Investment Fund Aims to Reduce Income Inequality in the U.S.
(3BL Media/Justmeans) – Nearly 15 percent of Americans fall below the poverty line, which is set at about $24,000 a year for a family of four. Historically, foundations have helped the disadvantaged by granting money to nonprofits to provide social services. But now, some are supporting for-profit enterprises that aim to bridge the glaring income gap between those at the top and the bottom of the pyramid.
Acumen, a New York-based nonprofit global venture fund, has announced it has begun investing in U.S. startups aimed at serving underprivileged Americans. Its first two portfolio companies are WorkAmerica, a technology platform that connects community college students to employers, and Healthify, which enables healthcare providers in low income communities to fully address the needs of their patients.
Acumen America is a small fund with $7 million to invest, funded by grants from the Hitachi Foundation, the Robert Wood Johnson Foundation and Barclays. While it wants its investments to create jobs, its broader purpose is to support businesses that deliver goods and services to low income customers. Jacqueline Novogratz, founder and CEO of Acumen, said that the challenge is how to get more entrepreneurs to focus on, not improving lives for the wealthy, but solving some of the pressing social issues.
Acumen’s investment in Healthify, a Baltimore-based startup that supports hospitals and clinics to connect patients to social services, reflects the fact that healthcare by itself cannot help the most vulnerable get better. Investments are needed in companies that provide healthy foods or improve social cohesion in poor neighborhoods.
WorkAmerica provides placement services in Washington for community colleges to connect graduates to jobs in fields such as nursing, information technology and manufacturing. Acumen is also looking at investing in companies that provide financial services to low income and unbanked Americans.
Taking a business-friendly approach to poverty alleviation has won Acumen friends across the political spectrum. According to Novogratz, the fund has some investors who are part of the Cato Institute, and some of the investors are highly liberal.
Source: The Guardian
Image Credit: Flickr via eBay CS Events