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."

“Shareholder value – with the nonprofit sector and government taking primary care of social challenges – is no longer relevant. We need to find new and more creative ways of crowding in the private sector to address these challenges.

This social success note we co-developed with Yunus Social Business. It came to fruition by asking ourselves what it would take to bring the pay-for-performance model to social enterprises and businesses. It’s the first structure of its kind that creates the right kind of incentives for social enterprises and businesses to address on-the-ground needs of poor and vulnerable people in underserved markets. And, it gives donors a fair return on their philanthropic dollars, both financially and in terms of impact.

As we were looking for the right partner to invest in this first pilot and find opportunities for scaling, we were extremely excited to have found the UBS Optimus Foundation. There is no other organization that compares to the UBS Optimus Foundation and we’ve long admired what they’re doing. They are really unique in being able to leverage their own expertise and the resources of UBS to test the new mechanisms needed to mobilize private investment and reach the Sustainable Development Goals.

From a philanthropic perspective, we have two core priorities. First, we want to achieve maximum leverage – where our financial input is additive, bringing in additional investment. Second, we want to make sure the money we put out actually achieves measurable results. This is what is so clever about the social success note. 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. So far, it has been very difficult to create a market rate return for investing in impact, except for very few cases. The hope here is that, at scale, you can create these new kinds of partnership models between philanthropists, investors, and social enterprises and businesses in a way that aligns interests, where no one feels they are sacrificing something, to collectively address big challenges.”

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

Impact Water is a global social business which provides safe water solutions to schools. Impact Water Uganda, the flagship office launched in 2014, has paved the way for the business to reach over 30,000 schools and 12m students globally.

A long-term commitment to each school is central to the venture, as is performance-based finance and risk-sharing with impact investors to maximize affordability.

The Rockefeller Foundation advances new frontiers of science, data, policy and innovation to solve global challenges related to health, food, power and equity & economic opportunity. As a science-driven philanthropy focused on building collaborative relationships with partners and grantees, The Rockefeller Foundation seeks to inspire and foster large-scale human impact that promotes the well-being of humanity throughout the world by identifying and accelerating breakthrough solutions, ideas and conversations. For more information, visit

Socio-economic Data Centre Ltd (SEDC) is a private firm based in Uganda, whose core business is providing research, monitoring, evaluation, project management and capacity building services to government, private business, civil society and international development organizations. SEDC undertakes baseline studies, mid-term reviews, impact assessments, end of project/programme evaluations, strategic planning, training needs assessments, institutional capacity assessments, project management and other organizational development related tasks. SEDC’s experience spans a wide range of sectors including health, education, water and sanitation, governance, social protection, child protection, livelihoods, institutional development, and poverty reduction. SEDC blends mainstream as well as innovative and participatory research approaches to deliver meaningful results that can have policy and practical impact. SEDC’s team have extensive experience working in East and Southern Africa regions.

The UBS Optimus Foundation connects its clients with inspiring entrepreneurs, new technologies and proven models that are making a measurable, long-term difference to the most serious and enduring social and environmental problems. The only client-facing Foundation linked to a global wealth manager, UBS Optimus Foundation has a long track record and is recognized globally as a philanthropic thought-leader. It takes an evidence-based approach and focuses on programs that have the potential to be transformative, scalable and sustainable. This gives clients the reassurance that they are funding innovative projects that have a stronger chance of achieving all-important systemic change. UBS also makes matching contributions to the Foundation, ensuring clients' donations will go even further.

Yunus Social Business believes in harnessing the power of business to eradicate urgent human problems. Its Philanthropic Venture Fund invests in impactful and profitable social businesses that are 100 percent focused on solving problems such as poverty, inequality and the climate crisis. Yunus Social Business turns donations into investments in social businesses, which it reinvests over and over again, multiplying the impact each time. Its long-term, patient loans and hands-on growth support are delivered by its teams of local professionals, allowing its portfolio of social businesses to flourish. Yunus Social Business regularly plays a coordinating role in cross-sector collaborations. Under its Corporate Innovation arm, Yunus Social Business has also guided some of the largest multinationals to apply their core competencies to some of the greatest human challenges.

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