International Funding

Health is an intrinsic human right as well as a central input to poverty reduction and socioeconomic development. Cost-effective interventions for controlling major diseases exist, but a serious lack of money for health and a range of system constraints hamper global and national efforts to expand health services to the poor. The high burden of preventable diseases in poor countries and communities calls for strategic planning of investments across health and health-related sectors to improve the lives of poor people and promote development.(WHO)

Framing the Issue

Health issues are a central to the international development agenda. At the United Nations (UN) Conference on Financing for Development (Monterray, 2002) health was identified as a crucial component of poverty reduction and successful development. The United Nations, WHO, and like-minded organizations have brought health issues to the attention of political leaders and international groups, such as the G-8 and G-77 countries and the European Union. This greater visibility has led to the establishment of special funds and initiatives designed to address the world’s health problems. Part of the donor interest in health can be attributed to HIV/AIDS pandemic. Another reason is that “health is a priority goal in its own right as well as a central input into economic development and poverty reduction”.¹

In 1996, the Organization for Economic Cooperation and Development (OECD) set international development goals to halve extreme world poverty by 2015.² These goals were reaffirmed and expanded upon by world leaders at the UN Millennium Summit, in September 2000. Three Millennium Development Goals relate specifically to health (see below) but many others are also closely related:³

Goal 4: Reduce child mortality

Goal 5: Improve maternal health

Goal 6: Combat HIV/AIDS, malaria and other diseases

The Millennium Development Goals focused the attention of the international community on aid funding, with one goal calling for increased official development assistance in order to achieve the other goals.

As of 2001, Official Development Assistance (ODA) represents approximately 15%–25% of all net financial resources for developing countries. ODA provides a vital source of aid for the poorest countries, and is an important resource for those developing countries in the low- and lower-middle income categories where private investment and trade are insufficient to address development needs.⁴ Without vigorous levels of ODA the Millennium Development Goals (MDGs) cannot be fully supported. The World Bank estimates that ODA levels need to be roughly $100 billion per year, a 27% increase from 2004 levels of $78.6 billion. The Commission on Macroeconomics and Health further recommends that the ODA for health be increased to $27 billion per year by 2007, and $38 billion by 2015.¹

What is ODA?

Foreign aid includes both development aid and humanitarian aid; development aid is given by developed countries to support economic development in developing countries, and is distinct from humanitarian aid by the aim of alleviating poverty (and consequences of poverty) in the long term, rather than alleviating suffering in the short term. International health programs are likely to receive foreign aid from a variety of sources including: bilateral aid from developed nations, funding from multilateral institutions (such as the European Union or World Bank) or support from international nongovernmental organizations (INGOs).

The development aid to international health programs is largely Official Development Assistance (ODA). The nations of the Organisation for Economic Co-operation and Development (OECD), have committed to providing ODA to underdeveloped countries. The United Nations (UN) has set a target for developed countries of 0.7% of the GNI to be given as ODA. In 2004 the average effort was 0.42% of GNI.

ODA is usually given by donor governments as simple donations, channelled through individual countries' international aid agencies. It can also be received via multilateral organisations or development charities. Each donor has different application procedures, financial restrictions, reporting requirements, and bureaucratic hurdles to be overcome in order to secure, retain or renew funding. Each donor is also governed by internal restrictions, including political priorities, organizational mandate, or financial restrictions from their own funding sources.

Levels and Distribution of ODA

In 2004 the combined Official Development Assistance of OECD countries was $78.6 billion USD. The United States contributed $19 billion - the largest contribution in absolute terms, but this figure should be compared to the combined European Union contribution that totaled $42.9 billion. As Table 1. demonstrates Norway's contributions remained in the lead at 0.87% of GNI, with the combined EU contributions at 0.36%. The United States in contrast remains the second lowest contributor of ODA as a percentage of Gross National Income (GNI), at 0.17%.

The UN have set a goal for ODA of 0.7% of GDI. Only Norway, Denmark, Luxembourg, Sweden and the Netherlands currently contribute ODI at this level. The UK and Switzerland both have strategies for implementing increased ODA, and hope to meet UN standards by 2015. Germany, Canada, Japan and the US are key international donors that give funding at below average percentage levels of their GNI. Political priorities will continue to keep funding at these levels or lower, but as a result of the high levels of GNI for Germany, Japan and the US they continue to be significant international development donors, providing high absolute levels of ODA. The US is a clear leader providing 19 billion USD in ODA during 2004. This should be viewed in a context funding restrictions however - political priorities mean that funding is not always targeted at health priorities.

As well as what donor funding is restricted to, it is pertinent to compare the funding absolute amounts with the proportion GNI expended by donor countries. The top five donors in terms of ODA as percentage of GNI are Norway, Denmark, Luxembourg, Sweden and the Netherlands. The top five donors in terms of actual dollars are the US, Japan, France, UK and Germany (number six is the Netherlands). From a funding perspective the amount of money available is more important - although from a global aid perspective the percentage of GNI committed is clearly critical. Percentage of GNI committed to ODA also highlights donor interest in international development assistance, and whether it is a political priority in domestic politics.

ODA in 2004

Chart 2: ODA as a percentage of GNI (2004)

Chart 1: Net ODA Amounts (2004)

ODA for Health

The amount of funding (both as a proportion of total ODA and the absolute dollar amount) committed to health issues varies by donor, and by year. Funding for health could cover any number of health related initiative including environmental health, health infrastructure, infectious diseases (including HIV, TB and Malaria), nutrition, reproductive health, contraception, maternal and child health. The OECD figures of health ODA are also not the full picture. The DAC uses a sector classification specifically developed to track aid flows and to permit measuring the share of each sector (e.g. health, energy, agriculture) or other purpose category (e.g. balance-of-payments support, emergency assistance) in total aid. Funding for other sectors is likely to also impact health.

ODA for Health 2000 - 2004

Chart 3: Health Expenditure as a Percentage of Total ODA

Chart 4: Top 5 Donor Health Expenditure Amounts

Chart 3 & 4: Data from total amounts of aid (ODA) by sector to all recipients combined, in the aggregated DAC statistics database: http://www.oecd.org/dataoecd/50/17/5037721.htm

The UK is overall the strongest donor in terms of percentage of ODA spent on health, although the percentage spent has been decreasing over the last three years, The Netherlands also demonstrates a strong commitment to health related funding. Generally the funding trend for Dutch spending on health is upwards, although in 2004 this was reversed. Germany’s funding to health does increase over time, but is consistently the lowest in terms of percentage of ODA spent on health. France also has low investment in health, although has a similar upward trend of percentage of ODI spent on health. US Figures for 2000 and 2001 are not available - otherwise the US shows a downward trend of investment in health programs as a percentage of ODI.

The MDG’s, alongside domestic politics, influence donor funding priorities with regard to health. The donor agencies in the US, Japan, France, the UK, Germany and the Netherlands all measure their input to health development alongside the MDG’s - and only in some cases have stated donor priorities in health outside the three goals. It is likely that all OECD countries currently provide more funding for initiatives that address child mortality, maternal health, HIV/AIDS and malaria. While a focus on these issues is warranted the increased funding in these areas means that funding health issues will be unevenly distributed. Although child mortality is commonly used as a health indicator, and HIV/AIDS clearly presents a significant health challenge, the full spectrum of health concerns in developing countries is much broader.

Applying for Funding

Acquisition of international government funding for health programs requires the organization to set fundraising targets for each project. Programming priorities should ideally be set by institutional capacity, comparative advantage and organizational mandate. More often they are governed by donor priorities (or restrictions), or even by direct donor requests (as a result of political priorities that they must satisfy). The MDG’s currently play into this dynamic, as donors are being judged by the international community on their MDG performance.

These issues influence program design, and can alter the trajectory of the organization as a whole. However, by losing sight of the organizational mandate organizations risk losing comparative advantage, and when it come to getting their priority programs funded reduce their chances of securing funds. It is advisable instead to build components in to each program that satisfy donor requirements and needs, but that also speak to the skills, knowledge and ideas that are already in-house. By combining the two strands of programming institutions should be able to maintain their identity, while also having successful grant applications. The number and dollar value of successful applications may be less, but in the long run the organizational integrity can be maintained.

As a result of flexibility in responding to donor requests the outline of the program may change over time, and according to the donor it is being submitted to. It is advisable to keep one master copy of the program outline - that includes the details of each proposal - in order to keep track of the commitments made to each donor. The proposal itself should really evolve in conversation with donor contacts. Program/desk officers usually are a wealth of information regarding the kind of proposal structure and content will be most well received at their institution. Sending blind proposals is rarely successful - and contact should at least be at the program officer level. Much better is to work at a senior level, with the leader of the organization contacting senior staff within the donor agency to get rough agreement on the program goals before even beginning the proposal process.

Substantial grant from government donors are rarely made on the basis of an application form. Discussion and negotiation usually begins long before submission of a formal proposal. Organizations that are most successful in securing substantial ODA are those who develop long term relationships with key personnel in government donor agencies, and with the agency itself. This relationship is usually characterized by strong ties between NGO Executive Directors and senior staff in donor agencies.

However, all government donor agencies will require the NGO to participate in the formal proposal process. The contents of the proposal package will usually be drafted and redrafted between donor agency staff and NGO staff until it meets the requirements of the particular donor. Programs that have multi-donor funding face the challenge of meeting the requirements of all the donors within one proposal - often different versions of the project description and budget are needed for each donor. The components of a grant proposal submission vary between donors, and according to specific donor constraints. However a proposal package will usually contain at least:

A Project Description

· Executive summary/abstract

· Context and rationale

· Target Population

· Objectives/Goals

· Program Activities

· Timeframe

· Outputs

· Outcomes

· Evaluation Plan

A Project Budget

· Staffing and Salaries

· Adminstrative/Overhead Costs

· Travel

· Meetings/Conferences

· Publications

· Technology Costs

Also included may be staff bibliographic information, organization information and structure, comparative advantage and niche of the organization in completing the project work. Each grant submission will be influences by the constraints of the donor funding available. Donor restrictions are usually derived from political obligations or bureaucratic needs. These include inter alia:

· Proposal straucture (logframe/narrative etc)

· Whether concrete outputs required (problematic for research or advocacy organizations)

· Monitoring requirements (monthly, quarterly or less frequently)

· Frequency and substance of reporting required on each grant (burdens for small organizations)

· Donor financial year (that may/may not match project/NGO financial year)

· Percentage of the budget that may be allocated to program/organizational overhead

· Percentage of the budget that may be allocated to salaries & staffing

· Budget headings/line items required in the budget

Logical Frameworks (Logframes)

Logframes are used to help strengthen activity design, implementation and evaluation. They can be used in almost any context to identify what is to be achieved, and to determine to what degree the planned activity fits into broader or higher-level strategies. Within the activity, the logframe helps to determine the role(s) to be played by different participants, and provide an accurate schedule of the actions that will need to be undertaken. It can also be used as the focus for discussions about amendments and alterations to an activity in the light of experience, while the activity is under way.⁵

Logframe Headings

· Inputs

· Activities

· Outputs

· Purpose (outcome)

· Goal (outcome)

Donor Government: Netherlands

Funding Statistics: http://www.oecd.org/dataoecd/42/7/1860400.gif

Website: http://www.minbuza.nl/

Statement Regarding Donor Commitment to Health

The Government of the Netherlands focuses development cooperation funding on reproductive health. Reproductive health and rights concern sexuality and reproduction, health and the right to decide freely. If people, especially women, can make their own decisions about whether and when to have children, the number of children per family will fall as a result. This will improve women’s health and the health of their families and communities, expanding opportunities for development in a country. That is why focusing on reproductive health and rights contributes towards poverty reduction and is considered a priority of Dutch development policy. Improving reproductive health and rights is a prerequisite for achieving the Millennium Development Goals and crucial for containing the HIV/AIDS pandemic.

The Netherlands takes a broad approach to reproductive health and rights, which entails a combination of better health care, sex education, more condoms and contraceptives, gender equality and the promotion of rights relating to sexuality and number of children.

Donor Structure

Grants for INGO’s are available under the new Policy Framework for Strategic Alliances with International NGOs (SALIN). This replaces the Theme Based Co-financing (TMF) scheme under which INGO’s used to apply for grants (and a SALIN grant cannot be concurrent with a TMF grant). Organisations receiving grants through the SALIN programme should focus explicitly on structural poverty reduction in developing countries on the DAC-1 list. This grant programme is intended for organisations that meet the following criteria:

INGOs that complement Dutch development policy;
Global INGOs that operate in fields and locations in which Dutch NGOs are not sufficiently active
INGOs that seek to cement partnerships with Southern organisations;
INGOs that produce a unique ‘product’ or employ unique methods.

Proposal Requirements (grant proposals are judged on the following criteria):

1. How does the INGO see its role in a strategic alliance with the ministry?
2. Is the proposal consistent with the organisation’s history and mission vis-à-vis sustainable poverty reduction?
3. Does the application contain an effective intervention strategy, operational objectives and intended results?
4. Has the organisation shown evidence of good donorship?
5. What is the nature and quality of its relationships with third parties? (In answering this question, the following elements will be examined: position on and realisation of complementarity, strategic alliances, partnerships and the relationship with the international research community.)
6. What has been the impact and sustainability of the organisation’s past results (track record)?
7. Does the INGO have a structure and culture that contribute to effective service?
8. Does the organisation’s HR and innovation policy (including knowledge management) foster greater effectiveness?
9. Are existing monitoring procedures and systems adequate?
10. Does the organisation have a system of evaluation and quality control?
11. Is the quality of the organisation’s financial and administrative management acceptable?

Other Important Information

· A SALIN grant is only open for programme funding and shall not amount to more than 50% of the programme’s total expenditures

· The overriding factor in selecting which INGOs are eligible for a SALIN grant is the strategic added value of the partnership for Dutch development cooperation. Funding an INGO should entail more than just supporting an activity. The grant relationship is characterised by frequent, intensive policy dialogue. The strategic alliance will emerge from complementary and effective policy that has been developed jointly.

· The SALIN policy framework is the part of Dutch development cooperation policy which subsidises international non-governmental organisations. Country-specific applications are not eligible for grants from central SALIN resources, but should instead be submitted to the Dutch mission in that country. These applications will be assessed according to the relevant regulations as well as this policy framework.

Donor Government: UK

Funding Statistics: http://www.oecd.org/dataoecd/42/53/1860562.gif

Website: http://www.dfid.gov.uk

Statement Regarding Donor Commitment to Health

The UK Department for International Development is developing a new health strategy. This will build on the previous Target Strategy Paper Better Health for Poor People, published in 2000. The new strategy will review developments over the last five years and define how DFID will work to turn the 2005 G8 commitments into action to improve health.

Generally DFID works in the following areas of health:

Communicable Diseases Mental Health

Evidence Based Health Care Maternal, Neonatal and Child Health

Health Systems Reproductive Health

Non-Communicable Diseases

DFID is but one of many actors in the international community. Making progress towards realising the MDGs will require the international community to work more effectively in support of country health priorties. The enormous potential of the UN system, the international financial institutions, bilateral agencies and the European Union will need to be harnessed in new ways. New partnerships and methods of collaboration, led by national governments and civil society, and bound by shared priorities will have to be built and supported effectively by this community. New roles and responsibilities will have to be defined. DFID will plays its full part in building this new collaboration.

Proposal Requirements

The program plan is submitted on a logframe (see Applying for Funding). A logframe provides a mechanism to set targets and assess progress towards them. It can be continuously updated as situations change.

Logframe Headings:

Inputs (This includes financial inputs)
Activities
Outputs
Purpose (outcome)
Goal (outcome)

Other Important Information

DFID outlines their approach to development projects in the following document:

http://www.dfid.gov.uk/pubs/files/toolsfordevelopment.pdf

Sucessful grant partnership with DFID will be characterized by programs that encapsulate the some or all of the following components:

Stakeholders identified
Problems and situational analysis undertaken
Development of a (shared) vision - visioning
Project logframe central tool for project management
Risk management undertaken
Participatory methodologies and management
Plan for monitoring, reviewing and evaluation

Donor Government: US

Funding Statistics: http://www.oecd.org/dataoecd/42/30/1860571.gif

Website: http://www.usaid.gov

Statement Regarding Donor Commitment to Health

The U.S. Agency for International Development's (USAID) programs in global health represent the commitment and determination of the US government to prevent suffering, save lives, and create a brighter future for families in the developing world. USAID's commitment to improving global health includes confronting global health challenges through improving the quality, availability, and use of essential health services. USAID's objective is to improve global health, including child, maternal, and reproductive health, and the reduction of abortion and disease, especially HIV/AIDS, malaria, and tuberculosis. The Bureau for Global Health (GH) supports field health programs, advances research and innovation in selected areas relevant to overall Agency health objectives, and transfers new technologies to the field through its own staff work, coordination with other donors, and a portfolio of grants and contracts with an annual budget in excess of $1.6 billion. Global health issues have global consequences that not only affect the people of developing nations but also directly affect the interests of American citizens.

PVC Private Voluntary Cooperation

The main conduit for USAID development funding is through the Private Voluntary Cooperation scheme. PVC provides direct support to efforts made by the U.S. PVO community and by its local partner non-governmental organizations (NGO) to address critical needs in developing countries and emerging democracies. The primary way PVC supports its mission is through the competitive grant programs it administers. If you are a PVO and would like to work with PVC or USAID overseas, you must register with USAID. Information on how to register can be found here: http://www.usaid.gov/our_work/cross-cutting_programs/private_voluntary_cooperation/conditions_us_organizations.pdf

Private voluntary organizations (PVOs) and their local partners (NGOs) play a critically important role in international development efforts. Through a range of cross-cutting grants and programs aimed at organizational strengthening, USAID works to ensure that these PVOs and NGOs are strong, effective, and capable of delivering the services that are critical in life or death situations. By building the institutional capacity of these organizations, USAID helps to increase their ability to deliver development services, mobilize people at the grassroots level, and form partnerships and networks.

Conditions of Application for the Organization

· The organization must be non US based

· The organization must be a NGO that receives cash contributions from the general public

· The organization must be a charitable organization

· The organization must have international program activities

· The organization must have a governing body

· The organization must be financially viable, and have financial statements publicly available.

· The organization must not expend more than 40 percent of total expenses on supporting services

Conclusions

Government donors are placed to provide substantial support to international health programs, but their support comes at an organizational cost. Before undertaking international government grants institutional capacity and staff skills should be assessed and institutional structures revised to accommodate the complexities of international government donor funding.

Partnerships with donor organizations are key to a long term government funding stream. These need to be established at all levels of the organization, from Executive Director down. Informal dialogue is often the conduit through which critical funding information is transmitted. Channels of communication must be maintained even in the face of staff turnover or organizational change.

Donor priorities and restrictions need to be taken in to account, as well as bureaucratic hurdles such as grant periods and reporting requirements. Ideally senior staff should work with high level staff within the donor agency to get programs agreed in principle before the proposal process begins. Where this can not be managed program and/or development staff should at least work with program or desk officers.

As the proposal and budget is submitted programs should work hard to keep track of what is promised to who, and the restrictions on each of the grants. Although there is a trend in international government giving to provide budget support for the organization, restricted program funds are still commonplace. Even budget support comes with pitfalls, as each donor will provide budget support via a different mechanism, so either way there is a substantial burden of monitoring and reporting on the organization.

Securing funding for an international health program from a government donor is complex. This outline should provide the foundation for beginning to think how to get a project funded, but is only the first step in a long process. Further information can be found on donor websites (see below) but there is also a wealth of information available from other organizations, organizational coalitions and fro international fundraising professionals.

Website Resources

Australia AUSAID http://www.ausaid.gov.au/

Austria ADA http://www.ada.gv.at/

Belgium DGDC http://www.dgdc.be/
Canada CIDA http://www.acdi-cida.gc.ca/index.htm

Czech Republic MFA http://www.mzv.cz/

Denmark DANIDA http://www.um.dk/en/menu/DevelopmentPolicy/

Finland MFA http://global.finland.fi/

France AFD http://www.afd.fr/jahia/Jahia/lang/en/pid/18

Germany FMECD http://www.bmz.de/en/index.html

Greece MFA http://www2.mfa.gr/

Hungary MFA http://www.mfa.gov.hu/kum/en/bal/

Iceland MFA http://www.mfa.is/

Ireland DFA http://www.dci.gov.ie/

Italy MFA http://www.esteri.it/eng/2_10_128.asp

Japan JICA http://www.jica.go.jp/english/

Korea MOFAT http://www.mofat.go.kr/mofat/index.jsp

Luxembourg MFA http://www.mae.lu/

Mexico MFA http://www.sre.gob.mx/english/

Netherlands MFA http://www.minbuza.nl/

New Zealand NZAID http://www.nzaid.govt.nz/

Norway NORAD http://www.norad.no/

Poland MFA http://www.msz.gov.pl

Portugal MFA http://www.esteri.it/eng/

Slovak Republic MFA www.foreign.gov.sk/En/

Spain MFAC http://www.mae.es/en/MenuPpal/Ministerio/

Sweden SIDA http://www.sida.se/

Switzerland SDC http://www.deza.admin.ch/index

Turkey MFA http://www.esteri.it/eng/3_22_42_231.asp

UK DFID http://www.dfid.gov.uk

US USAID http://www.usaid.gov

References

1. Sachs JD. Macroeconomics and Health: Investing in Health for Economic Development: World Health Organisation; 20 December 2001

2. Shaping the 21st Century: The Contribution of Development Co-operation. Paris: OECD Development Assistance Committee; May 1996

3. Road Map Towards the Implementation of the United Nations Millennium Declaration

Report of the Secretary General: United Nations; 6 September 2001 A/56/326.

4. The DAC Journal: Development Co-operation Report 2001 - Efforts and Policies of the Members of the Development Assistance Committee: OECD; March 2002 Issue 3, Vol 1.

5. (DFID) DfID. Tools for Development: A handbook for those engaged in development activity: Government of the United Kingdom; September 2002.

Acronyms

AFD Agence Française de Developpement

EU European Union

DFID Department for International Development (Government of the UK)

GDP Gross domestic product

GNI Gross national income

INGO International non-governmental organization

JICA Japan International Cooperation Agency

MDG Millennium Development Goals

MFA Ministry of Foreign Affairs

NGO Non-governmental organization

ODA Official Development Assistance

OECD Organization for Economic Co-operation and Development

UN United Nations

USAID United States Agency for International Development

G-8 Group of Eight

Canada, France, Germany, Italy, Japan, United Kingdom, United States and the Russian Federation.

G-77 Group of Seventy Seven

Loose coalition of developing nations

OECD Countries

Australia Netherlands

Austria New Zealand

Belgium Norway

Canada Poland

Czech Republic Portugal

Denmark Slovak Republic

Finland Spain

France Sweden

Germany Switzerland

Greece Turkey

Hungary United Kingdom

Iceland United States

Ireland

Italy

Japan

Korea

Luxembourg

Mexico

OECD Mission Statement

The OECD groups 30 member countries sharing a commitment to democratic government and the market economy. With active relationships with some 70 other countries, NGOs and civil society, it has a global reach. Best known for its publications and its statistics, its work covers economic and social issues from macroeconomics, to trade, education, development and science and innovation.

The OECD plays a prominent role in fostering good governance in the public service and in corporate activity. It helps governments to ensure the responsiveness of key economic areas with sectoral monitoring. By deciphering emerging issues and identifying policies that work, it helps policy-makers adopt strategic orientations. It is well known for its individual country surveys and reviews. The OECD produces internationally agreed instruments, decisions and recommendations to promote rules of the game in areas where multilateral agreement is necessary for individual countries to make progress in a globalised economy. Sharing the benefits of growth is also crucial as shown in activities such as emerging economies, sustainable development, territorial economy and aid.

Dialogue, consensus, peer review and pressure are at the very heart of OECD. Its governing body, the Council, is made up of Representatives of member countries. It provides guidance on the work of OECD committees and decides on the annual budget. It is headed by Donald J. Johnston, who has been Secretary-General since June 1, 1996. The OECD’s 30 member countries appointed Angel Gurría as Secretary-General of the Organisation from 1 June 2006.