Kevin Starr runs the Mulago Foundation, which funds social enterprises tackling poverty and development challenges around the world. His recent article (https://ssir.org/articles/entry/no-such-thing-as-impact-investing) in the Stanford Social Innovation Review makes a sharp, useful point:
"There is philanthropic investing, and there is commercial investing, and there is nothing in between."
We agree with him.
Too much of what gets called "impact investing" has drifted into a space that isn't really either, intentions without the concessions to back them, as Starr puts it. That's a fair challenge to the sector, and one worth sitting with.
What we want to add comes from where we spend our time: alongside the entrepreneurs on the other side of that investment decision.
Money opens the door. Capability is what walks through it.
Across our work with entrepreneurs in the UK, East Africa and Southern Africa, we keep seeing the same pattern. Access to finance is a real barrier, and many enterprises struggle without it. But finance on its own rarely goes far enough, and it delivers more when enterprises also have the business support to put it to work.
In Uganda, 350 young women entrepreneurs took part in tailored enterprise support through the 10X programme. 270 of those businesses went on to improve their performance. Together, they created 562 jobs.
In Rwanda’s We Can Work programme, almost 200 enterprises received enterprise support and access to finance together. Neither on its own would have achieved the same result. The finance opened opportunity, and the enterprise support helped businesses turn that opportunity into growth.
In Malawi’s Trade project, our work strengthened the beef value chain, not through grants alone, but by helping farmers build commercial relationships with buyers, strengthen their organisations, and manage their finances. Farmers who'd always seen cattle as a store of wealth started running them as a business.
Across RISE/E delivered in Ghana, Uganda, Tanzania and Zambia, the first cohort of enterprises we supported created 419 jobs, reached 1,109 new customers, 128 grew their revenue and 121 became more profitable and with our support accessed over US$116,000 in external finance. .
Notice where that finance sits in the list. Not first. It arrives once the business is ready to use it well.
This is where we think we can build on Starr's argument, not push against it.
If the real gap isn't capital, it's readiness to deploy capital, then enterprise support isn't a nice to have that sits beside the investment conversation. It's part of what makes the investment work.
Investment committees ask: can this team execute? Do they understand their customers? Are the financials credible? Can governance support growth?
Those aren't really investment questions. They're enterprise development questions, and they're exactly what we spend our time on.
So, we'd frame the opportunity slightly differently.
Not, is impact investing real? Starr's right that the space between philanthropic and commercial capital is often overclaimed.
But, what's the fastest way to get more enterprises into a position where commercial capital genuinely makes sense for them?
We think that's a question the whole ecosystem, investors, funders and organisations like ours, can usefully work on together. We'd welcome the conversation.
Kevin Starr's article challenges the impact sector to rethink its assumptions, and we should accept that challenge. But we should also broaden the conversation. Capital matters, but without investment in entrepreneurial capability, capital alone rarely delivers the positive impact we all want.
