How we fund

How we fund

Mulago looks for organizations built around a big idea and focused on maximum social impact. We fund on the basis of:

A priority problem

We focus on four elements of a better life: livelihoods, health, education, and conservation. The vast majority of the world’s poorest people live in rural settings in developing countries, so that is where we concentrate our resources. Our priorities are:

  • Rural livelihoods, especially in smallholder agriculture
  • Basic health care and health behavior change
  • Natural resource conservation in settings of poverty

Within these areas we've noticed especially promising social innovations, and have started to cluster our investments around them:

  • Peer-to-peer behavior change
  • Business-in-a-box” income solutions, especially for smallholder farmers
  • Distribution strategies and channels for high-impact products and services
  • Conservation incentive agreements that compensate poor people for the opportunity costs of conservation

A scalable solution

Mulago finds and funds solutions that can benefit at least a million people - save a million babies, get a million families out of poverty, provide a million kids with a decent education. Based on our experience, we’ve developed a set of five criteria for what makes a solution likely to produce lasting change that will go to scale:

1. Real impact

Work without real impact shouldn’t scale up. We don’t invest in organizations that don’t measure impact – they’re flying blind and we would be too. We’ve developed an approach to measuring impact that is simple enough to do, but rigorous enough to mean something.

2. Bang for the buck

Solutions that are too expensive can’t scale. We calculate the cost per key impact in all organizations we fund. With a thorough knowledge and consideration of context, these calculations provide a useful guide for investment choices.

3. Lasting behavior change

Impact comes from behavior – from people doing things differently. For a given solution, we look systematically at the behaviors that drive impact to determine whether the conditions and motivations are there to make behavior last and continue to generate impact.

4. Easy replication

A model that is complicated is difficult to scale. Scalable solutions deliver a focused big idea in a systematic way, adapt to a broad array of settings, and don’t have too many moving parts.

5. Right path to scale

There are five paths to the kind of scale we’re talking about – namely, via the market, governments, growing a really big organization, co-opting other NGO’s, or viral spread of behavior change. We haven’t seen any others and each has its pros and cons. We look at whether the organization is thinking clearly about a path to scale and whether their model fits and can deliver via that path.

An organization that can deliver

The best organizations pursue maximum impact in a business-like fashion, so we evaluate them as “businesses that lose the least money possible.” For us, the most important things are the quality of leadership and the pace of progress to date. More than anything, we look for evidence that leaders are paying systematic attention to what’s going on and know when to change course.

We also look for:

  • A credible and ambitious business plan that includes a promising strategy for impact at scale
  • A demonstrable ability to raise or earn money
  • An organizational chart that makes sense, with the right people in key positions
  • Efficient financial and management systems

We like to drive innovation that will fill critical gaps, so we fund mostly early stage organizations, but we also invest in key proven solutions and the organizations taking them to scale. We operate like a philanthropic venture fund with proven impact as an analog for profit, and cost-per-impact for return on investment. We want the biggest bang for our buck with the least hassle for us and for those we fund. This means:

Unrestricted money

Unrestricted funding is the most useful for the organization and the most leveraged for the donor. If we don’t think they know how to use the money better than we do, we shouldn’t give them any.

Continued funding for increasing returns

We don’t abandon a good thing. If we continue to see real impact and clear progress toward scale, we stay in the game.

No proposals

We don’t take proposals. Proposals are a hassle for all concerned and rarely give us the information we need. We use an extensive network to feed us organizations that meet our very specific criteria. Us finding them rather than them asking us makes for a healthier relationship that is more productive and more fun.

Focused milestones

A collaborative annual milestone process sets mutual expectations for the year ahead. We want no more than ten milestones in three categories: program/product delivery, building the organization, and impact. The limited number makes the process simpler; more importantly, it makes everyone think hard about priorities.

Minimal hassle

The last thing we want is to waste the time and energy of those who are trying to save the world. So. We don’t take proposals. We gather the specific information that we need. The due diligence documents we require are things that organizations should already have on hand, including a business or strategic plan, financials, organization chart, top-five donor list, and board attendance. Formal reporting is confined to the streamlined milestones process.

Staying in touch

We don’t like surprises. We go to the field several times a year. We connect everyone in the portfolio to our network of friends and funders. They call us, we call them, they stop by our office to brainstorm. The annual review is usually a process of confirming what we already know.