What is the New Funding Model?

The Global Fund has developed a new funding model (NFM) that it began to put in place in 2013. It replaces the old “rounds-based” system that had been used since the Global Fund’s launch. Among the NFM’s key aims are to simplify the grantmaking process, make funding more flexible and predictable for implementing countries, and ensure that the bulk of funding goes to where the needs are greatest (especially countries with high disease burden and low per capita incomes).

The NFM was officially approved by the Global Fund Board in November 2012. It is the cornerstone of the Global Fund’s 2012-2016 Strategy (“Investing for Impact”), which directs the Global Fund to restructure its business model to improve effectiveness and impact.

The NFM aims to boost predictability by having the Global Fund specify in advance the range of funding a country can expect in a given three-year period. The base amount available for each country, for each disease, is called Indicative Funding. Indicative Funding amounts are determined through a complex formula based on a country’s disease burden and per capita income (which is assumed to imply its “ability to pay”). Countries are placed in groups that signal what they might expect. Lower-income countries with high burdens of disease can expect more funding, with fewer restrictions, than other eligible countries. The Global Fund has signalled that it will assess country groupings (which it calls “bands”) on a regular basis and re-assign countries if necessary.

The Global Fund also plans to set aside a pool of money, called Incentive Funding, that can be allocated at discretion. It is expected that such funds will be used to “reward” countries that have developed and implemented high-quality programmes.

The NFM adopts an “iterative process”. The first step is a country dialogue – this is expected to be an existing country process bringing together all stakeholders to develop plans to address the three diseases. This is not something that the Global Fund organises – it is expected to be part of the country’s broader approach. The Global Fund says the Country Dialogue is is “designed to be an inclusive process that provides a platform for all stakeholders to have their voices.” Therefore, participants in this dialogue should include representatives from all sectors that the Global Fund considers to be ‘partners’, including government, civil society, and communities living with and affected by HIV, TB and malaria.

The concept note emerges from the country dialogue process. This is now the first stage of the application process, and is not supposed to be a lengthy, comprehensive document. It should request a specific amount of funding (based on the envelope proposed by the Global Fund) and summarize the country context, planned activities and interventions for a three year period. Ideally, concept notes should be based on countries’ national strategic plans (NSPs) for programming associated with the three diseases.

Concept notes are reviewed by the Technical Review Panel (TRP), the independent group that evaluates all Global Fund proposals and submits recommendations regarding funding to the Board. The TRP works with the Secretariat’s Grant Approvals Committee (GAC) and country partners to revise and “improve” proposals so that they are technically sound and meet all Global Fund requirements.

The Global Fund began “testing” the NFM with three national and three regional “early applicants” invited to participate in late February 2013. Also in 2013, some 60 programmes were categorized as “interim applicants”. They are not going through all of the NFM stages and are mostly seeking funds to cover expected shortfalls in essential services such as provision of antiretroviral drugs to those already on treatment.

Full implementation of the NFM is expected to begin in 2014, once the level of available funding for the 2014-2016 cycle is established. The total level of available funding will be determined at the end of the “replenishment” effort being undertaken throughout 2013. In replenishment drives conducted every three years, the Global Fund works with donors to obtain pledges to cover ongoing and future programmes. Once the overall amount is known the Global Fund Secretariat can determine the amount of funding available for each country eligible to receive support.

More and updated information about the NFM may be found on the Global Fund’s website.

We also have background documents on New Funding Model