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Frequently Asked Questions on the New Funding Model

1. Why has the Global Fund adopted a new funding model?

The Global Fund needs to invest more strategically, to make the most of its resources and maximize the impact of its grants. The purpose of the Global Fund’s new funding model is to invest as effectively as possible, to reach as many people affected by the disease as possible. The new funding model ensures predictable funding for those countries with a high disease burden and low ability to pay, and incentives have better performing interventions.

2. What are the key features of the new model?

The Global Fund changed its funding model to make a bigger impact against the three diseases. It is designed to have predictable funding, to reward ambitious vision, to work on more flexible timings and with a smoother, shorter process that ensures a higher success rate of applications.

    • The bigger impact is achieved by focusing more resources on countries that have the highest disease burden and lowest ability to pay.
    • By introducing the idea of an ‘allocation’ for each country that meets the eligibility requirements, the Global Fund can provide predictable funding, and will communicate the financing levels to countries up-front.
    • We reward ambitious vision by having a pool of competitive ‘incentive’ funding available, to allocate additional funds to funding requests that make a powerful case for impact based on their National Strategic Plan (NSP) or investment case. As more funds become available, the Global Fund will be able to award further grants for ambitious unfunded requests.
    • Another big change is to move away from the Rounds-based competition with its set application date, and allow countries to apply at a flexible time that meets their own national schedules, within the 2014-2016 time frame.
    • In the new model, prioritized interventions will be included in the initial indicative funding request, and grants will be disbursement-ready, resulting in a shorter process overall. By reducing complexity, we plan to cut a lengthy process that used to take 2 years down to an average of 10 months. (Please note that some countries with low capacity and lack of a robust NSP may require longer preparation time). In every case the process should also be smoother as Global Fund teams actively support countries as they prepare their funding application, in order to improve the quality of the applications and the overall success rate.


3. How is the new funding model different from the previous Rounds-based model?

First, all eligible applicants will receive an indicative funding amount, their allocation, for all eligible diseases for a three-year period. They will seek funding from this allocation when it suits them best, according to their own national planning cycles.
The new funding model acknowledges the important country dialogue that happens in-country, and encourages inclusiveness in order to ensure that discussions on health and development can form the basis of a funding request to the Global Fund.
The Global Fund provides a country-level program split for the total allocation amount which is discussed early on by the UCCM during the country dialogue process. The UCCM will agree on the split of funding between the eligible diseases and HSS, and then submit a funding request (called a concept note). A concept note can be submitted for each disease and HSS separately or together. For countries with high TB and HIV co-infection rates, one joint TB and HIV concept note should be submitted.
Following the concept note review by the Technical Review Panel (TRP) and the Grant Approvals Committee, grant-making will occur. After a second Grant Approval Committee review, the grant will then be presented to the Board for approval.

4. What inputs go into the allocation formula?

The most significant inputs to the allocation formula are disease burden and ability-to-pay (income level). The allocation formula is based on disease burden, income level, external financing and Minimum Required Level (this is to ensure that a country that has been over-allocated in the past is gradually adjusted to a fairer allocation over time).
The Global Fund will then use qualitative factors to adjust the indicative funding amount for each country; these qualitative factors include previous grant performance, impact, increasing rates of infection, absorptive capacity, and risk. These factors could lead to both upward and downward adjustments to the amount that is initially derived by the allocation methodology. A final adjustment is made during country dialogue, once a country’s willingness-to-pay commitments are confirmed.

5. What is the willingness-to-pay (WTP) policy?

Countries can access the full amount of their indicative funding allocation if they make additional government commitments beyond the minimum counterpart financing thresholds. WTP commitments are forward looking with a duration of 3 years. The policy of WTP encourages countries to demonstrate their financial commitment to the three diseases, thereby ensuring the sustainability of the responses.
The Board decision to include WTP as a qualitative factor that determines the final allocation supports core Global Fund principles of country ownership, additionality and sustainability. The exact WTP requirements by income classification are not yet available – this will be finalized by the end of 2013.

6. Where do country bands fit in?

Once the Global Fund has allocated indicative funding to all eligible countries, these will be separately grouped into one of four country bands. At its March 2014 meeting, the Global Fund Board will approve the composition of and the total funding for each band.
The Band composition will be determined by income level and disease burden:
Band 1 – Lower income, higher burden
Band 2 – Lower income, lower burden
Band 3 – Higher income, higher burden
Band 4 – Higher income, lower burden

7. Can you please explain the funding terms? What is the difference between indicative and incentive funding?

In the new funding model, there are two types of funding available. Indicative funding is derived from an allocation formula for each country and adjusted based on qualitative criteria. It should represent predictable funding to support countries’ prioritized interventions and activities.
Incentive funding is a separate reserve of funding that encourages ambitious requests for programs with a potential for increased, quantifiable impact. It is made available, on a competitive basis, to applicants in the same Band, whose requests are based on robust national strategic plans or a full expression of prioritized demand for strategic interventions, based on a program review. Applicants apply for incentive funding by submitting an ‘above indicative’ request in the concept note.
The Grants Approvals Committee determines final funding amounts, and whether or not a country will be awarded additional incentive funding, based on the recommendation of the Technical Review Panel. In such cases, a country is awarded both funds at the same time. The total recommended upper-ceiling then moves to grant-making.
While Band 4 countries and regional applicants are encouraged to submit their full expression of demand by including an ‘above indicative’ request in their concept note, they are not eligible for incentive funding.

9. When will I know how much money I will be allocated?

By the end of March 2014, funding allocations for 2014-2016 will be communicated to all eligible countries. Countries will be provided their total allocation amount for the eligible diseases. Information on the suggested program split will also be communicated. Countries will, however, have the latitude to deviate from the suggested program split, providing justification for doing so. It is important to note that funds for HSS should be taken from the total disease allocation.

10. What should we be doing to prepare for the new funding model?




    • The most urgent action is for countries to ensure they have epidemiological data at sub-national levels, including for key affected populations (KAPs) in order to strengthen strategic plans and prioritize interventions. Applicants should work with their technical partners to secure this, and discuss with their Global Fund Country Team if additional technical assistance if necessary. Countries without this data will struggle to target limited resources to where they will have the greatest impact.


    • Countries should continue and/or expand their national dialogue with key stakeholders, including the Global Fund Secretariat, bilateral and multilateral donors, technical partners, civil-society organizations (in particular key affected and most-at-risk populations) and other partners, around the goals and implementation arrangements for their national strategies and disease programs. Consider cross-disease collaboration for greater impact.


    • According to their national planning cycle, countries can assess the strength of their national health strategy and their national disease-specific strategies for HIV, tuberculosis and malaria, identifying programmatic and funding gaps. If necessary, steps should be taken to strengthen these strategies, organizing joint reviews (e.g. Joint Assessment of National Strategies (JANS), if required.


    • CCMs should review the six CCM eligibility requirements, to assess potential issues and make any necessary improvements. This includes the requirement to conduct inclusive and transparent country dialogue and ensuring that the selection process for Principle Recipients is open and transparent (Requirements 1 and 2). Both of these are eligibility requirements that will be checked at the time the concept note is submitted. Requirements 3, 4, 5 and 6 are assessed annually through the CCM Performance Assessment tool, with the support of a technical assistance (TA) provider. From 2015, CCMs will be required to comply with these 6 Requirements in order to be eligible to receive Global Fund funding. Over the course of 2014, CCMs are encouraged to conduct a self-assessment; choose a TA provider to support the assessment and develop an action plan; and implement the plan to ensure that these standards are met from 2015 onwards. Guidance is available on the Global Fund website. http://www.theglobalfund.org/en/ccm/guidelines/


    • Work with current and potential implementers to strengthen their capacity and improve program performance. Since future allocations will be influenced by grant performance, it is in the best interest of the CCM to ensure that they select implementers who are able to manage grants to achieve the greatest impact. Each organization being considered as an implementer needs to be reviewed against grant implementer minimum standards, by both the CCM and the Global Fund Secretariat.


    • Work with your governments to increase their national financial commitments to health. National governments are expected to partner with the Global Fund in funding health care interventions. All countries will be required to contribute funding to the three diseases and their health system overall in order to access Global Fund funding. Countries need to be able to report on government expenditures to show they have fulfilled their commitments.


11. What if my application is not ready by the time my current grant runs out?

Applicants with grants ending in 2014 can seek an extension of time to continue activities until December 2014. If funds are needed for the extension and are requested (i.e. a ‘costed extension’), these funds would be taken from the countries 2014-2016 funding allocation.
The Global Fund will be updating the extensions policy at the March 2014 Board Meeting and additional information will be shared after that point.
Applicants should contact their Country Team to discuss the current options available. In an effort to support the development of robust applications, assistance is available from the Global Fund and donor partners on NSP strengthening, epidemiological data collection, strategic investment discussions and country dialogue.