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.

Acumen's 2016 Financial Statements
  • Operating Results

    Revenues

    In 2016, Acumen raised $30.0 million in philanthropic capital, an increase of 26% from 2015. Of the $30.M, $5.0M represents a Partnership grant from the IKEA Foundation to expand our work in bringing off-grid energy solutions to the world’s poor. Acumen recognized non-cash revenue of $1.2 million, mostly in the form of donated legal services, primarily to support our investing work. We received $0.4 million in interest income from portfolio loans, and have a loss provision of $3.2 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 & Program Investments

    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 2016 were $19.9 million, a 7% increase compared to the prior year. Donated services comprise $3.0 million of the $19.9million total. Our increases reflect growth in a number of our program areas including our Portfolio team, our Leadership programs, and our +Acumen course offerings.

    Program work constitutes 75% of our total expenses. Portfolio expenses were $8.2 million, representing the cost of sourcing, due diligence, planning and the execution of $11.4 million in new and follow-on investment disbursements, as well as managing our active portfolio of 67 companies. Outreach, Impact and Communications expenses were $5.0 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 on patient capital. Our Fellows programs have expanded in scope to $1.7 million in 2016 spend, with the Global Fellows program in its tenth year of existence. Fundraising costs and Management and General expense accounted for $5.0 million, which included investments in improving organization efficiency and effectiveness.

  • Statement of Position

    Acumen’s total assets were $117.3 million as of December 31, 2016. Similar to a venture capital fund that raises cash upfront for a multi-year investing period, we ended the year in a strong cash position to support our programs across the organization. $14.4 million of the total balance was restricted and designated for specific programmatic uses or for use as investment capital. We seek to hold at least $10.0 million as our operating reserves.

    Total liabilities at the end of 2016 were $7.0 million, the majority of which were notes payable by Acumen Capital Markets (ACM) to ACM investors. Net assets at the end of the year were $117.3 million compared to $107.6 million at the end of 2015 – a 9.0% increase. There was a restatement of $0.9 million in the 2015 figures from net assets to liabilities (related to deferred revenue in India).

    Total liabilities at the end of 2015 were $6.5 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 $108.5 million compared to $102.0 million at the end of 2014 – a 6.0% increase.

Revenues

In 2016, Acumen raised $30.0 million in philanthropic capital, an increase of 26% from 2015. Of the $30.M, $5.0M represents a Partnership grant from the IKEA Foundation to expand our work in bringing off-grid energy solutions to the world’s poor. Acumen recognized non-cash revenue of $1.2 million, mostly in the form of donated legal services, primarily to support our investing work. We received $0.4 million in interest income from portfolio loans, and have a loss provision of $3.2 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 & Program Investments

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 2016 were $19.9 million, a 7% increase compared to the prior year. Donated services comprise $3.0 million of the $19.9million total. Our increases reflect growth in a number of our program areas including our Portfolio team, our Leadership programs, and our +Acumen course offerings.

Program work constitutes 75% of our total expenses. Portfolio expenses were $8.2 million, representing the cost of sourcing, due diligence, planning and the execution of $11.4 million in new and follow-on investment disbursements, as well as managing our active portfolio of 67 companies. Outreach, Impact and Communications expenses were $5.0 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 on patient capital. Our Fellows programs have expanded in scope to $1.7 million in 2016 spend, with the Global Fellows program in its tenth year of existence. Fundraising costs and Management and General expense accounted for $5.0 million, which included investments in improving organization efficiency and effectiveness.

Acumen’s total assets were $117.3 million as of December 31, 2016. Similar to a venture capital fund that raises cash upfront for a multi-year investing period, we ended the year in a strong cash position to support our programs across the organization. $14.4 million of the total balance was restricted and designated for specific programmatic uses or for use as investment capital. We seek to hold at least $10.0 million as our operating reserves.

Total liabilities at the end of 2016 were $7.0 million, the majority of which were notes payable by Acumen Capital Markets (ACM) to ACM investors. Net assets at the end of the year were $117.3 million compared to $107.6 million at the end of 2015 – a 9.0% increase. There was a restatement of $0.9 million in the 2015 figures from net assets to liabilities (related to deferred revenue in India).

Total liabilities at the end of 2015 were $6.5 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 $108.5 million compared to $102.0 million at the end of 2014 – a 6.0% increase.

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