teaching facility in the world. The lesson?

“By trying to serve those who have the most needs, you can end up being truly innovative, to a point where those innovations have relevance not only in the developing world but in the developed world also.”

Via the new Skoll Foundation blog.

Last week, I had the opportunity to sit down with Jordan Kassalow, Graham Macmillan and Miriam Stone – three staff members at VisionSpring – to conduct a long-form interview. Formerly known as Scojo Foundation, VisionSpring is the pioneering base of the pyramid-focused enterprise working to provide access to eyeglasses in low-income communities around the world.

Acumen Fund is an investor in VisionSpring, having made a $500K debt investment back in 2006. We’ve followed their progress for a long time, up to and including their recent name change and announcement of a 5-year fundraising prospectus.

Rob Katz, Acumen Fund: How, when and why did you get involved with VisionSpring?

Jordan Kassalow, Chairman and Co-Founder, VisionSpring: It was very practical. I spotted a market failure in my blindness prevention work (I’m an optometrist and public health expert by trade.) For many years, my specialty was river blindness control, and when I worked in low-income communities, I saw more people coming to clinics because they couldn’t see up close, while there were relatively few who were coming to us for river blindness. I saw this pattern regardless of whether I was working in Africa, Asia or Latin America. When you’re working on blindness, the overall market relative to general eye care is small. The normal need for eyeglasses is strong, but underserved in the developing world. After many months, I finally realized that, if no one else is doing something about it, why can’t I?

It has been a busy summer here at the Acumen Fund New York office, where we’ve been working hard to implement website and blog changes that make it easier for our community to access data on and insights from our work.

On the website, it’s now possible to view metrics reported by many of our investees. These investment metrics are fed directly from our Portfolio Data Management System. We are not able to share all the available data, and some of our new investments are still in the process of collecting data, but we are committed to sharing as much information as we can, as often as we can – and this is a step in that direction.

Editor’s Note: This post is authored by Acumen Fund Summer Associate Amy H. Lin. Amy is pursuing an MBA and International Relations MA from the Wharton School, University of Pennsylvania and the School of Advanced International Studies (SAIS), Johns Hopkins University, respectively. Her professional interests are in international development in sub-Saharan Africa. She has worked at the World Bank, with TechnoServe and with the Boston Consulting Group. Amy graduated from Yale with a BA in Political Science.

By Amy Lin

Proving that BoP services and profit can go hand in hand, Nairobi-based Meridian Medical Centre has been profitably operating three outpatient clinics with one-third of its clients earning only $4 a day. In April 2008, Meridian opened a fourth clinic in Donholm, a low-income Nairobi neighborhood, to cater to a low-income clientele interested in high quality outpatient health care at a reasonable price.

Through a new partnership with Acumen Fund and The Blue Link Mirror Fund, Meridian will open 5 more clinics over the next 3 years in higher density, lower income areas. This expansion will begin in Nairobi, but with an eye to expanding to towns on the periphery of Nairobi. As the Kenyan newspaper The Standard reported on June 17, Meridian’s partnerships will leverage both capital and management expertise—strengthening Meridian’s bottom line while meeting BoP needs.

Meridian’s push into lower-income markets is part of a larger trend of companies recognizing the market potential of the BoP. In Kenya, prominent businesses like Equity Bank and Safaricom (a mobile phone company) have enjoyed explosive growth in recent years, largely due to their success at attracting large volumes of low income clients. Investors are also recognizing the opportunity to profitably serve the BoP, as illustrated in the oversubscription of the Safaricom IPO, which drew 236 billion Kenyan shillings ($3.68 billion).

As Meridian and others launch operations targeted at lower income populations to achieve higher growth rates, in Nairobi as well as in peri-urban or rural areas, the BoP will benefit from the greater choice of products and services. Just as he predicted, Adam Smith’s “invisible hand” is using corporate self-interest to achieve a greater public good.

I recently received Dial 1298 for Ambulance’s first newsletter. 1298 is an ambulance service in Mumbai. In 2007, Acumen Fund took a $1.5 million equity stake in 1298 to fund expansion of their service. Since then, 1298 (the number you call when you need an ambulance) has grown faster than expected in Mumbai and is already expanding their service to two new districts in Kerala. The company has captured a lot of press attention, with coverage from the Economic Times, DNA, the Hindustan Times, and others. 1298 currently has 51 ambulances which have taken more than 50,000 trips since inception.

Before 1298 launched its service, Mumbai had only about 12 working ambulances that fitted with intensive care equipment (which were primarily linked to specific hospitals); 9 out of 10 trips were to transport dead bodies. These weren’t ambulances; they were hearses.

1298 is one of a number of Acumen Fund investments that defies easy classification. The operating “special purpose vehicle” organization is structured as a for-profit business company that integrates smart cross-subsidies to achieve a social mission, while the supervising umbrella organization “Ambulance Access for All Foundation” is a not for profit. (If you ever needed proof that our terminology isn’t keeping up with what entrepreneurs are doing on the ground, then there you have it).

The cross subsidy model is deceptively simple. Patients who want to go to a private hospital in a full-service ambulance - staffed with a doctor - pay 1,500 rupees (about US$35). Those who go to public hospitals pay either half price or nothing. 1298’s leadership is committed to having 15-20% of the company’s calls be serviced free or at reduced cost. This simple logic takes away the cumbersome process of identifying who can afford to pay and who cannot.

Over at Social Edge, former Acumen Fund Fellow and current IDEO employee is leading an online discussion about designing for social impact. This is a natural topic for Jocelyn, whose blog - Design and Reach - covers these topics. Beyond her blog, Jocelyn has - in her IDEO capacity - worked with The Rockefeller Foundation to develop a very handy workbook and guide for companies looking to design for social impact. Finally, she wrote a guest post about the project over at NextBillion.net, the Acumen Fund / World Resources Institute blog exploring development through enterprise and base of the pyramid strategy.

The Social Edge-hosted online discussion is underway. Jocelyn has introduced it as follows:

Design and innovation have been increasingly recognized as important factors in the success of social enterprise. At IDEO, we believe in the power of design thinking, a human-centered approach to innovation and problem solving. We have seen firsthand that social entrepreneurs can incorporate the principles of design thinking to develop product or service offerings that better connect with the needs of their customers, move more quickly from design to implementation, and communicate the benefits of their offerings in a compelling manner.

Design thinking is applied to more than just products; it can be used to design programs, services, experience, spaces, or just about anything you can think of. Three aspects of design thinking that are especially relevant to social entrepreneurs are empathy, prototyping, and storytelling.

Check it out, register and chime in.

Varun Sahni, Acumen Fund India Director and Biju Mohandas, Acumen Fund India Business Manager, were both featured prominently in recent news stories.

In the first, an article entitled The Right Prescription, Biju is cited as “one among a growing number of doctors who have a nontraditional resume.” The article goes on to describe how the Indian healthcare industry is absorbing trained managers at a rapid pace, with Biju and his cohort leading the way. Of course, with his MBA as well as his medical degree, Biju is perfectly suited for his role at Acumen…

The second article, appearing in VC Circle, is a long-form interview with Varun, our India Director.

Enjoy both pieces, and congrats to both Biju and Varun on their new celebrity status.

Many of us in the base of the pyramid community, myself included, often wonder, is this business really making a social impact? Sure, there are real indicators of success, but what action drove that particular outcome? As I ponder the social impact of business, I’m reminded of an old marketing adage: We know at least 50 percent of our efforts are working “we just don’t know which half. (Hat tip to Brian Trelstad for bringing this up in a meeting.)

In order to build truly inclusive businesses, our sector must start tracking impact over time. This we can probably all agree on. But the challenge is not so much in creating buy-in around the idea of measurement, but in finding a way to integrate an effective and user-friendly system for doing so in an already resource-constrained work environment.

Because of these and other stumbling blocks in creating social metrics, Rob Katz and I were particularly intrigued by the newly released Measuring Impact Framework developed by The World Business Council for Sustainable Development (WBCSD). This framework, which has been in the works for nearly two years, is designed to guide companies from small enterprises to large multinationals through the process of measuring and assessing impact, and making better-informed future decisions within the context of a larger development paradigm.

The WBCSD framework is designed to be applicable across sectors and at varying points throughout a company’s life cycle. The core business activities suggested for analysis — governance & sustainability (including corporate governance and environmental management), assets (infrastructure, products and services), people (jobs, skills and training), and financial flows (procurement and taxes) are flexible, open-ended and non-exclusive.

As someone with a limited background in program and policy evaluation, I can see how this framework could be helpful in conducting an internal impact audit. The WBCSD is effective in outlining and defining the various parts of any good analysis: understanding the relationships between a series of business activities, company resources, direct and indirect outcomes and large-scale impact. Assuming the same individuals conduct the impact analysis over consistent time intervals, organizations can use the Measuring Impact Framework as a tool for identifying goals, achieving internal benchmarks and measuring their own progress over time.

But to gauge an organization’s positive and negative contributions within a broader development context, it will become increasingly important to consider counterfactuals and to establish standard indicators as part of the assessment. By measuring against peer organizations as well as against itself over time an organization can protect itself from its own bias and see itself as part of a greater competitive landscape. Only through this lens will business leaders be able to make integrated and inclusive decisions for change.

It may be a long time before the social business sector (a vague and multi-faceted term in-and-of-itself) can agree on a set of standard metrics; but the work of WBCSD and others such as the Aspen Network for Development Entrepreneurs is encouraging. If nothing else, the Measuring Impact Framework is a tool that businesses can use to improve reporting processes, identify and communicate priorities with stakeholders. Hopefully, it will also serve as a catalyst for shared effort and continued development on sector-wide measurement tools.

Yesterday morning, Acumen Fund hosted a monthly breakfast for members of our Partner community featuring Acumen Fund Director of Capital Markets and Energy Portfolio, Raj Kundra. With 30 guests in attendance, this promised to be an engaging discussion.

Brian Trelstad, Acumen Fund Chief Investment Officer, opened up the discussion with reference to Acumen Fund Advisory Council member Peter Goldmark, who observed in 2006 that marginal changes in the climate will affect those on the margins first and most profoundly. Later that yearin no small part due to Peter’s influence - Acumen Fund made a Clinton Global Initiative commitment to launch an energy portfolio, and we began our work in energy 12 months ago.

Raj began the talk with a description of the Acumen Fund model, and how we raise philanthropic capital to invest in breakthrough enterprises that provide critical goods and services to the poor with a focus on health, water, housing, and most recently energy. So while Acumen Fund acts like a venture capital firm, we differentiate ourselves with our focus on large-scale social impact, coupled with economic sustainability, as our primary objectives. We invest in management assistance to support our investees both before and after we make an investment. And we believe in the power of sharing what we are learning, based on the recognition that in a world with trillions of dollars of capital, we will always, by definition, be a relatively small player.

Raj continued with a discussion of the poverty trap that poor people face with respect to energy. As of 2005, poor people spent more than 14% of their incomes on energy, and Raj estimates that these numbers have increased to over 20% with the recent surge in energy prices. In addition, the poor often use fuel sources that are expensive, inefficient, and dangerous (for example, kerosene lamps or burning wood for cooking in open spaces). Finally, with limited access to energy, productivity (whether on the farm or the result of the shortened day for studying or work) is simply lower, all of which contribute to a poverty trap.

Last week, Raj Kundra and I participated in the Aspen Network for Development Entrepreneurs (ANDE) meeting in Aspen, Colorado. The ANDE group is one comprised of Acumen Fund peers - organizations working to stimulate economic development and social impact through the support of small and growing businesses. While some groups work to develop all kinds of enterprises (e.g., Technoserve, Endeavor), we and others like Root Capital and E+Co have a specific focus on businesses that serve the poor.

Overall, the meeting was very successful. I feel that ANDE could become one of the main convening bodies for this diverse group of organizations working to support small and growing businesses. We are at an interesting inflection point for the sector, as there are a number of things that we could probably do better collectively, but there is still some reluctance around the table on finding just where to contribute, and where to keep things closer to the vest (virtually every group at the table, including Acumen, was making that calculation.)

In the next few months, ANDE will focus on creating a platform for the group to convene, continuing to push on the standard metrics (our Portfolio Data Management System is being lined up as the technology platform to make this work), and thinking about ways to do capital aggregation. There was interest in joint training (huge interest in other talent issues, especially vis a vis the companies we support) and also in bringing together the people responsible for deal documentation to help standardize documents and reduce transaction costs.

One big push in particular is for the network to continue pushing outside of North America. The funders believe (as does the steering committee) that the value of the network will be enhanced if the emerging network of funds like Aavishkaar, TBL-Mirror and Bridgeworks can begin to come together in Nairobi or Hyderabad to understand ways of collaborating (or competing) more effectively.

As we move forward, Acumen will continue to stay involved in the steering committee and find ways to plug more of our team and our work into ANDE, as appropriate. We offered up our new platform with NextBillion.net as a possible communication/knowledge sharing channel, and will continue to support the development of PDMS as a metrics tracking/sharing tool.

Stay tuned for updates as we have them.