FUNDING for HIV and AIDS epidemic

Large donors rarely provide money directly to organizations at the community level. Instead, they generally give funding to ‘intermediary’ groups, such as government-run AIDS bodies and regional NGOs, who then pass that money on to the community level.

FUNDING for the HIV and AIDS epidemic

As HIV continues to spread around the world, increasing amounts of funding are being provided to fight the AIDS epidemic. Since 1996 available funding for the response to AIDS in low- and middle-income countries rose from US$300 million annually to US$10 billion in 2007.¹ Despite this increase, there is still not enough money being provided. Spending per person living with HIV in America exceeds that in the Latin America and Caribbean region by a factor of 35, and is 1,000 times higher than in Africa.²

The Joint United Nations Programme on HIV/AIDS (UNAIDS) estimates that US$22.1 billion will be needed in 2008 to effectively respond to the epidemic, most of which will need to come from the international community.³ Around half of this money is required for HIV prevention, a quarter is for treatment and care, and the rest is needed for the support of orphans and vulnerable children, programme costs and human resources.⁴

But who provides this money? And how does it reach the people that really need it?

Where does AIDS funding come from?

The AIDS-related funding for low and middle-income countries from the international community usually reaches the projects that spend it via one (or more) of four main funding streams: donations from national governments; multilateral funding organizations; the private sector; and domestic spending.

AIDS funding from national governments

A very large proportion of foreign funding for responses to the AIDS epidemic is provided by donor governments. This money is usually given in the form of bilateral donations, i.e. donations straight from one government to another. The top six donors are America, Japan, France, the UK, Germany, and the Netherlands.⁵ Over the past few years, AIDS funding from donor governments has risen significantly.⁶

The American government donates a substantial amount of money for the AIDS epidemic. In 2007 the United States accounted for more than 40 percent of disbursements by governments.⁷

In his State of the Union address in January 2003, President Bush announced the creation of PEPFAR, the President’s Emergency Plan for AIDS Relief, a commitment to significantly increase US spending on HIV/AIDS initiatives around the world.⁸ Planned to run for five years, PEPFAR intended to direct US$15 billion to places where it is most needed. PEPFAR was renewed in July 2008 with the intention of spending $48 billion from 2009 to 2013 on programmes to tackle HIV and AIDS as well as tuberculosis and malaria.

PEPFAR is an umbrella for all the existing HIV/AIDS related funding being provided by the American government, including the HIV-related funding that was previously distributed through the US Agency for International Development (USAID). As bilateral donors are able to decide where their donated money should be spent, PEPFAR funding is disbursed in accordance with the political views of the United States government.  Under the original act, a third of the prevention funds had to be directed towards abstinence only prevention messages.⁹ The renewed act calls for the Global AIDS Coordinator to report to Congress if less than half of all prevention funds in a country with a generalized epidemic are spent on 'abstinence only' programmes. ¹⁰

The Department for International Development (DFID) is the UK government’s department for managing Britain’s distribution of foreign aid. Though it provides funding for a large range of projects, addressing the global AIDS epidemic is among its principle goals. A new plan for HIV/AIDS support was announced in 2008 with the emphasis on health systems strengthening rather than on HIV/AIDS specifically.¹¹ DFID is the world’s second biggest bilateral donor for HIV/AIDS, spending around $850 million in 2005/06, and is also a major donor to the Global Fund, committing up to £1 billion of funds for the years leading up to 2015. As one of the largest international donors in health research, DFID provided around £20 million in 2007/08 for Product Development Public-Private Partnerships that work towards developing a vaccine and a microbicide for AIDS, and improving drug treatment for TB and Malaria. ¹²

Governments and public organizations such as the UK DFID, Irish AID and the European Commission account for the overwhelming amount of money spent on research and development of products for use in the developing world. Nearly 85% of this funding in 2007 was provided by just 11 such organizations. Top of the list was the US National Institutes of Health.¹³

Multilateral funding organizations

Substantial funding for AIDS spending in low- and middle-income countries is distributed by multilateral organizations, which obtain their funding from a number of national governments. The largest such body is the Global Fund to Fight AIDS, Tuberculosis and Malaria, which had distributed a total of US$5.67 billion by May 2008.¹⁴ Around 58 percent of funding in November 2007 was being spent on HIV and AIDS.¹⁵

The World Bank is the second largest multilateral donor to the HIV/AIDS response in developing countries and is one of eight co-sponsors of UNAIDS. By the end of 2006, it had dispersed US$879.22 million to 75 projects to prevent, treat and reduce the impact of HIV and AIDS.¹⁶ The World Bank tends to look at the economic aspects of the epidemic - especially the negative effects that AIDS can have on a country’s economy.

“HIV/AIDS can have a devastating economic impact on countries with severe infection rates. Estimates suggest when the prevalence of HIV/AIDS reaches 8 percent - about where it is today for 13 African countries - the cost in terms of economic growth is estimated at about 1 percent a year”The World Bank ¹⁷

These large multilateral organizations such as the World Bank, are able to make their decisions fairly independently of the countries that provide their funds. This means that they can allocate money to countries and projects that - due to political reasons or prejudice - might have otherwise been ignored by other funding organizations.

Private sector funding

There are a very large number of private sector organizations involved in the response to AIDS, including corporate donors, individual philanthropists, religious groups, charities and non-governmental organizations (NGOs). These organizations vary in size, from small groups such as local churches, to large contributors such as the Bill and Melinda Gates Foundation and corporate donors. Overall, the private sector is by far the smallest of the four main sources of funding for the global AIDS response, accounting for around 4 percent of spending.

While the size of its funds make it small in comparison to multilateral organizations, the Bill and Melinda Gates Foundation has nonetheless given very large sums of money and support to the global fight against AIDS. The Foundation has pledged US$150 million to the Global Fund and has spent US$200 million establishing an initiative to prevent HIV transmission in India. In partnership with the Merck Company Foundation and the government of Botswana, the Gates Foundation has made significant progress in combating the HIV/AIDS epidemic in Botswana. It has also made large contributions to vaccine and microbicide research.

The William J. Clinton Foundation, founded by the former American President, Bill Clinton, is another private organization with HIV/AIDS as one of its main concerns. The Foundation addresses the inequalities in access to health care in the developing world and in particular aims to improve access to antiretroviral treatment for developing countries.¹⁸

“Today, 1.4 million people living with HIV/AIDS are using lifesaving medicines purchased under Clinton Foundation agreements”¹⁹

Domestic HIV and AIDS spending

Domestic spending by people and their governments accounts for a significant part of the global response to HIV. In low-income and lower-middle income countries, such spending more than doubled between 2005 and 2007.²⁰

Money from domestic sources tends to be much more sustainable than bilateral and multilateral donations, and is therefore an extremely valuable source of funding for combating the epidemic. However, the amount of domestic spending varies considerably from country to country and many governments have not yet made HIV a priority in their budget allocations.²¹

In many developed countries (with the notable exception of America) most HIV-related costs are covered by the government through public health programmes, such as the National Health Service in the UK. In some less well resourced countries, governments only finance between 25 and 50 percent of costs, with the remaining money having to be covered by the patients’ themselves.²²

Inequalities in the distribution of funds

Funders are often swayed by political and ethical motives – resulting in equalities in the distribution of funds. Inequalities can occur based on the following factors:

• HIV prevalence – People in charge of disbursement of money are often drawn to those areas that have the highest prevalence of people infected with HIV. Whilst these areas certainly have the greatest need, this does not mean that other areas in which HIV prevalence is lower do not have the same needs. It can be as valuable to work in areas where the impact of HIV is not as evident as elsewhere.
• Geography– Some funders tend to favor certain geographical areas. This may be because these areas have a higher media-coverage than others, because these areas are safer than others for staff to visit, or it may simply be because these areas have better amenities for staff who might prefer to travel in comfort. Whatever the reason, there are geographical inequalities in spending, with some regions having sufficient funds and others having almost none.
• Type of HIV work – Different types of HIV work attract different levels of funding. Sometimes, funding will be made available for AIDS treatment, for example, but not for staff training. Often, donors are reluctant to give significant assistance to stigmatized and marginalized groups such as sex workers and injecting drug users, even if these are the people most affected by HIV.
• Perceptions of good governance – This, too, can affect distribution of funding. If an area is perceived to have problems with corruption, then funding organizations tend to avoid it.

How does the money filter down to those who need it?

Large donors rarely provide money directly to organizations at the community level. Instead, they generally give funding to ‘intermediary’ groups, such as government-run AIDS bodies and regional NGOs, who then pass that money on to the community level. The diagram below demonstrates a typical funding chain that money might flow down before it reaches the grassroots level.²³

Involving several different partners in the funding process is often necessary, and may be the most effective course of action. But long funding chains also create problems. With so many groups involved, getting money down to the community level can be complicated, expensive, and very time-consuming. Administration problems, a lack of human resources, shortfalls in political leadership, legislation that slows down the funding process, and poor infrastructure in the destination country, are all problems that can slow down the funding process.

When money reaches community organizations through short funding chains – for example, if the donor is a small charity – these problems may not be so significant. If you donate £20 (or $20, or €20) to the UK-based AIDS charity AVERT, the journey taken by that donation will be relatively short. The money will be paid into AVERT’s bank account, before being transferred to, for instance, a local community organization that pays for home-based care workers in a South African village, before being given to the worker themselves as a salary or stipend.

But while it is possible for a small-scale organization like AVERT to achieve a short funding chain, smaller bodies usually only provide a small part of overall funding given to community organizations. Large grant-making bodies are the most significant source of funding, and these bodies generally need to involve more partners in the process.

Imagine that, instead of your £20 (or $20, or €20) going to AVERT, you spend it on a t-shirt made by a brand that is part of Product Red – a scheme that groups together various businesses, who have agreed to donate 10% of profits made on all ‘Red’ products towards the Global Fund. As the diagram below illustrates, the journey taken by money that is donated through this route can be relatively long:

·         £20 spent on a Product Red t-shirt at a Gap store

·         10% of profits

·         Global Fund to Fight AIDS, TB and Malaria

·         South African Government Health Department

·         Regional NGO

·         Community organization

·         Home-based care worker

As money is passed between different countries, banks, groups and organizations, it is inevitable that some will be spent before it actually reaches community organizations. Each group involved in the funding process will need to take money for their services, to cover administration costs such as wages and overheads. There may also be other expenses that drain the original allocation of funding – for example, banks charge for money to be transferred between countries.

In addition to these legitimate, necessary expenses, there is also the potential for money to be spent inappropriately as it is passed around. For instance, in 2005 the Global Fund withdrew funding for Uganda,²⁴ after it was revealed that someone within the country’s Ministry of Health had fraudulently taken $280,000 of money donated by the fund. Because the Global Fund has a strong and transparent financial reporting system in place, it was able to identify this fraud and rectify the situation, highlighting the importance of monitoring and evaluation:

“All organizations involved in development finance…face the constant risk of possible misappropriation of funds and of corruption. That’s a fact of life in development finance. The key is to minimize the risk – to have in place oversight systems and to identify problems before they occur”.Sir Richard Feachem, Executive Director, Global Fund to Fight AIDS, Tuberculosis and Malaria²⁵

Although it is difficult for the sort of large-scale corruption that was seen in Uganda to occur unnoticed, the smaller-scale mismanagement of funds may be a more common problem. When mismanagement happens, it is not so much the case that something ‘corrupt’ is occurring, but rather that money is simply not being spent wisely, or used to maximum effect. For instance, a government department may spend excessive amounts on paying for experts to travel out to projects and stay in expensive accommodation, when the money could be better spent carrying out work on the ground.²⁶

It is difficult to judge exactly how much money is lost as it is passed along the funding chain. Comparing the sum of money originally allocated by a donor with the amount that actually reaches the grassroots level does not necessarily give an indication of how much has been ‘lost’, because a shortfall might just be caused by money being delayed or held up along the way. It is safe to say, though, that a sizable amount of money is often spent before it reaches the end of a large funding chain, mostly with just cause, but occasionally illegitimately.

Who then spends the money for AIDS?

The main organizations that receive the money for AIDS include public bodies - such as a country’s ministry of health or national AIDS council - and non-governmental organizations. The amount of money that is given to public bodies varies between countries. Donors tend to decide how much money will be given to governments and how much will be allocated for local, non-governmental organizations. PEPFAR, for example, channels the majority of its funds for Mozambique, Uganda and Zambia into non-local NGOs, despite being guided by policy that highlights the importance of allocating large amounts of resources to community organisations.²⁷

Community organizations

Community organizations are non-governmental bodies that are set up, based and run within local communities. Located in the hearts of villages and towns that are being devastated by AIDS, these groups are on the frontline of the global response, providing HIV prevention, testing, treatment and care services directly to the people that need them most. They range from small groups formed by friends, relatives and neighbors, to more organized projects that offer a range of HIV-related services.

A community organization in Uganda

Community organizations have an extremely important role to play in the global fight against AIDS. Their local knowledge and skills put them in a unique position to identify problems and to assess what needs to be done at the community level. In addition, they can often reach populations that governments and larger NGOs have no access to.

There is a common misperception that people who work for governments, NGOs or big funding bodies simply arrive in villages that are affected by AIDS and organize funding for the community organizations that work there. In reality, it is usually the other way round – community organizations themselves have to get in touch with grant-making bodies.

Conclusion

There are concerns that the 2008-2009 global economic downturn will have an impact on domestic and international spending for HIV/AIDS. A World Bank survey of 69 countries shows that most believe the economic crisis will have an effect on HIV prevention and treatment efforts.²⁸ A few countries have already made cuts in budgets and spending. Tanzania, for example, announced a cut of 25 percent in its HIV/AIDS budget.²⁹ If universal access to HIV prevention, treatment, care and support is to be reached by 2015 - the date provided in the Millennium Development Goals (MDGs) – there needs to be a dramatic increase in the level of funding for HIV/AIDS.

However, donating more money is not enough. Many of the countries where the largest donations are being received are under-resourced and lack the infrastructure to absorb the funding. South Africa, for example, is one of many countries where more money has been allocated for HIV/AIDS efforts, without improving the capacity to spend the money.³⁰

Higher-level bodies – those at the top of funding chains – need to take a greater responsibility for the actual implementation of money on the ground. There is a great emphasis amongst the international community on raising money for AIDS, but once that money has been allocated, not enough attention seems to be paid to where it goes.

*Source, Avert

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