Basics of the Global Fund:

The Global Fund to Fight AIDS, TB and Malaria is a multilateral funding mechanism that was founded in 2001 to streamline funding to the poorest countries for AIDS, tuberculosis, and malaria. To date, it has distributed nearly $15 billion in aid to 140 countries. It uses a model where wealthy countries and the private sector make donations, and poor countries apply for grants for programs directly affecting people with HIV, TB and affected by malaria.

Countries applying submit their grant proposals to the Global Fund’s Technical Review Panel, which recommends funding for the most technically sound grants to the Global Fund’s Board. The Board is made up of representatives from wealthy countries like the US, recipient countries, the private sector, foundations, and civil society, including people from communities living with HIV, TB and affected by malaria.

Grant proposals are for five years, divided into Phase I (years one and two), and Phase II (years three through five). After a country has completed Phase I, the grant performance is reviewed, and, if the Board decides that the grant recipients are implementing the proposal well, they approve funding Phase II. 

What led to the Global Fund’s Funding Crisis:

Prior to 2008, the Global Fund had an average of one round of funding per year. In April 2007, the Board, including the United States representative, voted to increase the overall amount of money the fund distributes to $6-8 billion per year, and double the number of funding rounds.

The Fund’s 8th funding round, which closed in the Fall of 2008, was three times the size of Round 7. This was due to an increased number of higher quality and larger applications than in the past. The total amount recommended for funding for Round 8 was more than $3 billion for the first phase of funding (years one and two of grants). Because this was three times the size of Round 7, if Round 8 is funded at the recommended levels, very little money would be left for future rounds.

In November 2008, the Board made several important decisions to deal with the shortfall in available resources.

• All grants approved for funding in Round 8 will have to take 10% “efficiency” cuts to their budgets.
• Round 9 was postponed by six months to be the only round in 2009, and is closing in Fall 2009.
• Phase II (years three through five) of existing and future grants will be cut by 25% unless additional funding is secured before May 2009. Phase II is the time when countries are taking local programs and scaling them up to regional or national programs, and the required 25% cut in the size of the grant will directly relate to fewer services provided.
• If a grant performs exceptionally well during its five years, then it is eligible for six more years of funding. This is a time when countries expand programs even further. But the Board voted to cap the amount of money that a country with a well-performing grant can apply for at 140% of the amount of money for the first five years. Before this cut, countries could apply for as much as they needed to scale up programs. Again, this cut will have direct consequences on the ground – with fewer people receiving HIV, TB and malaria services.

The Global Fund’s Executive Director has stated publicly that there is a $5 billion shortfall in available funding to cover upcoming Phase II renewals, and Rounds 9 and 10. This is due to the fact that rich countries, including the United States, have not kept pace with increasing demand from countries.  

The US is on track to contribute between $840 and $900 million for 2009, which is about $1 billion less than its fair share. Since major cuts to existing and future grants will be required if additional funding is not pledged by May 2009, the US needs to support providing an additional $1 billion to the Global Fund in any supplemental spending bill that comes up in the first half of 2009. If the US contributes more, historically other countries also contribute more, so increasing US financial support for the Fund will help leverage additional contributions from other wealthy nations as well. Additionally, in 2010, the US should contribute $2.7 billion, which is our fair share to meet the growing needs of countries affected by HIV, TB and malaria. 

What happens if The Global Fund’s Funding Crisis is not solved?

The Global Fund, and especially civil society and advocates, have been working with countries to get them to send in bigger, and better, grant proposals. In the past, countries have not submitted larger grants out of fear that they would be wholly rejected due to their size. In Round 8, countries stepped up and submitted the best quality, and largest, grants to date. To not come through and support these bold proposals would break the trust that the Fund has developed with countries, and the Global Fund might not recover from this.

The Global Fund provides treatment to two million people with HIV around the world. HIV treatment cannot be started without a commitment to continue. If someone living with HIV stops taking medicine, then they will become resistant and have to take more expensive, second-line medicine. And, once a person becomes resistant to all existing medication, then they have no more options and will likely die.

The Global Fund has always supported what is needed from countries. Unlike many other sources of funding, where the amount of money fluctuates each year, the Fund intends to be around for the long haul. If rich countries allow the Fund to fall short, it sets a dangerous precedent for future years of Global Fund supported programs.

The wealthiest countries have repeatedly committed to achieving universal access to HIV prevention, treatment and care in poor countries. Universal access will not be achieved unless the Fund continues to grow in size, which requires rich countries to continue to support it at increasing levels.

While the Global Funds resource shortfall is not linked with the global financial crisis, except that they coincidentally occurred at around the same time, the wealthiest countries may respond by reducing foreign assistance and further exacerbating the Global Fund’s financial shortfall. This is the wrong reaction, and would force poor countries to suffer even further as a result of decisions made thousands of miles away by Wall Street investors. Instead, commitments to foreign assistance, especially programs that are effective and achieve results, are in the US and other wealthy nations’ interest because AIDS, TB, and malaria are destabilizing some of the largest up-and-coming global markets.

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20 Things to Know about the Global Fund's financial crisis

The Global Fund to Fight AIDS, TB and Malaria is facing a critical $5 billion shortfall that could lead to cuts to existing and future grants, unless the US and other rich nations increase their contributions. Here are 20 things to know about the financial crisis the Global Fund is facing. | Read more

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