A win-win situation: Social Success Note

Aligning interests with impact loans

Our partnership with Yunus Social Business, the Rockefeller Foundation and Impact Water has yielded the first social success note, an innovative pay-for-performance financing solution to drive return-seeking capital to social businesses looking to address the world’s most entrenched challenges.

Social Success Note Playbook

Aiming to be a functional tool for the entrepreneurial ecosystem, this playbook addresses the why, what and how of SSNs, along with a few case studies, challenges and opportunities revolving around these nascent financing tools.

Installing and maintaining water filtration systems in Uganda

This world's first social success note blends funds from donor organizations, governments and private debt and equity. It aims to sell and install 3,600 water filtration systems in Ugandan schools. If successful, it will provide 1.4 million school children with clean water over the next five years.

The program of the Social Success Note is driven by Impact Water, a social business that sells, installs and maintains water filtration systems in Uganda. Impact Water will borrow funds from UBS Optimus Foundation. As an innovation to the loan structure, the Rockefeller Foundation will provide an outcome payment for each filtration system. About 400 school children in Uganda will benefit from only one filtration system. The WHO estimates such improvements can reduce absenteeism by three days per student per year.

The problem the social success note seeks to address

Clean drinking water in schools is essential if students are to stay healthy and ready to learn and fulfill their potential. Unfortunately, access to clean drinking water is a critical issue in Uganda, as is the case across sub-Saharan Africa. The key barrier to installation of clean water systems at schools is the need for financing and lack of opportunities to access it. The consequences are grave – especially for young children who are the first to get sick and die from waterborne and sanitation-related illnesses such as diarrhea and malaria. Schools are often a source of disease transmission, where adequate supplies of safe drinking water are either non-existent or inadequate.


More than a billion people do not have access to safe water.1


Well over two billion people live without adequate sanitation.2


One third of the population lack access to safe water.3


More than half of the developing world’s population is suffering from main diseases associated with unsafe water and poor sanitation.4


Every day, 6,000 children die of water-related diseases.5


In Uganda 440 children die every week due to waterborne diseases.6


40% of diarrhea cases in school children result from transmission in schools rather than homes.7

"With relatively small grant capital, we can bring in multiples of that in private investment in a way that makes sure philanthropic dollars will only be paid out if the social impact we’re looking to achieve is actually realized."

The solution

Impact Water Uganda has a solution. The social business installs and maintains environmentally-friendly UV-based water purification systems to schools. It is doing that by providing financing to these schools over a period of one to two years with five payment terms aligned with school terms. This allows schools to offer clean water limiting waterborne disease among children, while paying off their loan when they receive school fees. This is also a way of how schools can avoid burning wood for boiling water and therefore offsetting CO2 emissions.

Aligning the interests of investor, social enterprise and outcome payer to impact and returns, the Impact Water social success note is helping IWU expand in Uganda.

The social success note partners

How it works in practice

  1. The UBS Optimus Foundation provides a USD 500,000 five-year loan to Impact Water, with a 24-month grace period.
  2. Impact Water Uganda uses this investment capital to provide schools with clean water.
  3. Throughout the five-year program, independent verifier, SEDC will monitor the results against pre-determined targets.
  4. The Rockefeller Foundation pays an outcome payment depending on Impact Water Uganda's ability to meet impact targets.
  5. The UBS Optimus Foundation will receive part of the outcome payment, increasing its a return on the loan
  6. At the same time Impact Water. received the balance of the outcome payment reducing the cost of its loan to UBS – ensuring all partners interests are aligned.

Possible outcome scenarios

Due to their impact focus and inherently smaller margins, raising financing to reach scale has proven to be difficult for Impact Water. This is because social enterprises and businesses focused on addressing tough and entrenched challenges often operate in situations where there are significant market failures that result in lower returns to investors. And hence social and environmental impact is often sacrificed for financial return. The social success note is changing the status-quo. The more impact Impact Water achieves, the lower its costs and the higher the return for the UBS Optimus Foundation, rising up to 9 percent. The outcome payer, the Rockefeller Foundation, benefits from leveraging its philanthropic funding 2.5x.8



Investor return

Outcome payment

Impact Water interest rate







Partial success






Failure (able to service loan)






Failure(unable to service loan)


Loss of principal