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Funding for HIV and AIDS

Funding the response to HIV and AIDS

President Bill Clinton and Bill Gates at the International AIDS Conference in Toronto, 2006

Donor governments, low-income and middle-income country governments, the private sector, and individuals have contributed to the substantial increase in HIV and AIDS funding from the 1990s into the new millennium. In 2011, an estimated US$16.8 billion was spent on HIV and AIDS1 compared to US$300 million in 1996.2 This is also an 11 percent increase on the money spent on HIV and AIDS in 2010.3

From 2009, total global funding for HIV and AIDS flattened; creating a funding gap (the difference in the amount of money needed and the amount actually allocated). In 2011 there was a funding gap of 30 percent between the US$16.8 billion spent, and the 2015 target of US$22-24 million.4

By 2010, funding from donor governments had dropped 10 percent, raising concerns about the future of the fight against HIV and AIDS. Although part of the decline was linked to exchange rate fluctuations, it was noted that in some cases there were deliberate decreases by some donors in the wake of the global economic crisis. Actual resources available in 2010 were US$6.9 billion, compared to US$7.6 billion in 2009.5

Where does HIV and AIDS funding come from?

HIV and AIDS-related funding from the international community for low- and middle-income countries usually reaches the projects that spend it via one (or more) of three main funding streams: donations from national governments; multilateral funding organisations; and private funding. Private funding incorporates a wide range of donor types from large corporate donors and foundations to small non-governmental organisations (NGOs). Between 2006-2011, international sources provided 36 percent of the US$9.4 billion spend on HIV and AIDS in low- and middle-income countries.6

HIV and AIDS funding from national governments

In 2010, as has been the case throughout the decade, the majority of the global funding disbursed for the HIV and AIDS epidemic was provided by donor governments. Within those donor governments, a few account for the bulk of the funding: the United States (U.S.) was the largest donor in the world, accounting for more than half (54.2%) of disbursements by governments in 2010. The U.K. accounted for the second largest share of disbursements in 2010 (13.0%), followed by France (5.8%), the Netherlands (5.1%), Germany (4.5%), and Denmark (2.5%).7

The American government donates a substantial amount of money for the HIV and AIDS epidemic. 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 and 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 US$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 and 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.

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 – 7.1 percent of UK government overseas development assistance goes to addressing HIV and AIDS.9 A new plan for HIV and AIDS support was announced in 2008 with the emphasis on health systems strengthening rather than on HIV and AIDS specifically.10 DFID is the world’s second biggest bilateral donor for HIV and AIDS, and is also a major donor to the Global Fund, committing up to £1 billion of funds for the years leading up to 2015.11

Multilateral funding organisations

Funding for HIV and AIDS spending in low- and middle-income countries is distributed by multilateral organisations, which obtain their funding from a number of national governments. The largest such body is the Global Fund to fight AIDS, TB and Malaria, which had distributed about US$16.2 billion for HIV/AIDS, malaria and tuberculosis by November 2011.12 Around 61 percent of Global Fund funding is spent on HIV and AIDS.13

The World Bank is the second largest multilateral donor to the HIV and 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.14 The World Bank tends to look at the economic aspects of the epidemic - especially the negative effects that HIV and 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 Bank15

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

Private sector funding

There are a very large number of private sector organisations involved in the response to HIV and AIDS, including corporate donors, individual philanthropists, religious groups, charities and non-governmental organisations (NGOs). These organisations 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 HIV and AIDS response, accounting for around 4 percent of spending.

While the size of its funds make it small in comparison to multilateral organisations, the Bill and Melinda Gates Foundation has nonetheless given very large sums of money and support to the global fight against HIV and AIDS. The Foundation has awarded US$1.4 billion in grants to the Global Fund as of January 2012,16 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 HIV and AIDS vaccine and microbicides research.

Concerns have been raised over the impacts of the Bill and Melinda Gates Foundation's funding practices, and the lack of accountability in private sector funding in general. The Gates Foundation directs a disproportionately large share of its funding towards a small number of US-based institutions, accentuating disparities between developed and developing countries.17

The William J. Clinton Foundation, founded by the former American President, Bill Clinton, is another private organisation with HIV and 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.

Domestic HIV and AIDS spending

Domestic spending by people and their governments accounts for a significant part of the global response to HIV and AIDS. It has been increasing between 2005, when US$3.9 billion was spent, and 2011, when US$8.6 billion was spent by low-income and middle income countries. For example, Botswana more than doubled its domestic spending between 2006 and 2011.18

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.19

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.20

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 can be 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 favour 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.
  • Perceptions of good governance – Acute need can be overlooked when a political situation is off-putting for donors. Civil war, a collapsed or corrupt government and widespread violence can lead to decreased assistance. For example, UNITAID, the World Bank and PEPFAR withdrew from the war ravaged state of the Democratic Republic of Congo in 2011. This is despite increased need for antiretroviral treatment (only 10 % of people needing treatment in the DRC receive it - far less than in other parts of sub-Saharan Africa).21 22
  • Type of HIV and AIDS 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 stigmatised and marginalised groups such as sex workers and injecting drug users, even if these are the people most affected by HIV.

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

Large donors rarely provide money directly to organisations 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 organisations 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 US$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 organisation 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 organisation like AVERT to achieve a short funding chain, smaller bodies usually only provide a small part of overall funding given to community organisations. 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 US$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 bullet points below illustrate, 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 organisation
  • Home-based care worker

As money is passed between different countries, banks, groups and organisations, it is inevitable that some will be spent before it actually reaches community organisations. 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 thact someone within the country’s Ministry of Health had fraudulently taken US$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 organisations 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 minimise 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 HIV and AIDS?

The main organisations that receive the money for AIDS include public bodies - such as a country’s ministry of health or national AIDS council - and non-governmental organisations. 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 organisations. 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 organisations

Community organisation in UgandaCommunity organisations 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 neighbours, to more organised projects that offer a range of HIV-related services.

Community organisations have an extremely important role to play in the global fight against HIV and 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 organise funding for the community organisations that work there. In reality, it is usually the other way round – community organisations themselves have to get in touch with grant-making bodies.

Conclusion

The global economic crisis that began in 2008 has been linked to decreased donor spending for the HIV and AIDS epidemic in low- and middle-income countries.28 29 30 In October 2009, UNAIDS released a series of country studies on the impact of the economic crisis on HIV prevention and treatment programmes. The summary report states "the negative impact of the crisis on HIV and AIDS programmes is real and getting worse."31 For example, the percentage of countries where antiretroviral treatment programmes were adversely affected by reduced external funding rose from 11% to 21% from July 2008 to July 2009. Prevention programmes were identified as the most likely to be worst affected in all countries receiving external funding.

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 and AIDS.32 Estimates suggest the cost of funding the global HIV/AIDS response will reach almost US$24 billion per year by 2015.

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. 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 HIV and AIDS, but once that money has been allocated, not enough attention seems to be paid to where it goes.

 

References

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