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Rockefeller launching issues fund

A new nonprofit fund is looking for investors who want to make a global difference.

In partnership with the Cisco Foundation in San Jose, Calif., the Rockefeller Foundation in New York City has hatched the new fund, which will raise money from high-tech and high-net-worth donors, and from other foundations. The money will be invested in a portfolio of nonprofits and commercial firms throughout the world dedicated to making change happen.

The new Acumen Fund aims to launch its initial portfolio this fall, focusing on health and communications, specifically on technologies with the promise of improving the lives of poor people in developing countries.

"What we're trying to find are those innovations around the world that, with a small amount of private investment, can catalyze major public change," said Jacqueline Novogratz, Acumen's chief executive officer.

Like a mutual fund, Acumen will charge investors a fee to cover expenses. It has secured commitments of $8.5 million to subsidize operations for five years until it fully covers its costs through investor fees.

Acumen aims to develop technology-based tools to measure the impact of its investments and help build a network of investors dedicated to innovative change. "The power of the portfolio approach is that it enables us to take the best of the nonprofit and for-profit sectors," said Novogratz. "It also allows us to balance risk among the investments we make, which allows for greater learning and overall impact for the individual investor."

Acumen initially is looking for philanthropists each willing to invest $100,000 over several years. The fund hopes to recruit wealthy donors through a series of private meetings and, later, by direct retail marketing to more modest investors and through partnerships with financial institutions and corporations with employee contribution plans.

Technology will play, a pivotal role at Acumen, which expects to spend roughly $150,000 to create a Web site. The site is being built by Infosys, a firm in Bangalore, India.

Acumen also will move by the end of the summer from Rockefeller's headquarters in midtown Manhattan to its own offices on Wall Street, overlooking the historic Trinity Church, a location that Novogratz said was intended to underscore the fund's mission.

"What Acumen Fund is trying to do is balance intellect and compassion for greater wisdom in philanthropy," said Novogratz, who previously was manager of special projects at Rockefeller.

In that job, she created and directed two big initiatives -- The Philanthropy Workshop, an intensive course for philanthropists in the United States and Argentina, and The Next Generation Leadership Program, which aims to build a core of 21st Century leaders committed to social change.

More than a year in the making, Acumen is modeling itself on venture capital funds but also wants to be deliberate and take however much time it needs to create the portfolio, metrics and technology that will succeed, Novogratz said.

Acumen, for example, initially intended to create and launch five portfolios at once but decided instead to create a single portfolio to test and demonstrate its outcome-based and collaborative strategy, and then add other portfolios over time.

Rather than looking for demonstration projects that deliver services, Acumen's first portfolio will aim to invest in innovative technologies or surgical techniques, such as low-cost hearing aids or intraocular lenses that cure cataract blindness.

"We're at a time in the world where the proliferation of wealth is so extraordinary," Novogratz said. "At the same time, we are seeing this increasing disparity of wealth, not only in this country but between countries. And there's incredible innovation around the world in solving problems.

"What we're trying to do is link individuals who are really serious about using their money to effect change with those innovations, and support that relationship by measuring the change, feeding back and building networks of people around that change."

Advice for wealthy

The rich are getting richer in the United States, and they're looking for a different mix of investment services, including tax and estate planning, advice on transferring wealth between generations and online access to advice, and investing, according to a new report.

Individuals with less than $10 million in assets that can be invested now are considered part of the "mass-affluent" strata, while "high-net-worth," or HNW now describes individuals with $10 million to $50 million, according to the report by Cerulli. Associates, a research firm based in Boston and London.

Banks have lost, market share of high-net-worth assets and "wallet" share of high-net-worth clients in the face of competition from brokerages and smaller registered investment advisors, according to the report, "Trends Among U.S. High-Net-Worth Providers."

It says the key factor differentiating providers of products and services to high-net-worth clients will be "objective advice."

Faith-based investing

Some 12 indexes or mutual funds focused on faith-based investing were launched in the six months through May, according to Carlisle Social Investments in Kennewick, Wash.

That compares to five faith-based indexes or funds launched in the six months through November, 2000, said Carlisle, which itself created two funds during the most recent period that were designed to conform to the 1991 Socially Responsible Investment Guidelines of the National Conference of Catholic Bishops and U.S. Catholic Conference.

Other new funds include:

* Four at Baltimore-based Ark Funds, which screens. for socially responsible issues;

* Four at Winter Park, Fla.-based Timothy Plan Funds, which screens for moral issues;

* Two Dow Jones indexes based on Islamic investment guidelines - one offered by Azzad Asset Management in Falls Church, Va., the other by Allied Asset Advisers in Burr Ridge, Ill.;

* One at the Leviticus 25:23 Alternative Fund in Yonkers, N.Y., which makes loans that benefit poor people;

* One at MMA Praxis Mutual Funds in Goshen, Ind., which follows Anabaptist Christian principles;

* An Islamic communications and information technology fund at Orbitex Asset Management in Nassau, Bahamas;

* A Catholic values fund at Schwartz Investment Trust in Bloomfield Hills, Mich.

Todd Cohen is editor and publisher of Nonprofitxpress, an online news- paper at www.npxpress.com.