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 2021, Acumen raised $28.5 million in philanthropic capital, an increase of 14.9% from 2020. Acumen recognized non-cash revenue of $4.5 million for strategic consulting services and donated legal services to support our investing work.

    We received $1.1 million in interest income from portfolio loans and recorded a loss provision of
    $1.0 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 2021 were $30.7 million, a 7.5% decrease compared to the prior year due to a decrease in Covid-19 Emergency Relief grants. Donated services totaled $4.5 million. Program work constitutes 81.1% of our total expenses. Portfolio expenses were $14.8 million, representing the cost of sourcing, due diligence, planning and the execution of $13.1 million in new and follow-on investment disbursements, as well as managing our active portfolio of 155 companies.

    Outreach, Impact and Communications expenses were $4.1 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 program costs decreased by 14.4% in 2021 with expenses of $6.0 million. Fundraising costs and Management and General expense accounted for $5.8 million, which included investments in improving organization efficiency and effectiveness.

  • Statement of Financial Position

    Acumen’s total assets were $158.4 million as of December 31, 2021. Acumen’s assets are split primarily between Non-Portfolio Assets ($73.2 million) and Portfolio Assets ($85.2 million). The largest component of our Non-Portfolio Asset is our cash and restricted cash balances totaling $57.9 million, where $24.8 million (42.8%) of the total balance was restricted and designated for specific programmatic u ses or for use as investment capital.

    Liabilities at the end of 2021 totaled $9.3 million, comprising conditional cash advances and returnable grants used for portfolio investments under the East Africa Education Initiative. Net assets at the end of the year were $149.2 million compared to $145.2 million at the end of 2020—a 2.7% increase.

In 2021, Acumen raised $28.5 million in philanthropic capital, an increase of 14.9% from 2020. Acumen recognized non-cash revenue of $4.5 million for strategic consulting services and donated legal services to support our investing work.

We received $1.1 million in interest income from portfolio loans and recorded a loss provision of
$1.0 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 2021 were $30.7 million, a 7.5% decrease compared to the prior year due to a decrease in Covid-19 Emergency Relief grants. Donated services totaled $4.5 million. Program work constitutes 81.1% of our total expenses. Portfolio expenses were $14.8 million, representing the cost of sourcing, due diligence, planning and the execution of $13.1 million in new and follow-on investment disbursements, as well as managing our active portfolio of 155 companies.

Outreach, Impact and Communications expenses were $4.1 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 program costs decreased by 14.4% in 2021 with expenses of $6.0 million. Fundraising costs and Management and General expense accounted for $5.8 million, which included investments in improving organization efficiency and effectiveness.

Acumen’s total assets were $158.4 million as of December 31, 2021. Acumen’s assets are split primarily between Non-Portfolio Assets ($73.2 million) and Portfolio Assets ($85.2 million). The largest component of our Non-Portfolio Asset is our cash and restricted cash balances totaling $57.9 million, where $24.8 million (42.8%) of the total balance was restricted and designated for specific programmatic u ses or for use as investment capital.

Liabilities at the end of 2021 totaled $9.3 million, comprising conditional cash advances and returnable grants used for portfolio investments under the East Africa Education Initiative. Net assets at the end of the year were $149.2 million compared to $145.2 million at the end of 2020—a 2.7% increase.

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