Financial Overview

Acumen Fund has a complex financial structure. We report our statement of activities as a nonprofit, reflecting contribution revenues and expenses – program and administrative – each year. Unlike most charities, however, we invest a substantial portion of our assets in entrepreneurial businesses that serve the poor. These investments, conceptually equivalent to the grants made by other nonprofits, stay on our balance sheet and are not reflected as part of our program expenses on our statement of activities.

Operating Results

Revenues

In 2013, Acumen raised $15.7 million in philanthropic capital, an increase of 57% from the prior year, $3.0 million of this was due to a grant we received for our expansion work in Latin America. In addition, we had non-cash revenue of $1.1 million in donated legal services, primarily to support our investing work, as well as donated office space. We received $1.3 million in interest from portfolio loans, and have a loss provision of $4.8 million for portfolio investment losses, representing a conservative valuation policy. Acumen Fund carries our program investments at cost, and we lower these valuations when impairment exists. In an effort to air on the conservative side, we do not mark up our equity investments to fair market value, even when our holdings increase in value in subsequent funding rounds. We only realize gains or profits when we exit an equity investment.

Operating Expenses & Program Investments

Operating expenses cover all the direct costs of running Acumen Fund programs as well as our management and general and fundraising costs. They do not reflect any of our investments in our portfolio companies. Total expenses for the 2013 year were $13.0 million, which was a 2% increase compared to the prior year.

Program work constitutes 66% of expenses. Portfolio expenses were $5.0 million, representing the cost of sourcing, due diligence, planning and the execution of $12.3 million in new investment approvals, as well as managing our active portfolio of 48 companies. Outreach, Impact and Communications expenses were $2.2 million, representing our work in measuring our performance metrics, and the research and sharing of our insights on patient capital. Our Fellows programs have expanded in scope to $1.4 million in spend, with the Global Fellows program in its ninth year and Regional Fellows programs in East Africa, India and Pakistan.  Fundraising costs and Management and General expense accounted for $4.4 million with investments in improving organization efficiency and effectiveness.

Statement of Position

girl in field Drip IDE

Acumen Fund’s total assets were $107.2 million as of December 31, 2013, which was 4% increase from the prior year. Similar to a venture capital fund that raises cash upfront for a multi-year investing period, we have a strong cash position. $17.8 million of the cash we hold is restricted and designated for a specific use or committed to undisbursed investment tranches. $9.9 million is held as an operating reserve, leaving $21.2 million for our program spend in future years, including our philanthropic investing.

Total liabilities at the end of 2013 were $5.8 million, the majority of which are notes payable by Acumen Capital Markets (ACM) to ACM investors. Net assets at the end of the year were $101.4 million compared to $96.3 million at the end of 2012 – a 5.3% increase.

PDF of audited financial statements for December 31, 2013

PDF of IRS Form 990 for December 31, 2013