Financial Information

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2010 Financial Overview

Acumen Fund has a complex financial structure. We report our statement of position 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

A. Revenues

In 2010 Acumen raised $13.4 million in philanthropic capital, an increase of 111% over the prior year. In addition, we had non-cash revenue of $1.6 million in donated legal services, primarily to support our investing work, as well as donated office space. We received $0.7 million in interest from portfolio loans, and have a loss provision of $1.5 million for portfolio investment losses, representing a conservative valuation policy. Acumen Fund carries our program investments at cost, and we lower these valuations when an impairment exists. 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 investment.

B. Operating Expenses and 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 program investments in our portfolio companies. Total expenses for the 2010 year were $10.1 million - a decrease of 18% over the prior year. The bulk of the decrease was the result of the conclusion of a large research initiative on water distribution conducted from 2008-2009 in collaboration with IDEO.org and the Gates Foundation.

Program work constitutes 77% of expenses. Portfolio expenses were $5.3 million, representing the cost of finding, diligencing and executing $13.3 million in new investment approvals as well as managing our active portfolio of 43 companies. Outreach, Knowledge and Communications expenses were $1.7 million, representing our work in metrics, research, and sharing our insights on patient capital investing. Our global fellows program, in its sixth year, had the same costs as the prior year of $0.7 million. Fundraising costs and Management and General expense accounted for $2.3 million, a 7% decrease from 2009. These overhead costs continue to be funded entirely by Acumen’s Board of Directors.

Statement of Position

Acumen Fund’s total assets were $95.3 million as of December 31, 2010, a 5% increase over 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, largely the result of a significant capital raise we conducted in 2007-2008. $20.6 million of the cash we hold is restricted, designated for a specific use or committed to undisbursed investment tranches, and $7.0 million is held as an operating reserve, leaving $20.5 million for impact investing in future years or for programmatic spending. Multi-year pledges receivable continue to be collected on a timely basis and converted into cash, resulting in a $4.6 million (22%) drop in pledge balances over the prior year. Acumen grew its portfolio assets by $4.3 million or 17% in 2010 after providing for $1.5 million in potential impairment.

Total liabilities at the end of 2010 were $5.7 million, a 14% decrease from 2009. $5.1 million of the $5.7 million of liabilities are notes payable by Acumen Capital Markets (ACM) to ACM investors. Net assets at the end of the year were $89.6 million compared to $84 million at the end of 2009, a 7% increase.

2009 Financial Information

2008 Financial Information