New Model to Simplify Applications and Make Funding More Predictable.

The Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria today voted to adopt a new approach to funding grants that will enable the organization to invest the world’s money more strategically and for greater impact.

The new funding model is designed to significantly improve grant-making, with a process that is more predictable and reliable, and also more flexible, so that it can achieve a higher success rate in all grants and more effectively save the lives of people affected by the three diseases.

“This is a tremendous, forward-looking change for the Global Fund,” said Simon Bland, Chair of the Board of the Global Fund. “In addition to the substantial amounts of money we are disbursing this year, this new funding model will make our grants even more effective in the future.”

Since late 2011, when the Board chose to re-focus its investments in a more strategic and targeted way, the Global Fund has performed a restructuring that concentrates 75 per cent of the staff in the core business of grant management, and reorganized the Grant Management Division in a way that improves the attention given to each country.

Now, the new funding model will change the way implementers apply for financing, get approval of their proposals and then manage their grants. Once fully developed, it will encourage national strategic plans in each country, and strive for more simplicity and efficiency.

Several aspects of the new funding model require further preparation, and the Board agreed to consider them at its next meeting in November.

One key element of the new system will be for applicants to submit a concept note, shorter than previous applications, and then get early feedback from the Global Fund, other donors and technical experts on how the proposal may need adjusting before moving forward. That is expected to reduce waiting times, and to improve the overall success rate of applications.

Another important change will be more flexible timing for grant applications: instead of having to apply at one set time, implementers will be able to better align the submission of grant proposals with their own national budgeting schedules.

“The Board has given us the principles, policies and definitions to implement the strategy of getting more value for money,” said Gabriel Jaramillo (see Report of the General Manager to the Board), General Manager of the Global Fund. “It's great to see the Board walk the talk. Now we can develop a new business model that will be simpler for implementers, will move resources faster to save lives, and will also give taxpayers in donor nations confidence that the Fund is responding to the times."

Under the new approach, countries will be grouped in bands, which will enable the Board to ensure focus is placed on countries with the highest disease burden and least ability to pay, among other factors.

The Board agreed that funds will be allocated to each band, and then divided in a way that identifies a range of funding for each country. In addition, the Board decided that a portion of funds would be used to provide incentives for ambitious requests based on specific investment cases and national strategies.

“Our common goal is to help as many people as we can by directing resources to areas of high disease burden and limited ability to pay,” said Sylvester Anemana, a board member representing West and Central Africa. “Making the process more effective means more lives are saved.”

Country Coordinating Mechanisms will continue to be the primary entity responsible in each country for submitting applications and overseeing grants. Each Country Coordinating Mechanism will engage with all stakeholders, including civil society, to develop robust applications to the Global Fund.

The new funding model will replace the rounds-based system, which was highly successful in the first years after the Global Fund was established in 2002 in spurring partnerships across sectors in many countries to identify and quantify their own needs in preventing and treating AIDS, TB and malaria.

However, the international financial crisis accelerated concerns that the Global Fund needed to invest for impact, and move away from a relatively passive role in shaping demand. The Board decided to make changes to ensure that it directs the organization’s investments toward those people most in need, and toward those interventions that can help the most people.

Consultations with partners, implementers, donors and other stakeholders in recent months yielded numerous suggestions on how to ensure that the new funding model adequately keeps the portfolio global, incentivizes well-performing programs and reinforces the principle of country-ownership. Many implementers also stressed the need to simplify and accelerate access to funding.

“This enables us to move forward with clear intentions,” said Rachel Ong, who represents the Communities delegation to the Board. “As a governance body, we are optimizing our direction and incentivizing demand, and that will help us raise the resources we need.”

In its decision, the Board agreed that the new model should enhance participation by all stakeholders, including civil society and will support continued funding for the needs of most-at-risk populations, so that concentrated epidemics are taken into consideration.

The Board also requested a regular evaluation of the new funding model, and asked the Board’s Strategy Investment and Impact Committee to continue working out the details of the funding model so that implementation can begin in 2013.