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TOR138 ― How To Create Lasting Change At Scale With Dr. Kevin Starr Of The Mulago Foundation

Dr. Kevin Starr

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Do you ever have the feeling that your work in the Social Impact sector is akin to “plowing the sea?” That is – despite all of the time and effort you’ve put into your particular program or project, the effects are less than expected or, worse, completely disappear in a relatively short time? This was a lament of Rainer Arnhold, a pediatrician who, despite having helped countless children around the world and dedicating his life to serving others, felt that his work had not produced lasting change. Upon Dr. Arnhold’s untimely death in 1993, his family created the Mulago Foundation in his honor. My guest for the 138th Episode of the Terms of Reference Podcast, Dr. Kevin Starr, who was Rainer’s mentee and serves as the Managing Director of Mulago, has lead the foundation in investments that see to create lasting change at scale. With alumni such as the One Acre Fund, RootCapital and Sanergy, its plain to see they understand what it takes to go the distance.   You can connect with Kevin here:  

IN TOR 138 YOU’LL LEARN ABOUT

  • The origin of Mulago and the Arnhold foundation, to follow an a philanthropic paediatrician’s vision of “lasting change”
  • The three critical issues Kevin saw in social entrepreneurship, and how he tackled them
  • How the reality of some great ideas is that they will always need charitable funding
  • Why you should not expect to make money from saving children’s lives or providing safe water for all
  • The dark, structural issues regarding accountability in social entrepreneurship
  • Why business principles such as efficiency and impact should be embraced by any organization, no matter the kind

OUR CONVERSATION FEATURES THE FOLLOWING

Names:

Topics:

Places

EPISODE CRIB NOTES

Late 2016   02:48 Mulago
  • Kevin was Med freshman
  • Advisors pointed him to Arnhold, pediatrician. He took him under his wing
  • Arnhold and Kevin work on a host of development issues and projects
  • 1993 Mountains of Bolivia Hiking, Arnhold dies of a heart attack.
  • Arnhold’s family had some generations worth investment banking money. They ask Starr to head a philanthropic program in his name, “of which I knew nothing about”
  • Arnhold wanted was to create something with lasting change in his name, as confessed to Kevin his final days
  • About developing world children
  • Arnhold and Kevin were following leads on exactly what that would be like, lasting solutions for developing world’s children, poverty, gaining broader sense
  • Looking at projects, steering them, arises the question for “greatest bang for the buck”, the obsession for impact
06:50 When the obsession paid off
  • Projects had three critical issues:
  • #1 They didn’t seem to be “proactively designed, rather a collection of activities that seemed a good idea and the time”
  • #2 There was not a lot of measurement
  • #3 Organizations were run too business-like
  • The Reinhold Fellows program begins, led by Kevin
  • He takes it as a change to tackle the 3 issues
  • The program morphs into a social entrepreneurship program, it becomes Mulago’s portfolio
  • One of the first was an idea for sustainable farming within 1 acre. It involved market access and credit. He joins as a fellow. “He didn’t even had a team when I first met him”, now he works with over 400,000 farmers, doubling their incomes
  • Kevin was involved early on. “I don’t want to take credit but…” He is a poster child
10:54 Funding
  • “It will always require funding. No one has figured out how to make smallholding self-funded”
  • A fellow, “boy genius” on malaria research on one of Kenya’s poorest regions
  • People are looking to farm. The fellow’s interest shift from malaria from farming income
  • He thinks about trees, reforestation
  • “None of us knew if trees would grow nor if the idea would be sustainable”
  • It took years to realize the model could work, and for funders to be convinced
  • Stephen: If it’s innovative, it also has to look plausible to attract funding
  • Mulago today is 15% equity, 85% grants. “I suspect it will always be that way”
  • Kevin does not believe market solutions nor government solutions can prevail in most extreme poverty conditions
  • “No one is never going to make money saving the lives of infants in Africa. No one’s made money so far ensuring that everyone everywhere gets clean water. Nobody’s making a lot of money educating elementary school kids.”
  • Most of what they do is scaling up via NGOs and government
16:07 Bold statements
  • “There’s a lot of self-congratulatory nonsense in impact investing”
  • “There is a great community out there. We see each other on a very collegial way”
  • Kevin is delighted to engage
  • DRKF takes a similar approach. The programs differ in focus, so fellows participate in programs from both DRKF and Mulago (e.g. Echoing Green, Unreasonable Institute)
  • “It’s a vibrant ecosystem”
  • “I get calls from ‘Big Aid’ on innovation, want social entrepreneurships”
  • ‘Big Aid’ should be replication machines. Let social entrepreneurship be their labs. “Pick up what works and scale it up”
  • “This isn’t what they want to hear. But I deliver it pretty strongly”
  • Kevin would hope it happens.
  • “The field is ineffectual because it is not working as a marketplace”
20:09 What market functions are desired in aid?
  • Stephen: Evaluation measurement
  • Social entrepreneurs should make themselves accountable for impact investing
  • Funders today are “completely unaccountable for impact. No founder has even been fired for lack of impact”
  • “As long as they can raise money, they can survive as zombie organizations”
  • Stephen: Is there an ‘acid test’ for social entrepreneurship impact?
  • “Not yet”. He is working with IPA and Impact Matters on an “Impact Audit Tool”
  • The vision: a “Market for Impact”
  • Most organizations don’t have good evidence for impact
  • “It will get kind of ugly before it gets beautiful”
24:14 On Mulago’s unrestricted funds
  • When you invest on a company, you expect a return, not a say on how every thing is done
  • If you give money to someone is under the expectation that person knows better what to do than you, or you should not give them any
  • “It is also easier”
  • Trust makes the relationship better, healthier
  • It demands better due diligence up front, but it more than makes up
  • Unrestricted funds let team do things better
  • Due diligence in Mulago begins on a relationship that begins where they are starting a solution. They get involved, help priorities and verify alignment, get out to the field often, check up regularly. “We don’t get on boards”
  • “I don’t know why others don’t do it more often”
  • There are “specialist” organizations whose innovation is to further the impact of other organizations
29:13 Has a Mulago innovation become a standard, no-brainer, must have?
  • “Not that many things. Mobile phones, mobile money where it works”
  • Question shifted from ‘do you’ to ‘how do you use mobile’
  • Analytics, data sets, management systems with dashboards and performance metrics”
  • “They are essential in today’s feedback loops” and to manage money
  • What is successful in running a business should be readily adopted in social entrepreneurship
  • Stephen: There is a palpable repulsion against the business mindset
  • “What I mean is to apply sound business principles. You can be fully subsidized, but behave like a business and get things done”
  • A founder that starts a social entrepreneurship looking to dismiss business principles should not be entrusted with donations anymore than with investors’ equity
33:39 Kevin’s stars
  • The Guardian’s Mark Gunther
  • Chris Blattman, U Chicago, IPA
  • Good West Africa fiction
  • The New Yorker
 

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