In Conversation with Jacqueline Novogratz — Purpose over Profit
Pragyna Divakar
This Wednesday, Ashoka University hosted a talk with Jacqueline Novogratz, founder and CEO of Acumen, a not-for-profit impact investment fund that invests in social entrepreneurs who aim to alleviate poverty. The talk was moderated by Ashish Dhawan, founder and CEO of Central Square Foundation and one of the spearheads of the launch of Ashoka University.
Novogratz holds a dual degree in economic and foreign affairs from the University of Virginia and received her MBA from the Stanford Graduate School of Business. After three years in banking, she decided to change her career to that of social entrepreneurship, opening the first microfinance institution in Rwanda. She also worked in the Rockefeller Foundation before starting Acumen in 2001.
Acumen was started as an investment fund that was solely focussed on the impact of their investments on the world. Novogratz was disheartened by the single-minded focus of banks on profit without consideration for the cost at which that profit was being enjoyed. When asked for her opinion on companies that have jumped on this bandwagon and branded themselves as impact-oriented without having much commitment to it, Novogratz responded that not all investments in countries like Africa and South Asia can be called impact investments. She insists on money being seen as a tool and as not a solution in itself. Novogratz calls markets as “the best listening device we have”. While markets provide valuable information on what people are willing to pay for, there needs to be cooperation between markets, social entrepreneurs, and governments to produce lasting change.
Acumen has made significant investments in India in various sectors such as healthcare and sanitation. Novogratz spoke of ZHL, an ambulance service that was founded in Mumbai with the aim of bridging the gap in emergency care between India and the US. Acumen was an early and hesitant investor, considering the project “aspirational”. But today, the company has nearly a thousand ambulances and has served over 4 million people. Another entrepreneur of note is Suhani Mohan, a graduate of Acumen’s Fellowship program. Mohan co-founded Saral Designs, an enterprise that provides good quality and cost-effective menstrual hygiene solutions while also dispelling the myths around menstruation. She has travelled across rural India to educate women and find effective channels of distribution for her products.
Novogratz is a firm believer in investing in the character of the entrepreneur. She knows how incredibly difficult and tedious social entrepreneurship can be and therefore, Acumen is always looking for driven individuals who are doing it for the right reasons. As an equity holder, Acumen has a real stake in the companies they have invested in but even more so in the people, they have chosen to put their trust in. Novogratz asserts that, as the next generation of social change, we must start seeing the world as being defined by human energy and potential, not as one with which we have a one-way, transactional relationship.
