Acumen Fund. Heard of it? Acumen Fund was started in 2001 by Jacqueline Novogratz, and is essentially a non-profit venture capital fund (of sorts) poised to fund needs-based business projects and programs in poverty-stricken geographies that will help residents of those areas live with dignity while improving the overall economy and marketplace.
The premise of Acumen Fund’s work is that a relatively low financial investment paired with strong business acumen can create sustainable and thriving business.
Nice intro, T, but why should I care? I’m not a venture capitalist, nor do I have a business idea that I could implement in a third-world country to help the folks their live healthier, more comfortable lives.
Well, aside from the awesome mission of this organization, Novogratz and her colleagues at Acumen Fund established this incredible concept of “patient capital”. Patient capital is why I’m talking about Acumen Fund. (By the way, Novogratz doesn’t claim credit for that term, but many out there have credited the Acumen Fund with putting into words the core concept of patient capital.)
Patient capital is the string that connects the extremes of capitalism and charity. In a poverty-ridden country, markets aren’t enough to pull residents out of financial suffering, while charity is often pushed away because of its pitying, hand-out nature. Patient capital is the middle ground. It’s investment in an innovative business plan, in a creative business opportunity intended to make things better, with the knowledge that seeing this plan to fruition will take time, educational and management resources, and nurturing support. Patient capital is funding with a focus on return on long-term social good and overall world improvement, not an immediate return on investment.
Now, here’s why I’m even bringing this up. This idea of patient capital, of putting faith in an idea and funding that idea because you believe in its positive effect more than you want a monetary return, is so translatable to…well, everything, really. Capitalism doesn’t give you time to explore, as Novogratz has said in numerous speeches of hers. But patient capital does. Patient capital provides entrepreneurs the financial capability and timeframe to explore plausible business ideas that improve life.
In a larger sense, the way our society has shaped itself doesn’t lend to exploration; it doesn’t offer us much in terms of patient capital. Everything is so fast moving these days that we hardly have time to truly delve into our endeavors and listen to what’s going on around us. If we were granted the time and faith and lack of ROI expectations (whatever they may be) to deeply explore our big ideas, what could happen?
I didn’t want to go much further than this, because I want to see how you feel about the concept of patient capital. How do you feel it translates outside the financial realm? How can the greater philosophy of patient capital benefit our business and personal lives and our desire to do good? What could we change if we lived by the premise of patient capital?
Novogratz has spoken extensively about the notion of patient capital, and while she focuses specifically on the financial meaning of capital and capitalism, I think it’s interesting to consider the idea of capital in a broader, more conceptual sense. These are some big questions I posed — long-form comments welcome. 
{ 4 comments… read them below or add one }
Hi Teresa,
Awesome blog post! I really like the discussion you’ve posed around patient capital. I am an administrator to Acumen Fund’s online community (http://community.acumenfund.org), and I think it would be fantastic if you posted this on here as a discussion that we could feature! I think that a lot of members would enjoy responding to it. I also think you would enjoy the community since you are interested in Acumen Fund, it’s a great space to bring these kinds of discussions and talk about them. Do let me know if you’re interested and I can help you get set up on the site
Hi Brittany,
I’d love to get your community’s thoughts on this. I’d imagine they’d have quite a bit to say, and I’m really fascinated by the concept of patient capital as something that reaches far beyond finance. Let me know how I can get involved and we’ll make it happen.
So fantastic to have you on board Teresa! I encourage you to sign up to Acumen Fund’s Online Community by going to this link: http://community.acumenfund.org. When you sign up feel free to input why you’re passionate about Acumen Fund, and also that I (Brittany Boroian) invited you, just so we can keep track of where you are. When you do sign up I’ll reach out to you about how to post this discussion on the community! Thanks and we’re excited to have you on there!!
Hi Teresa,
Nice to see someone offering a thoughtful take on a topic that doesn’t get nearly enough attention. I think patient capital is a great approach to reconciling the conflicting interests between the worlds of charity and financial investment. As you say, our lifestyle and methods of doing business aren’t very conducive to patient capital efforts. I think we need to change the way we approach ideas like patient capital; and one way is to frame it as a mutually beneficial investment in the future. There is so much opportunity to invest in developing countries that are in need of sustainable living projects.
A recent example is the work President Clinton has done in Haiti. Before the earthquake, he was trying hard to gain support for rice farming initiatives that would provide Haitians with the ability to feed themselves. He took responsibility for mistakes he made in office that led to the hunger crisis there. He has admitted that the policy of subsidizing our food so that we could sell it at low costs to poor countries was a big mistake. The goal was to boost our economy by helping farmers sell excess food on the cheap to these poor nations, while also maintaining higher domestic prices. The flawed logic assumed that we would help these countries industrialize by relieving them of the struggle to feed themselves. Finally, President Clinton has come out to refute that strategy, and endorse patient capital efforts that promote self sufficiency.
Whether these efforts will ever gain popular support remains to be seen. It requires having the foresight to realize that while it may not yield an immediate ROI, the long-term benefits are immeasurable on both a humanitarian and financial level. When a country, such as Haiti, can provide for itself the need for foreign aid is eliminated; and more importantly, you foster self-sufficiency and the development of a mutually beneficial trade partner.