The GiveWell Blog

Acumen Fund and social enterprise investment

Seth Godin makes an appealing case for “social enterprise investment” along the lines of The Acumen Fund:

When two people trade, both win. No one buys a bar a soap unless the money they’re spending for the soap is worth less to them than the soap itself.

When someone in poverty buys a device that improves productivity, the device pays for itself (if it didn’t, they wouldn’t buy it.) So a drip irrigation system, for example, may pay off by creating two or three harvests a year instead of one.

How does Acumen Fund create these markets? The answer is patient capital. The companies that are selling solar lamps to replace kerosene or water purification systems in tiny villages, or housing projects for peasants in Pakistan or even ambulance services in Mumbai fully intend to make a profit, but the venture capitalists on Sand Hill Road aren’t in a hurry to invest in them. The investments are a little too risky, take a little too long or a little too unproven to take a chance on.

So Acumen finds these entrepreneurs on site in the developing world, funds them, teaches them and pushes them to build really big organizations. A to Z has literally thousands of people in their modern factory creating malaria bed nets in Tanzania. And so it grows.

There are reasonable arguments that this sort of larger-scale financing is far more promising than microfinance, which typically focuses on tiny microenterprises that are unlikely to achieve large scale and create jobs. If we could find a strong charity in this area, we’d be excited to recommend it. But as with other areas, we try to go beyond the story and ask critical questions, and so far we have found no organization – including the Acumen Fund – that appears to answer them.

Our main question in this area pertains to an investor’s track record. We’d expect large-scale investing to have a success rate well under 50%, but we’d want to see at least an example or two of real success in the past, consisting of any of the following:

  • An investment that has been shown to improve the lives of customers (for example, tracking bednet use in areas served by A to Z).
  • An investment that has been shown to create jobs, i.e., employ people with previously low incomes.
  • A financial return. (Note that it isn’t enough to point to a “portfolio” member and observe that it’s a successful, self-sustaining business. Anyone can make a loan or grant to an already-successful business; this doesn’t mean they’re having an impact.)

Given Acumen Fund’s reputation for (a) general excellence and (b) focus on evaluation (see the Acumen Fund discussing these issues here and here), we would have expected them to produce such examples. But after evaluating them for our economic empowerment grant, we have concluded that:

  • They do not directly track social impact of the organizations they invest in.
  • They do not have information on the effects of their investments on jobs.
  • They have declined to share information on the performance of their loans, and have not yet exited any equity investments.

A couple of other concerns:

  • At least one of their investments, VisionSpring, has a major charitable solicitation component (for example, they have applied for funding from us). Acumen’s loan could end up getting repaid by donations, which wouldn’t go well with the idea of “patient capital to create self-sustaining institutions.”
  • Their documents are largely at too general and vague a level to give a concrete sense of how their investments are going.

Given this situation, it’s hard to see the organization as more than an experiment at this point. No matter what its team’s credentials, there is the enormous question of how developed-world business experience translates to the goal of making good and socially impactful investments in the developing world.

As with other unproven charities, it seems to us that Acumen should be primarily funded by those who are very close to the relevant people and issues, until it is able to demonstrate not just a good story but some real results. Other similar organizations seem to be similar cases.


  • Jeff Mowatt on November 30, 2009 at 2:37 pm said:

    How about the lesser know People-Centered Economic Development approach, first deployed in 1999 to source a development initiative for USAID and FINCA in Russia.

    With $6 million invested and returned, 10,000 new businesses and 36 spin off social projects.

    In 13 years no charitable funding or grant solicited or given.


  • Brian Trelstad on November 30, 2009 at 2:43 pm said:

    At a moment when we are witnessing the social impact investing field undergo rapid growth, we welcome deeper discussion on social impact and lessons learned. During its eight years Acumen Fund has helped define the field of patient capital: investing in enterprises that combine financial discipline with social impact. Our definition of success is a change in how the world tackles poverty and recognition that entrepreneurial models and engagement by private sector commercial investors should be a part of the solution to global poverty.

    We are proud of our track record on social impact, job creation and investment performance – whether our early investment in A to Z Textile Mills in Tanzania, which currently produces more than 20 million anti-malarial bednets per year and has created more than 6,000 jobs; in WaterHealth International, which has scaled from 1 plant in India to nearly 300 in the five years since we first invested; or more recently in Dial 1298 for Ambulance, which has grown from 10 to 100 ambulances in India and has already served more than 50,000 customers with world-class emergency care. Our portfolio as a whole has created more than 20,000 jobs and served more than 30 million people in South Asia and East Africa. We have already seen five game changing companies emerge, businesses that are on their way to serving over a million customers and reshaping the development landscape in the process.

    On social impact, as you note, our premise is that the market is a good starting point: if customers return, there must be something implicitly valuable in what our companies are offering them. But we don’t stop there: for each investment we seek to understand what is known about the product’s role in improving health or quality of life, and then whether we are seeing those same benefits among the customers of our investees, tracking customers served and products sold, as well as long-term impact when feasible. We also push ourselves and encourage our peers to access and share data so we can be judged by standard yardsticks of social and financial return. Check out and for some of the metrics tools we’ve helped develop.

    But, because we are investing in privately held companies, there are some limits to what we can share publicly, such as whether a company is current on its loan payments or what its quarterly earnings are. We are confident in the strength of our loan portfolio, that we will have an equity exit or two in the next year, and that our current portfolio will return all of the capital that we have invested.

    The reality with patient capital is that it does require patience. Eight years into patient capital investing, we are seeing the model work. With a portfolio of more than $40m in investments by year end, and an active pipeline of another $10m in 6 countries, we are in the process of demonstrating the real potential for this field. We look forward over the coming years to sharing with GiveWell and others the impact we are seeing in the lives of the millions of people living with more dignity and security because they now have affordable access to critical goods and services.

  • Hi Brian, thanks for your response.

    Re: social impact. You state, “for each investment we seek to understand what is known about the product’s role in improving health or quality of life, and then whether we are seeing those same benefits among the customers of our investees, tracking customers served and products sold, as well as long-term impact when feasible.” However, it appears that, to date, there has been no assessment of impact beyond customers served and products sold (we base this statement both on Acumen Fund’s public materials and on conversations with representatives). Is that correct?

    Re: investment performance. You observe that some of your investments have experienced significant growth in terms of production/sales, but this is an observation about investment/outputs, not performance/impact. It’s akin to pointing to an investment in Amtrak as generating many new miles of railroad track and new ticket sales, or pointing to a donation as generating many more community education programs run. It is very far from a demonstration of success; we believe that the return on Acumen’s equity investments will be a better measure.

    We look forward to following Acumen’s progress and hearing about its equity exits. We agree that “patient capital” requires patience, and indeed this is intended main thrust of our post: that Acumen Fund as of now should be considered an experiment in progress rather than an already-successful entity looking to scale up its proven approach.

  • Paul Polak on November 30, 2009 at 5:47 pm said:

    I’m delighted to see a spirited discussion on measurable impacts!

    One example of a non-profit organisation that uses business methods to produce measurable economic impacts is International Development Enterprises (IDE) which has increased the net annual income of more than 3 million poor farm families in developing countries by $288 million (US) per year, with an investment of $78 million by IDE and its donors, and an investment of $139 million by poor farmers as customers.
    (see p 47 in my book, Out of Poverty
    For an example of third party studies of the social and economic impact thisw approach, see Pedaling Out of Poverty, by Tushaar Shah, at

    I believe we are at the very early stages of a revolution in business which will demonstrate scalable profitability from serving poor customers.

    paul polak

  • Brian Trelstad on November 30, 2009 at 10:25 pm said:

    Thanks Paul for your note, and we are as you know real fans of your groundbreaking work.

    Thanks Holden, for your follow up and to clarify, while we do not routinely conduct impact evaluations on each investment (the cost would be prohibitive), we have raised some money and funded researchers to conduct two field studies, one on bed-net pricing and one on health and socio-economic impacts of access to safe water in rural India. One study has been submitted for publication and the other is in the final data analysis stage. We also actively seek to connect our enterprises with academics interested in studying impact, like the work that Ted London has spent several years doing at VisionSpring on the impact of affordable eyeglasses or introducing our maternal hospital chain to researchers looking to understand how to prevent the high rates of maternal mortality in India.

    On the second point, I think you are saying that counting the growth in outputs is an inadequate way of measuring impact; in that we agree. We have, however, been very clear from the outset that we think that assessing the social value of an intervention (say, solar lanterns displacing kerosene) and then counting outputs over time, with selective more rigorous assessments in areas where the literature is unclear, is a cost-effective approach to understanding impact. Many of our peers in the field agree that this is a practical middle ground between expensive and time consuming evaluations (many of which, according to the Center for Global Development’s 2005 report “When Will We Ever Learn”, are not that insightful) and just telling compelling stories. We would certainly be the first to want to take a look at social sector organizations that have figured out how to build rigorous, independent impact assessments into their business models. This is an area where GiveWell could offer real insight.

    On your final point, while we acknowledge the risks inherent in each new investment we make, we no longer consider ourselves in the experimental stage. We are on our way to scale with capital deployed, capital committed and conversations with partners about new geographies and sectors where we can introduce this methodology to serve people that the capital markets have overlooked and the development field has viewed as charity cases.

  • Jim Fruchterman on December 1, 2009 at 9:24 am said:

    There’s a bit of a cannot-win situation here. I don’t think the set-up provides much scope for a real social investment firm to succeed, Acumen or an imagined “successful” Acumen competitor.

    Most organizations (for-profit or nonprofit) spend a few percent of their revenues/budget on measuring their activities, mainly through accounting and similar measures. To do true impact assessment at the levels done by REDF portfolio companies back in the day, or a group like Kickstart, typically cost more than 10%. Oh, but these don’t tend to be high margin businesses in the job creation field. So, 10% is likely to be more than any meager net profit. So, to measure them enough, we need to sink them. Oops. No wonder people don’t tend to do this full-on assessment unless someone is really, really wanting to pay for it. A billionaire like George Roberts or Bill Gates, say.

    So, realistic managers look for proxies of success. How many units are we selling? How many people are we employing? Are we expanding? Are we making money?

    But, it seems like Acumen can’t win with the proxies everybody else uses.

    Selling 20 million anti-malaria bednets a year? Have studies in hand showing they save lives? Not good enough: need to show that those A-Z’s bednets specifically are having the impact.

    Creating thousands of jobs. Studies show job creation is good (I have to assume!). Not good enough: how poor were those people you hired?

    Expanded activities like ambulances and clean water plants? Not good enough: how do we know those ambulances and water plants actually did any good? [Hint: people are spending money on them.]

    Invested in companies that were successful? Not good enough: “anybody” can make a loan or an investment in a successful business. You gotta love that one! I’ll share it with my friends the VCs here in Silicon Valley.

    I want to encourage Acumen to continue to expand their “unproven” activities. I don’t want them to saddle their investees with measurement costs that are unrealistically high. I want them to use reasonable proxies for impact: products and services that have been demonstrated beneficial that people in the real world are apparently willing to pay for.

  • Brian, I would be very interested in seeing the impact studies you mention once they become available. Please let me know how I can make sure to stay posted on this.

    I agree that the “practical middle ground” you describe is meaningful, and indeed our recommended charities generally follow this template rather than constantly conducting rigorous impact studies. But as I interpret it, this “middle ground” generally has to involve much more than sales figures – it should involve addressing as many ways as possible in which Acumen Fund’s impact might deviate from the measured impact of past similar activities. To date, I have not seen an instance of Acumen Fund’s conducting or sharing such analysis. If you can share such instances, please let me know.

    You state that the Acumen Fund no longer considers itself to be in the experimental stage, but don’t appear to state the basis for this. Is it the impact studies that aren’t yet public, or is there other evidence we’re overlooking? I stand by the original post’s assertion that the Acumen Fund shouldn’t be thought of as a success until it has demonstrated a financial return or social impact, something I still haven’t seen.

  • Jim, unlike Brian, it sounds like you are essentially advocating a focus on for-profit-style rather than nonprofit-style metrics. We have reservations about this approach, but see some potential in it. Yet we have not seen evidence that Acumen Fund meets this standard.

    Your proxies are, “How many units are we selling? How many people are we employing? Are we expanding? Are we making money?” The last of these questions doesn’t seem to have been answered (at least not publicly) in Acumen Fund’s case. The rest could form a reasonable case for success, if put together in a systematic and analytical way, but none of the documents that Acumen Fund makes available seem to do this.

    If you were to make the case for Acumen Fund on a purely “for-profit” style basis – putting together a collection of relevant facts that would convince investors that it’s been making good investments and is on the way to making money – which document(s) would you point to?

  • Jeff Mowatt on December 2, 2009 at 12:58 pm said:

    I begin to see why there’s something of a failure to communicate here, in that for profit advocates od social enterprise aren’t usually referring to a hybrid or blended approach, but to business which determines that a social outcome is the primary purpose of the business. This area, represented by B-Corps, Community Interest Companies in the UK and more recently L3C organisations in the US has discussion space on Linkedin at the L3C Connect Group and the one I run, Social Business Profit for Social Purpose.

  • What about endeavor? 12 years, 409 entrepreneurs receiving capital investment, $3.15 billion in revenue, and over 98,000 jobs created. Is this not an example of a successful investment group that is economically empowering people in developing countries?

    They do not track health improvement but they do track job creation. I would direct money towards endeavor investments if clear results in the area of economic empowerment is a value the philanthropist maintains.

  • Ian Turner on December 3, 2009 at 4:25 pm said:


    How do you evaluate the success of a “business which determines that a social outcome is the primary purpose of the business”?

  • Jeff Mowatt on December 4, 2009 at 5:47 am said:

    Ian, I would say by what it can bring about as quantifiable social change. In our case it began with advocacy for investment in childcare which influenced changes in government policy and brought other business on board.

    Though the second part, a social enterprise investment fund, was displaced by a new foundation, it was all the same, leverage for government action which brought in others to invest through CSR initiatives.

    This comes as the result of applying a profit for purpose approach to invest in research and planning and where private investment could make a great difference is in completing the task, investment for children to have a family home. There are 100,000 in institutions, possibly 200,000 living on the streets and the expecttation that 60% of girls will enter prostitution or be trafficked, provide the raw materials for a child porn market estimated by Interpol at $100 million and catalyse an HIV epidemic which is estimated to affect 1.6% of the population. I offer a forum for those interested in this form of investment.

  • Ian Turner on December 4, 2009 at 9:52 pm said:


    If you evaluate the organization by the amount of social change that it brings about, then doesn’t that make it a charity, rather than a business? After all, it sounds like if such an organization were losing money but causing social impact, you would still consider it a success. To me that sounds a lot like a nonprofit and not much like a business.

    In what way is investment in such organizations different from donation to a vanilla nonprofit?



  • I don’t think the social enterprise advocates are failing to communicate re: nonprofit vs. for-profit objectives. The point of this post is that we have not seen success from Acumen Fund by either standard.

    Figures relating to dollars invested/spent/raised, jobs created, and even sales (of possibly subsidized products) do not by themselves indicate impact. They indicate that money was spent, but we believe that there is no limit to how much money one can spend while still failing to achieve impact. Such figures could, if presented in a careful and analytical way, make a strong case that success has been achieved or is likely in the future. But the groups we’ve looked at in this area don’t seem to have done so (at least publicly).

  • Kevin Parcell on December 8, 2009 at 9:41 pm said:


    You say your evaluation of Acumen Fund rests on three criteria (and I quote):

    * An investment that has been shown to improve the lives of customers (for example, tracking bednet use in areas served by A to Z).
    * An investment that has been shown to create jobs, i.e., employ people with previously low incomes.
    * A financial return. (Note that it isn’t enough to point to a “portfolio” member and observe that it’s a successful, self-sustaining business. Anyone can make a loan or grant to an already-successful business; this doesn’t mean they’re having an impact.)

    These seem like not unreasonable criteria to me. But it also seems to me that you are declaring that in this case you lacked a yardstick by which to measure, or, in other words, you are concluding neither that there is no good measure nor that Acumen Fund hasn’t met all criteria, but that your measure fails. Indeed, you state that Acumen Fund is responsible for your failure, declaring very clearly that it has failed to prove worthy as a cause because it hasn’t used your standard measure, as distinguished from the rational conclusion that it has merely failed to be measurable by your ruler.

    In fact, it IS simply unreasonable to suggest that Acumen Fund has failed when its patient capital strategy has generated an operation that has produced so many mosquito nets (20 million a year) at a price within reach of so many of the poorest people, that it has happily had to pump its returns back into employment (6000 jobs) and production to meet demand.

    I think I’d have to agree with you that Acumen Fund is hurt by not having an evaluation process that serves such “measurers” (if you’ll pardon the Bushism), but when an organization is so manifestly helping so many people, I have to conclude that in this case the blame lies with the evaluators (inside and outside of Acumen Fund) and not with Acumen Fund’s patient capital model as you suggest.

    You conclude that Acumen Fund is no more than an “experiment” because it doesn’t fit your measure, not because it hasn’t helped people, and you warn investors away as if your ruler is what truly matters, rather than the obvious results. I respectfully submit that in this case readers should be warned against heeding GiveWell’s advice.

    This is not to say that a blog must be right 100% of the time to have value. But I’ll conclude my criticism by pointing out that my attention was drawn to your critique, Holden, because I happened across Elie’s blog here on December 2nd, which stated “We don’t report on Smile Train, Kiva, Acumen Fund, UNICEF, or any others for the sake of the criticism; we write about them to show you how much more you can accomplish with your gift if you’re willing to reconsider where you’re giving this year.” Now, I think it’s fair to offer your correct conclusion that Acumen Fund isn’t proven by your measure, quite fair I suppose, but it is unreasonable and poorly done to suggest that your failure to measure signifies Acumen’s failure to produce. Put simply, Acumen Fund is teaching people to fish and the people are eating the fish they catch. That’s good work, the best. And so you ought not conclude there are no fish because you don’t them.

  • Kevin Parcell on December 9, 2009 at 10:23 am said:


    I’ve stopped back to review the note above that I left last night, and I’d like to add a thought. It seems to me that the reason you are not recognizing the value of Acumen Fund is that you are not looking at it for what it is. That’s what I mean about using the wrong ruler — your measuring it against something it doesn’t intend to be. You write that “anybody can make a loan or a grant to an already-successful business; this doesn’t mean they are having an impact”. But Acumen Fund looks to identify those extraordinary enterprises that might do even better ( with their help (or might fail without help) and then they step in with much more than a loan. Consequently — because your measure tends to look for some new effort to give money that improves people’s lives — you don’t immediately see the power and success of their approach. Or so it seems to me.

  • Kevin, we haven’t stated that Acumen Fund has failed. We have stated that it hasn’t demonstrated success (by any reasonable yardstick that we’re aware of).

    You seem to disagree, stating that it is “manifestly helping so many people.” In what way do you think its success is “manifest?” If you are pointing to the same measures others have brought up (dollars invested, nets sold, etc.) I stand by my previous comment on this thread: those are measures of dollars spent, not impact. If you believe there is another sense in which its success is “manifest,” please share.

  • Kevin Parcell on December 11, 2009 at 10:54 am said:

    Thanks for the reply, Holden, and the opportunity to make my argument. I’m glad you hold yourself accountable — that says a lot about your work, of course, and I do wish you well in all your good-hearted work. But I think it’s important to be frank here: You’re site is recommending that people don’t donate to Acumen Fund because you say people can find better places to give. I say that you are wrong — Acumen Fund has proven to be the best, but it is your measure that fails.

    And so, we have three issues: The quality of Acumen Fund, the quality of your measure, and my assertion of your mistake in confusing the first two. Addressing these three issues clearly enough to make my case will take a little time, but that is as we should expect whenever we examine something from a fresh perspective because we need to adjust our focus.

    As I stated in my earlier comment, you have equated your failure to measure with Acumen’s failure to produce a result. Now, you imply that you are right unless I can provide a better measuring stick. This simply multiplies your error of confusing the measuring device with the thing being measured. But I will provide the better measure, nevertheless.

    Regarding the quality of your measure, if it fails to identify impact that exists, then it is lacking, and in this particular case it does seem to have missed the mark.

    You argue in your blog that

    * Their documents are largely at too general and vague a level to give a concrete sense of how their investments are going.

    So perhaps here we see precisely where GiveWell makes its mistake (I say perhaps because I’m assuming that all the information is on the table): GiveWell looks for a certain demonstration of results, and it confuses that demonstration with the results themselves. Or, in other words, vague documentation of a result doesn’t signify the presence or lack of a good result; and so if vague documentation cannot support the conclusion that Acumen Fund is the best, so it also cannot support your conclusion that it is less than the best.

    However, you also assert that vague documentation is inconsistent with “Acumen Fund’s reputation for (a) general excellence and (b) focus on evaluation”, and that this is a part of “the situation” that leads you to grade them poorly. I appreciate the thoughtfulness of that consideration. But in fact, vague documentation is ironically consistent with the innovative process that Acumen Fund champions, and so I’d like to respectfully suggest that you look a little more closely at that process to understand why and achieve a better measure.

    From Wikipedia:

    A value chain is a chain of activities. Products pass through all activities of the chain in order and at each activity the product gains some value. (

    In the particular instance of the bednets that we both used as an example, Acumen Fund augmented the producers “private sector distribution channels” ( This is exactly what the “acumen” in “Acumen Fund” is about: using business smarts to supercharge a business that has a great product or service. The “value added” to the value chain through augmenting distribution can only be vaguely measured because that value feeds back into the process. We would expect to see increased sales, increased production, and increased employment, as a result, and in this case we do — manifestly — but distinguishing exact cause and effect is impossible, and so Acumen Fund’s self-measurement is vague.

    The vague causal link cannot be avoided, and that generates vague documentation, but the effect is crystal clear: The long-proven strategy that Acumen Fund is bringing to the base of the pyramid, where it has been most lacking, is producing tremendous results. I believe those who have given so much to make this happen have earned our support. And Holden, this is just the tip of the iceberg of the acumen that is out there longing for opportunities to help, because this is a new strategy. And so, I believe you can accomplish a lot by helping your readers to understand the potential to “do good by doing well” that social enterprise investment represents.

    There isn’t a better investment on the planet than sustainable social enterprise.

  • Kevin, most of your comment seems to be arguing that it is impossible for Acumen Fund to provide strong evidence of impact, even if it has a strong impact, given what it does. That may be true, but if so, still does not establish (or even imply) that Acumen Fund has in fact had an impact.

    I would like to know whether you can point to evidence – of any kind, by any yardstick – for a claim like this one:

      “the effect is crystal clear: The long-proven strategy that Acumen Fund is bringing to the base of the pyramid, where it has been most lacking, is producing tremendous results.”
  • Kevin Parcell on December 12, 2009 at 10:37 am said:


    Thank you again for an opportunity to expand my argument. I think I ought to point out that I don’t work for Acumen Fund. I admire its work and I’m passionate about social enterprise, so perhaps I’m not always as objective as some others might be. But I will try to answer your challenge fairly, as an interested third party.

    Holden, I’m NOT arguing that “it is impossible for Acumen Fund to provide evidence of impact, even if it has a strong impact, given what it does.” I’m arguing that GiveWell’s measure doesn’t work in this case, and I’m arguing that this is because Acumen Fund’s business-focused process doesn’t itself produce the type of documentation that GiveWell seeks.

    Yet, I do assert that “the effect is crystal clear”, and I appreciate your invitation to point to “any evidence of any kind, by any yardstick” to support that claim. That’s a very generous standard, and so I feel compelled to try to meet it.

    In my previous comment I explained why the effect might be vague within the documentation produced by Acumen Fund: it’s veiled in the weaving of the value chain. Now let me explain why the effect is nevertheless crystal clear, using an analogy to illustrate.

    Here in Florida, we had an advertising campaign that sought to deliver a message that was aimed at reducing teen smoking (The “Truth” campaign). This advertising campaign is strongly analogous to Acumen Fund’s focus on “distribution channels” for the bednet enterprise, and the aim of reducing smoking is strongly analogous to the aim of reducing insect bites. Surveys here immediately showed that teen awareness of the message increased following the advertising, just as sales figures immediately showed that many more bednets were reaching consumers. And we know from past studies that advertising and increasing distribution channels both often work and that when they do then we see the kind of immediate results we have here. Thus, we have a strong argument based on reason — an inductive as well as a deductive argument — that both the ad campaign and Acumen Fund’s strategy succeeded. Indeed, this is as we would expect, and the expectation is obviously why so many successful businesses engage in one or both of these methods.

    Thus, I believe I’ve met your challenge to “point to evidence – of any kind, by any yardstick” that supports my claim that the effect is crystal clear: The long-proven strategy that Acumen Fund is bringing to the base of the pyramid, where it has been most lacking, is producing tremendous results.

    Naturally, further study provided the causal link between the ad campaign and the increased awareness of the message, and still further study linked the campaign causally to reduced smoking, and we expect that eventually we will have the causal link between the ad campaign and reduced disease. Here in Florida, we have billions of dollars from a tobacco lawsuit to draw from to pay for those studies. But Acumen Fund relies on philanthropy, and so those future studies are less sure to happen. Fortunately, the business world understands, and thus we are seeing a revolution in philanthropy led by business that is focusing on social enterprise, and I expect that funding for the causal studies that GiveWell apparently relies upon will follow. Meanwhile, I hope and expect Acumen Fund’s “focus on evaluation” will remain primarily on identifying the best targets for its strategy, rather than proving what is plain to see.

    And will we see less disease? Will it be proven that this reduction in disease corresponds to fewer insect bites? Will it be proven that bites were reduced by more bednets from the Acumen Fund partner? And will it be causally proven that Acumen Fund’s focus on distribution there resulted in more bednets reaching customers? Time will tell. And the same kinds of studies will be necessary to prove cause and effect for increased employment, and for reduced poverty. Meanwhile, Holden, it appears that it is clear enough for most reasonable people.

    Now, will you answer my challenge: Can you point to evidence – of any kind, by any yardstick – for a claim like this one?: GiveWell’s failure to find a track record for Acumen Fund’s assertions of success “shows you how much more you can accomplish with your gift” somewhere else.

    I thank you again, sincerely, for your work and attention to my criticism. I think I went too far in saying that it was “poorly done” on your part to conclude that lack of evidence is evidence of the contrary (better places to send contributions). In hindsight, I think you are wrong, but I always understood your effort was well-intended, not poorly done. I’m sorry for that. I also am a strong supporter of micro-enterprise, and if you click on my name it will open my website (, where I introduce a strategy that seeks to combine the larger-scale financing of social enterprise with the tiny-scale of microfinance by creating the “metamarketplace”. I believe this is a sustainable solution for people everywhere, and so for our planet as a whole. Welcome to the future?

  • Kevin, thanks. I don’t believe that this is a compelling case for Acumen Fund’s impact, and I believe that our top charities can make compelling cases for their impact (see our reviews). I recognize that some might disagree and leave it to the reader to decide where they stand.

  • Kevin Parcell on December 15, 2009 at 3:33 am said:

    “Our” doesn’t mean “all” top charities can make compelling cases, and the ones offering the new solutions that the world needs don’t have the track record yet; and yet in this instance, the dramatic evidence from this new, powerful strategy called social enterprise has compelled most people to recognize its value.

  • Kevin, if what you are saying is that the fundraising success of social enterprise investment is tightly connected to compelling people to recognize its value, I disagree.

    Frankly, I think most people who give to the Acumen Fund and similar organizations are giving based on an appealing story and/or an impressive set of people, not on any observation of these organizations’ actual effects on the world. I would guess that for many donors, this video is as far as the “due diligence” goes.

  • Kevin Parcell on December 15, 2009 at 5:33 pm said:

    Holden, what I’m saying is that you are confusing lack of studies of effect with lack of effect.

    Why don’t you simply adjust your conclusions to those supported by the evidence? The fair claim would seem to be that GiveWell has a list of organizations that you like best, and that givers would be unlikely to waste their money supporting them, but not that givers would necessarily do worse elsewhere.

  • Kevin, as I said, I don’t find the evidence presented for Acumen Fund by you or anyone else to be compelling.

    I believe that for an individual/casual donor who does not have their own research capacity, our top charities are a good bet and any other charity is a bad bet (which is not the same as saying that it’s proven to be ineffective).

  • Kevin Parcell on December 16, 2009 at 7:40 pm said:


    Thank you for acknowledging that the organizations GiveWell rates as a “bad bet” might, in fact, be effective.

    I’m heartened to see GiveWell hold itself to the same standard it sets for those it rates. I now trust that your top-rated charities are as effective as you say, and I hope GiveWell will continue to keep in mind that lack of studies supporting new strategies doesn’t mean that those innovations are not just as effective.

    Best regards,

  • RachelKenya on December 17, 2009 at 2:53 am said:

    To start, I have to say I am on side with Holden. Before getting into that, I want to make a specific reference to a comment Jim made about impact studies.

    Spending 10% overheads to run annual or program impact assessments is simply unacceptable for either a non-profit or for-profit enterprise. The dev sector has become too accustomed to accepting these ridiculous figures for field work instead of pushing back on organizations to spend 1-3% on impact studies, which YES, is possible because I conduct many of them every in Africa. Firms & organizations need to stop agreeing to pay consultants $500 – $700 per day and perhaps hire internally. In Africa, a firm can hire a full time employee to write, do research etc.. per annum for the same cost as one consultant-based field report which may or may not be written properly with acceptable M&E and social impact frameworks.

    And as a social entrepreneur, I not only expect but hope that the “3rd sector” is going to be held to a standard of effective reporting rather than having to choose between either the non-profit or the for-profit sectors. If a business model claims social impacts as well as financial (income generation / livelihoods), then it should be prepared to quantitatively or qualitatively report on that impact. If the big boys aren’t prepared to meet this standard, I see us spiraling out of control with a negative impact on the sector as a whole.

    We are a relatively new sector blending the dev sector as well new models of private, personal and donor funding. There are no organizations which monitor our activities (*not a bad thing) so our commitment to transparent and effective reporting standards must be paramount. We can not exist on buzz words alone!

    Unfortunately, it seems like everyone is now a social entrepreneur. For now it is only in forums like this that we question and challenge each other. While I would also like to see more impact studies from Acumen and other funders, they are a relatively new organization in relation to large for-profits or non-profits. In time more lessons will be learned with both capacities and reporting transforming.

    We need to learn from the mistakes of funding transparency in the dev sector, define and meet a high standard. (another Holden blog). If we don’t, I believe our community will eventually burn out and be considered another one-hit wonder by both the for-profit and dev secotrs, both of which continue to be skeptical about our long term viability.

  • kevin Parcell on December 17, 2009 at 9:05 am said:

    Hi Rachel Zedick (

    Holden and I are no longer on opposite sides – we agree that his “top charities are good bets” and not making his good-bet list “is not the same as saying that they are proven to be ineffective”(to quote him).

    For my part I don’t see anything in the rest of your comment that I disagree with or that is related to the point we were discussing. Am I missing something?

  • I agree with much of what Rachel says, but want to disagree on the “10% on evaluation is too much” point. Of course, if stellar evaluation can be done for less, I’m all for it. But I believe that

    • Inadequate evaluation is currently a far bigger problem than overly expensive evaluation.
    • 10% is too much if equally good evaluation can be done for less, but it doesn’t strike me as too much in a cost/benefit sense. I would guess that truly meaningful evaluation can easily double or quadruple the effectiveness of a project (or lead people to move from a completely ineffective project to an effective one).

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