Acumen | Financial Overview -

Financials

Acumen Financial Overview

We report our statement of activities as a nonprofit, reflecting contributed 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

    In 2018, Acumen raised $36.7 million in philanthropic capital, an increase of 22.5% from 2017. Of the $36.7 million, $7.8 million represents grants to fund our Pioneer Energy Investment Initiative which seeks to bring off-grid energy solutions to the world’s poor. Acumen recognized non-cash revenue of $1.7 million, mostly in the form of donated legal services, primarily to support our investing work.

    We received $0.5 million in interest income from portfolio loans and recorded a provision of $2.5 million for portfolio investment losses. Acumen carries our program investments at cost, and we lower these valuations when impairment exists. We review our portfolio of assets on an annual basis and apply a consistent valuation philosophy across the companies in our portfolio. Because we carry these investments at cost, we do not mark up our equity investments to fair market value, even when subsequent funding rounds imply an increase in the holding value of our investments. Any increase in value of equity investments would be recognized as realized gains or profits upon exit.

    Operating expenses represents all the direct costs related to the running of Acumen 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 2018 were $23.7 million, a 10.7% increase compared to the prior year. Donated services expenses (a direct offset to In-kind contributions) comprise $1.7 million. Our increases reflect growth in a number of our program areas including our Portfolio team, our Leadership Fellows programs, and our +Acumen course offerings.

    Program work constitutes 73.6% of our total expenses. Portfolio expenses were $7.9 million, representing the cost of sourcing, due diligence, planning and the execution of $5.8 million in new and follow-on investment disbursements, as well as managing our active portfolio of 83 companies. Outreach, Impact and Communications expenses were $7.4 million, representing our work in measuring and reporting our investment performance (both financial and non-financial), and in the research and sharing of our insights gleaned from our programmatic work. Our Leadership Fellows program expenses were $2.1 million, a decrease of 7.7% from 2017. Fundraising costs and Management and General expense accounted for $6.3 million, which included investments in improving organization efficiency and effectiveness.

     

  • Statement of Financial Position

    Acumen’s total assets were $145.8 million as of December 31, 2018. Acumen’s assets are split primarily between Operating Assets ($81.7 million) and Portfolio Assets ($64.1 million). The largest component of our Operating Asset is our cash balance of $51.1 million, where $22.7 million of the total balance represents cash that is restricted and designated for specific programmatic uses or for use as investment capital.

    Total liabilities at the end of 2018 totaled $8.0 million, the majority of which were notes payable by Acumen Capital Markets I, LP (“ACM”) to ACM investors. Net assets at the end of the year were $137.8 million compared to $124.6 million at the end of 2017, a 10.7% increase.

In 2018, Acumen raised $36.7 million in philanthropic capital, an increase of 22.5% from 2017. Of the $36.7 million, $7.8 million represents grants to fund our Pioneer Energy Investment Initiative which seeks to bring off-grid energy solutions to the world’s poor. Acumen recognized non-cash revenue of $1.7 million, mostly in the form of donated legal services, primarily to support our investing work.

We received $0.5 million in interest income from portfolio loans and recorded a provision of $2.5 million for portfolio investment losses. Acumen carries our program investments at cost, and we lower these valuations when impairment exists. We review our portfolio of assets on an annual basis and apply a consistent valuation philosophy across the companies in our portfolio. Because we carry these investments at cost, we do not mark up our equity investments to fair market value, even when subsequent funding rounds imply an increase in the holding value of our investments. Any increase in value of equity investments would be recognized as realized gains or profits upon exit.

Operating expenses represents all the direct costs related to the running of Acumen 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 2018 were $23.7 million, a 10.7% increase compared to the prior year. Donated services expenses (a direct offset to In-kind contributions) comprise $1.7 million. Our increases reflect growth in a number of our program areas including our Portfolio team, our Leadership Fellows programs, and our +Acumen course offerings.

Program work constitutes 73.6% of our total expenses. Portfolio expenses were $7.9 million, representing the cost of sourcing, due diligence, planning and the execution of $5.8 million in new and follow-on investment disbursements, as well as managing our active portfolio of 83 companies. Outreach, Impact and Communications expenses were $7.4 million, representing our work in measuring and reporting our investment performance (both financial and non-financial), and in the research and sharing of our insights gleaned from our programmatic work. Our Leadership Fellows program expenses were $2.1 million, a decrease of 7.7% from 2017. Fundraising costs and Management and General expense accounted for $6.3 million, which included investments in improving organization efficiency and effectiveness.

 

Acumen’s total assets were $145.8 million as of December 31, 2018. Acumen’s assets are split primarily between Operating Assets ($81.7 million) and Portfolio Assets ($64.1 million). The largest component of our Operating Asset is our cash balance of $51.1 million, where $22.7 million of the total balance represents cash that is restricted and designated for specific programmatic uses or for use as investment capital.

Total liabilities at the end of 2018 totaled $8.0 million, the majority of which were notes payable by Acumen Capital Markets I, LP (“ACM”) to ACM investors. Net assets at the end of the year were $137.8 million compared to $124.6 million at the end of 2017, a 10.7% increase.

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