Wall Street Journal - June 20, 2001
David Bank, Gautam Naik and Rachel Zimmerman

When U.N. Secretary-General Kofi Annan appeared before leading philanthropists in April to drum up contributors to his proposed global AIDS fund, he singled out the Bill & Melinda Gates Foundation, praising it for "doing very exciting things in the vital area of prevention."

Perhaps he should have mentioned a few more foundations by name.

0A breakdown of the donations pledged so far to the Global Fund for AIDS and Health

1Coca-Cola to Tap Its Marketing Muscle to Help Fight AIDS Epidemic in Africa

2Gates Gives $2 Billion to Foundation to Boost Its Role in Global Health (June 7)

3Gates Foundation Seeks to Bring Vaccine to Africa With Incentives for Drug Firms (May 31)

The Gates Foundation Monday announced a $100 million donation to the fledgling Global AIDS and Health Fund, but other major American foundations so far aren't following suit. While some philanthropies are modestly increasing funding for their own anti-AIDS programs, no other foundation has answered Mr. Annan's "call to action" with such a dramatic gesture to fight the pandemic.

At an April meeting of African leaders in Nigeria, Mr. Annan indicated he hoped to have financial commitments for the global AIDS fund in place in time for the United Nation General Assembly's special session on HIV and AIDS, which begins next week. There, Mr. Annan intends to present the outlines of a plan to fight the disease, including specific targets and timetables for reducing AIDS-related deaths and infections, especially in poorer countries. The AIDS virus infects more than 36 million people world-wide.

The U.N. estimates it will cost between $7 billion and $10 billion a year to turn the tide on the AIDS epidemic -- at least five times the annual AIDS spending of governments, international donors and individuals combined.

Governments are expected to provide the bulk of the global AIDS fund's financing. In addition to the Gates Foundation donation, which is to be spread over several years, the fund has raised $425 million from the U.S., British and French governments, the U.N. says.

"The big question is: 'Are the rich world governments going to step up in a significant way?'" Mr. Gates said in a recent interview.

Details of the structure and governance of the fund, which will be administered by the World Bank, haven't been finalized. Mr. Gates, the Microsoft Corp. chairman, and his colleagues at the Gates Foundation are being tapped as unofficial advisers. The fund also is expected to make grants to fight tuberculosis and malaria.

Those developing the AIDS fund say it is being shaped in part by principles pioneered by several other Gates-backed health initiatives, most notably the Global Alliance for Vaccines and Immunizations, known as GAVI, which was launched with $750 million from the Gates Foundation in January 2000.

The alliance oversees the largest independent vaccine program in the world. Its financing arm, the Global Fund for Children's Vaccines, gives both vaccines and cash to developing nations in return for contractual agreements providing precise details about how children will be immunized. With a small staff based in Geneva and a focus on speed, efficiency, and accountability, GAVI is being looked at as a model for the U.N. Fund.

Patty Stonesifer, co-chairman and president of the Gates Foundation, says one critical element of the AIDS fund will be its ability to "measure results" so that "donors feel confident" that their money isn't being wasted.

"Accountability and action," she says. "We should all care about the results." Already, parallels with GAVI are beginning to emerge. A confidential background paper offering an initial blueprint of Mr. Annan's global fund shows it will be "an alliance of partners," with a small executive board and a small secretariat. The fund seeks to "leverage additional political engagement and financial commitment" and to "bring in new partners" to fight the epidemic. The paper calls for the fund to have "mechanisms to ensure that money flows rapidly and is wisely utilized."

The Gates Foundation's $100 million gift is intended primarily to support programs that help prevent, not treat, the disease. Those include efforts to educate people about safe-sex practices, reduce mother-to-child transmission, identify high-transmission groups and make condoms available to people at risk.

No other foundation has the assets of the Gates Foundation, by far the world's largest with an endowment of $23.5 billion. But resources aren't the only reason for the tepid response elsewhere. Executives at other foundations says they worry the new AIDS fund will be under heavy pressure to channel spending into treatment of those infected with HIV instead of into prevention, which is key to stopping the disease's spread. Another concern is that a U.N.-led fund will favor governmental programs instead of those run by grass-roots groups, which are often viewed by foundations as more effective.

Even the United Nations Foundation, backed by $100 million a year from media mogul Ted Turner, is so far passing on the opportunity to contribute to the AIDS fund. "I would be surprised if much private money goes to the fund," said Tim Wirth, president of the UN Foundation, which has committed about $45 million to other AIDS programs. "We ought to be doing things governments can't do."

The Ford Foundation in New York, with an endowment of $14.5 billion, earlier this year allocated an additional $5.5 million to AIDS programs in Africa, on top of the approximately $10 million per year it has spent on AIDS in Africa in recent years. "We can make strategic grants faster and quicker than we could ever see by putting money into a global fund," said David Winters, who heads Ford's HIV-AIDS program.

In public, foundation executives have muted their concerns about the U.N.- linked fund. "Nobody wants to be against a lot more money for HIV, which is a critical thing," said Drew Altman, president of the Henry J. Kaiser Family Foundation in Menlo Park, Calif., which has a $630 million endowment and has committed $62 million over six years to loveLife, an HIV-prevention campaign aimed at South African youths. "There is a concern about how to make sure that once the money is raised, it's spent in a way that's really effective and not just dribbled out in lots of small pots."

Timothy Evans, director of health equity at the Rockefeller Foundation, said a large contribution to the U.N.-linked fund is beyond the foundation's reach. This month, the foundation, which has an endowment of $3.5 billion, is committing $15 million over five years for medical studies of cost-effective AIDS care in Africa. It has committed another $15 million over five years to advance research on microbicides, topical gels and ointments that can prevent infection with HIV and other sexually transmitted diseases. They are considered especially important because their use can be controlled by women, who are particularly vulnerable to HIV infection.

Foundation and corporate giving to fight AIDS domestically and internationally increased to about $130 million last year, after declining to as little as $57 million in 1998, according to Funders Concerned About AIDS, a New York organization that seeks to mobilize philanthropists.

"The philanthropic response has been good but could have been better," said Paul DiDonato, the group's executive director, who has set a goal of $200 million a year in funding by private foundations and corporate grant-makers. "This latest increase in resources goes a decent way toward making the response commensurate with the problem."

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