REPORT On GLOBAL GIVING A New Era of Philanthropy and Investment in Global Health
7Q FOR UK AID CHIEF JUSTINE GREENING
Global Leaders Talk Trends
Assessing Private Sector Support for Global Health
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YOU’RE CHANGING THE WORLD.
No. 12 AFFILIATES
Central African Republic
© Martin Roemers/Panos
2. L etter from the editors
Marshall Stowell, Editor-inChief , Impact Rolf Rosenkranz, Editor, Devex
3. REPORT ON
Democratic Republic of Congo
• 6 Donor Government Analysis • 10 Donor and Recipient Government Analysis • 14 Private Foundation Donor Analysis • 18 Corporate Foundation Donor Analysis • 28 Emerging Models: Impact Investing
4. s even Questions
• 4 U.K. Secretary of State for International Development Justine Greening
8. T rends Talk
• 8 USAID Assistant Administrator for Global Health Dr. Ariel PablosMéndez • 20 Unilever CEO Paul Polman • 25 Minister of Health & Social Welfare Walter T. Gwenigale, Government of The Republic Of Liberia • 26 UNITAID Executive Director Dr. Denis Broun • 30 Rockefeller Foundation President Judith Rodin, Ph.D.
12.s Pecial Features
• 12 Setting Health Priorities: Strategy versus Tactics By David E. Bloom & Elizabeth T. Cafiero, Harvard School of Public Health, Michael Chu, Harvard Business School • 16 Small Global Health Investments Can Yield Big Results By Amy Lieberman, Devex • 22 Assessing Private Sector Support For Global Health By Christine Dugay and Peter Troilo, Devex
31.P olicy matters
• 31 Europe Policy News By Michael Chommie, Director, PSI/Europe • 32 U.S. Policy News By Sally Cowal, Senior Vice President & Chief Liaison Officer, PSI • 33 Policy Maker Op Eds: By Rep. Ted Poe (R-TX) and Rep. Rosa Delauro (D-CT)
• 34 Lisa Witter, Partner & Chief Change Officer, Fenton • 35 Raj Kumar, Co-Founder & President, Devex • 36 Karl Hofmann, President & CEO, PSI
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MANAGING EDITOR & CREATIVE DIRECTOR
Rolf Rosenkranz, Devex
PSI Andrea Edwards
Associate Manager, Corporate Marketing
Cate O’kane Deputy Director, Corporate Marketing, Communications & Advocacy
Elizabeth Petoskey Consultant, Advocacy
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PSI is a global non-profit organization dedicated to improving the health of people in the developing world by focusing on serious challenges like a lack of family planning, HIV and AIDS, barriers to maternal health and the greatest threats to children under five, including malaria, diarrhea, pneumonia and malnutrition. psi.org C o n n ect w ith P S I cover photo: © Martin Roemers/Panos
Population Services International
Letter from the editors
he complex landscape of philanthropy and investment in global health is undergoing remarkable changes. Traditional government funders, critical for bringing life-saving health interventions to scale, are increasingly partnering with corporations, foundations, philanthropists and low- and middle-income governments. Data from the Institute of Health Metrics and Evaluation shows that highincome donor government funding to global health increased for approximately a decade, leveling off in 2009. Health has also remained a top priority among private foundations since 2001, according to the Foundation Center. Corporations and their foundations increasingly seek hands-on, longterm relationships with their nonprofit partners; “return on investment” has gained new meaning with the emergence of impact investing in development. Health priorities, too, are
Donor government funding for global health experienced increases for approximately a decade, leveling off in 2009.
and predictions for global health after 2015. Dr. Walter Gwenigale, the Republic of Liberia’s Minister for Health and Social Welfare, shares his thoughts on how global health funding should be spent, and Unilever CEO Paul Polman discusses with PSI President and CEO Karl Hofmann ways the global community can rally to deliver more effective, efficient and equitable aid to the most needy. The research is derived from a desk review of reports by donors and organizations which examine development funding, as well as interviews specifically conducted for this purpose with representatives from key funding organizations. Some time frames vary by section; where data on global health spending was not available, information on development aid was used instead. Finally, some numbers in this report are derived from our own calculations or those reported by others. Data is cited to a list of references in the back of the magazine. Our hope is that the report will initiate thoughtful conversation about the future of global health financing and inspire collaboration that leads to sustainable global health solutions. Sincerely,
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> shifting as the needs of those in the partner countries evolve. In this issue of Impact magazine, PSI partners with Devex, the leading source of international development news, analysis and advice, and Fenton Communications to bring you a special report on the new era in philanthropy and investment in global health. The report examines giving to global health in five categories: governments in high-, middle- and low-income countries; corporate and private foundations; as well as impact investors and other emerging sources of funding. We spoke with U.K. Secretary of State for International Development Justine Greening about the Department for International Development’s revised global health strategy
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GLOBAL GIVING Trends
G OVERNMENT SECTOR: DONOR ANALYSIS
1 0 G OVERNMENT SECTOR: DONOR AND RECIPIENT ANALYSIS
18 F OUNDATION
SECTOR: CORPORATE DONOR ANALYSIS
14 F OUNDATION
SECTOR: PRIVATE DONOR ANALYSIS
28 E MERGING
MODELS: IMPACT INVESTING
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with UK Secretary of State for International Development
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Impact: The U.K. government's global health strategy focuses on three key areas: global health security, international development and trade for better health. Why? Justine Greening: The “Health is Global” strategy published in 2011 sets out the responsibilities which government departments (beyond the Department of Health) have for delivering health outcomes in the U.K. and internationally. The refreshed strategy shows clear outcomes for research, the management of pandemic flu, health in conflict situations and priorities for improving health in the poorest countries. This is helping departments to invest their efforts in more concrete goals with the greatest impact. For DFID, this means investing in health programs and research to improve the lives of the very poorest people. For example, we have committed to providing an additional 24 million women access to family planning by 2020, averting 20 million unwanted pregnancies
and saving the lives of 42,000 girls and women. And by investing in research and development and countries’ health systems, we are helping the poorest people get access to life-saving medicines.
Impact: Bilateral funding for the health sector has steadily increased since 2008. Do you expect this trend to continue? If so, which areas and regions will DFID prioritize? JG: The U.K. government is committed to improving the health and well-being of the world’s poorest people. After reviewing our bilateral programs in 2010, our bilateral health work has changed to focus on fewer countries with the most need. This means countries affected by conflict or fragility and those not expected to meet the Millennium Development Goals on reducing child mortality, improving maternal health and combating HIV/AIDS, malaria and other diseases.
Secretary Greening meets Sylvia (center), a villager from Loiturerei in Kenya. Sylvia lives in the Turkana region in the north – where up to one in three children were malnourished at the height of the 2011 drought. Hers is one of 27,000 households in the area that received U.K. aid to help them cope with droughts. During the visit, Sec. Greening announced new aid to treat thousands more children and women who continue to suffer from malnutrition across the region. She also pledged to target aid to help prevent future food disasters in the Horn of Africa.
Since 2009/2010 our bilateral support to the health sector has increased by 30 percent, and last year DFID provided almost 1 billion pounds ($1.5 billion) in bilateral aid to the health sector. Our priority is spending money in the most effective and efficient way to achieve the most impact. For example, we know that investment in reproductive, maternal and newborn health saves lives and is highly cost-effective. So we have almost tripled aid to these health areas since 2009/2010, placing women and girls at the heart of the U.K.’s development assistance.
Impact: One of DFID’s structural reform actions is to boost wealth creation. How can the ripple effects of better health in developing countries translate to the growth of emerging markets and a stronger global economy? JG: Many developing countries will have growing and more youthful populations over the coming decades. This can be a great opportunity for economic growth, as it enables individuals and countries to participate more fully in the global economy. But this will only happen if people are healthy, educated and have access to meaningful employment. Unequal access to quality healthcare and education reinforces wider inequities, creating a vicious circle where poor people are less healthy, which limits their life opportunities and their ability to contribute to the economy. A longterm study in Bangladesh found that a family planning program, together with improved support for maternal and child health, led to women being better educated, earning more, and to their families owning more assets. Empowering women in ways like this is crucial to growing economies.
Middle-income countries like India, a top recipient of DFID aid in 2012, are becoming donors themselves. What effect do you see these countries having on the development landscape over the next 5–10 years?
JG: It is good that middle-income countries are playing a greater global role in development. Their recent and ongoing experience of domestic poverty reduction can provide useful lessons and approaches for poorer countries. The size and future growth of their economies also means that they can help poorer countries through trade and investment, as well as aid. My hope is that by building partnerships, sharing knowledge and combining experiences with countries like India and others, we will maximize our collective impact on the global development challenges.
Impact: Improving the lives of women and girls is also a structural reform action. One trend we see in our data is an increased focus on funding for health interventions targeting girls and women. What types of partnerships or funding mechanisms do you think need to be in place to reach more girls and women with the health products and services they need? JG: Women and girls are a priority for me and for DFID. DFID supports a wide range of partnerships and mechanisms to meet the health requirements of women and girls, but it is important to encourage country-led plans to address gaps in services. Achieving this requires support from politicians, communities, government partners, the private sector, civil society and academia.
uses the private sector to provide access to the most effective anti-malaria drugs that even the poorest households can afford, and GAVI, a public-private partnership which brings in financial contributions from private companies and foundations, to solve global health problems.
Impact: How does DFID perceive global health in the post-MDG 2015 era? JG: The post-2015 development framework will shape future foreign assistance and the broader agenda of making progress for the world’s poorest people, and the U.K. is chairing high-level discussions. But while discussions are taking place, the U.K. will continue to support developing countries in achieving the MDG targets up to and beyond 2015. This includes the health needs
The size and future growth of [middle income] economies also means that they can help poorer countries through trade and investment, as well as aid.
Partnership is cited as key to achieving the goals of the Global Health Strategy. Going forward, what role will the private sector play in supporting DFID's health projects?
JG: You cannot get sustainable development without the private sector, and you cannot deliver health care in remote and underdeveloped countries without using private-sector supply chains. The private sector and foundations are already key partners with us in many ways. They deliver a large share of health services across the developing world, sit with us on the governing boards of international health funds, make the drugs and treatments that the world needs, are significant donors to global health, and work with us on ways to encourage greater private sector involvement. When polio is finally eradicated, it will be the result of a broad coalition of governments, private foundations, pharmaceutical companies, multilateral agencies and charitable organizations. The private sector will continue to play an increasing part through innovative bodies such as the Affordable Medicines Facility for Malaria, which
affecting the poorest people, from neglected tropical diseases to the increasing burden of non-communicable diseases like diabetes. The health and empowerment of women and girls is particularly important. Comprehensive sexual and reproductive health and rights, particularly for young women, remain critical to meeting the needs of the world’s poorest people. Nevertheless, it is encouraging to see health spending increase, with more countries making commitments to achieve universal health coverage and the private sector improving access to vaccines and medicines. There will remain a need for investment in research to find better tools and technologies, and to reach the people who need them most. n
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health experienced significant increases for approximately a
decade, largely driven by HIV and AIDS funding between 2002 and 2010. The report defines donor governments as the 23 members of the Organisation for Economic Co-operation and Development/ Development Assistance Committee (OECD/DAC). This section charts the flow of funding to health sectors and regions from 2005 to 2010, ranking the top donors based on their total expenditure for this period.
THE Numbers 10 TOP DONOR GOVERNMENTS (2005-2010) TOTAL AMOUNT SPENT
AMOUNT SPENT ON GLOBAL
ON GLOBAL HEALTH
HEALTH AS % OF TOTAL BUDGET
Country 1 U.S. 2 U.K. 3 Canada 4 Germany 5 Japan 6 Netherlands 7 France 8 Spain 9 Sweden 10 Australia
Country 1 Luxembourg 2 Ireland 3 Norway 4 Sweden 5 U.K. 6 Netherlands 7 U.S. 8 Australia 9 Canada 10 Belgium
Total $25,575,000,000 $5,286,000,000 $1,927,000,000 $1,908,000,000 $1,848,000,000 $1,731,000,000 $1,495,000,000 $1,370,000,000 $1,303,000,000 $1,221,000,000
Source: Total of three OECD CRS Sub-Sectors Unit: Current US$ Three sub-sectors were used: Health Total, Population Policies/Programs and Reproductive Health, and Other Social Infrastructure and Services-Social Mitigation of HIV/AIDS.
Source: International Monetary Fund Unit: US$, 2011 Value used in converting annual expenditure to US$ 2011 was GDP deflator Site used for conversion: www.measuringworth.com
Source: Institute for Health Metrics and Evaluation (IHME 2011).
Total expenditure on global health by OECD/DAC’s 23 members. Top 10 donors gave about 88% of the total expenditure in 2006, and 91% in 2010.
South Korea’s funding for global health:
Source: OECD Creditor Reporting System (2012).
See works cited page (inside back cover) for complete information on sources.
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Behind THE Numbers Development assistance for health doubled from 2001-2008, dropping off in 2009
Total 0.24% 0.14% 0.13% 0.11% 0.093% 0.088% 0.087% 0.065% 0.062% 0.059%
Source: OECD Creditor Reporting System (2012).
expenditure on global
Behind THE Numbers Health Sector Breakdown The graphic below shows the total amount of funding that was spent on each health sector from 2005 to 2009.
MATERNAL, NEWBORN AND CHILD HEALTH $17,200,000,000
HEALTH SECTOR SUPPORT $4,900,000,000
NON-COMMUNICABLE DISEASES $1,000,000,000
Sources: IHME development assistance for health (DAH) Database 2010 and DAH Database (Country and Regional Level) 2010. DAH includes financial and in-kind contributions for activities aimed at improving health in low- and middle-income countries.
Development assistance for health for malaria control increased by 50% in 2008 and 2009.
More USG funding was spent on HIV than any health area from 2001-2010.
Source: IHME (2011).
Source: Henry J. Kaiser Foundation (20012).
35% USG FUNDING 2001
64% USG FUNDING 2010
REGIONAL CHANGES IN FUNDING FOR HEALTH 2005-2009
10 TOP Recipients of global health funding 2004-2009 TANZANIA
Sub-Saharan Africa $3.9B to $7.6B South Asia $1.3B to $1.9B East Asia and the Pacific $1.1B to $1.5B
Source: IHME Statistical Annex (2011).
Latin America and the Caribbean $1.5B to $1.2B Eastern Europe and Central Asia $664M to $632M Middle East and North Africa $819M to $555M Figures rounded. Source: IHME (2011).
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Dr. ArielAssistant Pablos-Méndez Administrator for Global Health, USAID DR. PABLOS-MÉNDEZ joined the USAID leadership team with a vision to shape the Bureau for Global Health's programmatic efforts to accomplish scalable, sustainable and measurable impact on the lives of people in developing countries as envisioned in President Obama's Global Health Initiative. He talks to Impact about the benefits of public-private partnerships, USAID's efforts to promote girls and women's health and more.
Impact: What is the relationship between public health and economic growth? APM: Health status clearly is correlated with economic growth, and causality appears to go in both directions: Higher economic status leads to better health, and better health status enables greater economic growth. Healthier populations tend to have higher workforce participation, and the productivity of the workforce is higher in healthier populations. Each contributes separately to economic growth. Healthier populations live longer, which increases returns to investment in skills development, improving workforce participation and productivity.
Working together, foundations and the public sector can make powerful, catalytic change.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Evidence is growing that early childhood health status, especially nutrition, has effects on adult productivity and cognition. Health status is a form of human capital that contributes to productivity and, hence, economic growth.
Impact: From a private investment and donor standpoint, what financing models are the most sustainable and why? APM: The number of models available to both global health practitioners and private-sector actors has grown dramatically over the past decade and shows great promise for global health along the full development to delivery 8
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continuum. Mechanisms range from the traditional – including philanthropic investments on social returns and private-sector investments (debt and equity) focused solely on financial returns - to a range of emerging tools, such as impact investing, that blend social and financial returns to investors. Other mechanisms are being effectively used to shape markets, making them more attractive for private-sector investment. For example, the GAVI Alliance has implemented an Advance Market Commitment for pneumococcal vaccines incentivizing manufacturers to produce a sufficient supply of pneumococcal vaccines at a guaranteed price. All of these mechanisms must be evaluated and designed to maximize impact and generate returns for investors and innovators. To this end, USAID's new Center for Accelerating Innovation and Impact is focused on identifying and implementing market-based tools to leverage new sources of capital to further drive sustainable improvements in global health.
Impact: As more middle-income countries become independent donors, what actions should they take to better address the health needs of their own populations? APM: As countries evolve to become health donors, it is critical that they ensure effective and efficient health systems at home that serve the continuum of needs (public health to tertiary care) in an economically viable way for both individuals and a country's economy. Countries should ensure equitable access to quality services of the level and type their populations require. Resource mobilization, pooling and allocation should be done efficiently and in a manner that protects individuals and households from catastrophic expenditure on healthcare.
Dr. Pablos- Méndez meets a local official after watching students at an elementary school in Senegal demonstrate how to effectively hang an insecticidetreated net.
APM: Focused investments in “game-changing”
Impact: Going forward, what gaps should corporations, or public-private partnerships, fill in the area of global health development?
APM: Now, more than ever, corporations are finding ways to collaborate with NGOs, governments and others in the private sector to bring down traditional market barriers in global health. Across the value chain, the private sector plays a pivotal role in addressing key bottlenecks by leveraging its people, products and capital resources to drive innovation in developing markets. In doing so, private-sector participation in global health is increasingly resulting in both societal gains and gains to the firm's bottom line – the creation of shared value. Moving forward, the pursuit of shared value will incentivize companies to utilize their core competencies to tackle the global health issues they are uniquely qualified to address.
Impact: Going forward, what gaps should private foundations fill in the area of global health development? APM: Private foundations have a rich history of achieving innovative, sustainable and replicable
solutions to global challenges, such as poverty, global health, human rights and climate change. Foundations can take risks public donors cannot, while a public donor can provide continuity and credibility built up over time. Working together, foundations and the public sector can make powerful, catalytic change. USAID and foundations can collaborate through sharing of networks, expertise, resources and joint innovation to undertake challenges that no one organization can solve on its own. For example, the Global Alliance for Improved Nutrition, an alliance supported by USAID, the Bill & Melinda Gates Foundation, Rockefeller Foundation and others, broadens and deepens impact in reducing mineral deficiencies among the world's nutritionally vulnerable people.
Impact: USAID Administrator Dr. Rajiv Shah has said the agency’s “largest opportunities to improve human health…lie in extending our reach to the 80 percent who lack access to health facilities.” Can you provide an example of areas where you feel investments in innovation have the most potential to expand access to health care – particularly for girls and women?
innovations can dramatically improve health for the poorest by increasing their access to life-saving interventions and care, particularly at the community level. Low-cost innovations that are more easily administered by less-skilled health workers; point-of-care diagnostics; and approaches that use mobile phone technologies to provide services, information and monitor patient outcomes have the potential to vastly expand the reach of health-care workers and reduce some of the transportation, time and cost barriers that often prevent people from seeking care. USAID invests in innovations, such as these through several different channels, including product development partnerships and Grand Challenge for Development programs. For example, through our Saving Lives at Birth Grand Challenge – a USAID partnership with the Gates Foundation, the Governments of Norway and the U.K., and Grand Challenges Canada – the partnership is funding the development of a needle-free and non-refrigerated treatment for post-partum hemorrhage, a leading cause of maternal death and a mobile interactive voice system that helps mothers to assess the signs and symptoms of newborn and maternal ill-health in the weeks before and after birth. These and other innovations can contribute to substantial and sustainable progress against maternal deaths at the community level. USAID also is investing in the development of 1-percent Tenofivir gel – a microbicide that empowers women to protect themselves against HIV. Using innovation to expand health care to girls and women is particularly important, as it creates a multiplying effect beyond the individual woman, extending benefits to her family and community. n
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DONOR & RECIPIENT ANALYSIS
eveloping countries are a very diverse group, ranging from the lowestincome nations to those with robust economies
and significant power in world affairs. All of these countries continue to face significant health challenges at home; therefore, they are both recipients and donors of health assistance. This section examines development assistance for health to developing countries between 2005 and 2010 and recipient coun-
THE Numbers 10 TOP DONOR & RECIPIENT GOVERNMENTS (2005-2009) AMOUNT RECEIVED IN DEVELOPMENT ASSISTANCE FOR HEALTH
amount spent domestically ON HEALTH
1 India $3,300,000,000 2 Nigeria $2,600,000,000 3 Tanzania $2,207,000,000 4 Ethiopia $2,152,000,000 5 Kenya $1,858,000,000 6 South Africa $1,818,000,000 7 Uganda $1,708,000,000 8 Mozambique $1,496,000,000 9 Zambia $1,450,000,000 10 China $1,280,000,000
1 China $398,500,000,000 2 South Africa $47,900,000,000 3 India $60,500,000,000 4 Nigeria $17,500,000,000 5 Tanzania $2,900,000,000 6 Ethiopia $2,400,000,000 7 Kenya $2,400,000,000 8 Zambia $2,100,000.000 8 Mozambique $1,500,000,000 10 Uganda $1,200,000,000
Units: US$, 2009 Source: of DAH: Institute for Health Metrics and Evaluation (IHME), Statistical Annex 2011.
Units: current US$ Source of general government expenditure on health* per capita: WHO National Health Accounts Source of country population: World Bank Calculation: (country population)(GGHE per capita)
tries’ declared spending on domestic health for the same period.
Behind THE Numbers Where BRICS countries ARE focusing their attention Brazil, Russia, India and China confront major health challenges domestically, while providing foreign assistance for development. From 2005 to 2010, each country increased its overall foreign assistance spending between 8 percent (South Africa) and nearly 24 percent (China). The chart below shows BRICS countries’ foreign assistance budget in 2010 and their global health focus areas.
SOURCE: “Shifting Paradigm: How the BRICS Are Reshaping Global Health.” Global Health Strategies (2012)
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*General government (excluding social security) expenditure on health refers to expenditures incurred by central, state/regional and local government authorities, excluding social security schemes. Included are non-market, non-profit institutions that are controlled and mainly financed by government units.
THE Numbers The chart below provides a closer look at development assistance for health to developing countries and their government expenditure on health from 2005 to 2009. The figures across the top show five countries that received the largest amount of health aid during this period. The figures across the bottom show five countries that spent the most on health domestically. The countries are divided based on the World Bank's income classifications. The countries highlighted in red landed on both the top five recipient and donor lists.
RECEIVED IN AID FOR HEALTH (2005-2009) Upper-Middle-Income Economies
Country 1 South Africa 2 China 3 Argentina 4 Colombia 5 Botswana
Total $1,818,000,000 $1,276,000,000 $1,035,000,000 $783,000,000 $560,000,000
Country 1 India 2 Nigeria 3 Zambia 4 Pakistan 5 Iraq
Total $3,279,000,000 $2,586,000,000 $1,447,000,000 $1,341,000,000 $1,127,000,000
Country 1 Tanzania 2 Ethiopia 3 Kenya 4 Uganda 5 Mozambique
Total $2,207,000,000 $2,152,000,000 $1,858,000,000 $1,708,000,000 $1,496,000,000
Country 1 Bangladesh 2 Tanzania 3 Ethiopia 4 Kenya 5 Mozambique
Total $33,152,000,000 $2,910,000,000 $2,433,000,000 $2,386,000,000 $1,517,000,000
Units: US$, 2009 Source of DAH: Institute for Health Metrics and Evaluation (IHME), Statistical Annex 2011.
SPENT ON HEALTH DOMESTICALLY (2005-2009) Country Total 1 China $398,524,000,000 2 Brazil $236,245,000,000 3 Russian Federation $196,001,000,000 4 Mexico $135,399,000,000 5 Turkey $128,127,000,000
Country 1 India 2 Ukraine 3 Indonesia 4 Nigeria 5 Egypt, Arab Rep.
Total $60,485,000,000 $25,130,000,000 $23,760,000,000 $17,512,000,000 $14,106,000,000
Units: current US$ Source of general government expenditure on health per capita: WHO National Health Accounts Source of country population: World Bank Calculation: (country population)(GGHE per capita)
here’s a new "it" economic bloc in town: Mexico, Indonesia, South Korea and Turkey or collectively known as MIST. Investors now look up to the MIST countries as the new haven for investments after markets in BRICS – Brazil, Russia, India, China, and South Africa – have gone slow these days. Awash with cash, MIST governments invest their money in health: They spent about 6.5 percent of their gross domestic product in health or higher than what BRICs collectively spent at 5 percent in 2010. The median health spending per capita is $640 in 2010 — that’s higher than the BRIC’s $525. The group, though, doesn’t rely too much on official development assistance to invest in their health sector. The level of health aid has, in fact, gone down these past years, and, collectively, health aid to MIST went down by 7 percent from 2010 to 2011. By being aid recipients and becoming aid providers, MIST countries are revolutionizing the development world and, as some argue, are changing the rules of the game. These emerging donors conduct their development work through south-south cooperation. - John Alliage Morales, Devex
Source: World Bank
See Works Cited page for full list of sources.
COUNTRY 1 China 2 South Africa 3 India 4 Nigeria 5 Tanzania 6 Ethiopia 7 Kenya 8 Zambia 9 Mozambique 10 Uganda
PER CAPITA $347 $930 $124 $136 $73 $42 $75 $90 $47 $118
1.3B 51M 1.2B 153M 43M 83M 39M 13M 22M 31M
BEYOND THE BRICS
PER CAPITA SPENDING ON HEALTH (2009)
Sources: World Health Statistics 2012. World Health Organization. 2009 World Population Data Sheet. Population Reference Bureau.
Cumulative spending on domestic health increased by more than $263B from 2005-2009 among the 130 countries surveyed.
Government health expenditure in 2010 was 18x higher than health funding received.
Source: IHME (2012).
Source: IHME (2012).
psi.org | impact
Setting Health Priorities:
Strategy versus Tactics
David E. Bloom, Elizabeth T. Cafiero, and Michael Chu
challenges. As resource limitations are a fundamental fact of life, choices necessarily have to be made about which challenges to address, and the best way to tackle them. In this piece, we discuss the distinction between the strategic and tactical components of priority setting in health.
State of play: priority setting in public health
There is no dominant approach to priority setting in the public health arena. Ethicists rely heavily on the principles of fairness and equity in deciding the allocation of resources1. Political scientists pay heed to the type of government and political participation in a country, the power and influence of stakeholders involved in decision-making, and the electoral implications of resource allocation decisions in health. Human rights lawyers and advocates focus on the extent to which different decisions will respect, protect, or fulfill human rights obligations under international treaties, and uphold particular norms and standards. Health economists typically rely on cost-effectiveness, focusing on the health effects achievable per dollar spent. Distinguishing between the ‘what’ and the ‘how’ in priority setting
Each of the foregoing approaches to priority setting has a corresponding set of biases, strengths and weaknesses. For example, ethicists and human rights specialists pay relatively little heed to the fact that some interventions have bigger health impacts than others per dollar spent. By contrast, health economists typically select health interventions by ranking them in order of their cost-effectiveness and going down the list until the health budget is exhausted. As such, they effectively decide which health conditions to address in the same way as they decide which interventions to use in addressing them. However, it is essential to employ differ-
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ent criteria to decide which health conditions deserve the most attention (in other words, the “what”) and which specific interventions to use to address them (the “how”). For example, in the health arena, public sector decision-makers may be concerned with diseases that affect poor or vulnerable groups or diseases that cause a great deal of premature mortality. Accordingly, strategic objectives will be set around these issues of importance (e.g., improving access to health care for poor or vulnerable groups). The questions and concerns taken into account to define the ‘what’ do not necessarily indicate how to best accomplish those strategic objectives. A different set of considerations – tactical considerations – will drive decisions about the ‘how’. Tackling the first layer will allow decisionmakers to identify priority areas. Once the priority areas have been identified, the second layer of priority setting allows for an answer to the question, ‘Which options for intervention deserve the most resources?’ (see Figure on page 13). At this level, one can use existing tools, such as cost-effectiveness analysis or political analysis, to decide between alternative interventions for reaching the aforementioned goals. As the chart on page 13 illustrates, among the important issues with the potential for large impact, those that have readily cost-effective interventions are good candidates for implementation. Those without such readily available interventions pinpoint areas for further research and development. Similarly, considerations such as political feasibility or saturation of actors in the space can be used to distinguish among the promising options for intervention.
This piece is part of a larger collaboration – Antares – between the Harvard School of Public Health and the Harvard Business School. Antares is focused on harnessing the power of private enterprise for public health. Priority-setting is a central theme of the research arm of Antares. For more information, visit www.hsph.harvard.edu /antares.
Scope for rethinking approaches and tools for priority setting
Under the circumstances described above, it is appropriate to determine the ‘what’ and the ‘how’ separately. Much work has been done on the latter2-8, and existing tools such as costeffectiveness analysis are helpful for defining action steps for individuals, organizations or governments to take. Given the changing nature of the health landscape, as this issue of Impact describes, there is scope for developing new approaches and tools to make better decisions about how to allocate human, financial or material resources to achieve strategic objectives in public health. Moreover, there is a need to link the two layers of priority setting to guide decisions about allocating public health resources. As famed Chinese military strategist Sun Tzu once said, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." n
David E. Bloom is Clarence James Gamble Professor of Economics and Demography in the Department of Global Health and Population, Harvard School of Public Health. Elizabeth T. Cafiero is a Research Analyst in the Department of Global Health and Population, Harvard School of Public Health. Michael Chu is Senior Lecturer at Harvard Business School and Managing Director and co-founder of the IGNIA Fund.
© Manprit Shergill
ealth decision makers throughout the world face a multiplicity of
References: ➊ Gruskin, S. and N. Daniels, Justice and Human Rights: Priority Setting and Fair Deliberative Process. American Journal of Public Health, 2008. 98(9): p. 1573-1577. ➋ Tromp, N. and R. Baltussen, Mapping of multiple criteria for priority setting of health interventions: an aid for decision makers. BMC Health Services Research, 2012. 12: p. 454. ➌ Center for Global Development, Priority-Setting in Health: Building institutions for smarter public spending. A report of the Center for Global Development’s Priority‑Setting Institutions for Global Health Working Group, Amanda Glassman and Kalipso Chalkidou, Editor 2012, Center for Global Development: Washington, DC. ➍ World Health Organization. CHOosing Interventions that are Cost Effective (WHO-CHOICE) 2012 [cited 2013 January 16]; Available from: who.int/choice/ en/. ➎ Murphy, S., S. Verguet, and R. Nugent, Tobacco Taxation in India: an Extended Cost Effectiveness Analysis (Poster Presentation). in The Global Cardiovascular Disease and Diabetes Forum Annual Meeting 2012: Seattle, WA. ➏ Laxminarayan, R., Public finance of tuberculosis treatment in India: an extended cost-effectiveness analysis, in Economics Seminar, Indian Statistical Institute 2012: New Delhi, India. ➐ Baltussen, R., et al., Multicriteria decision analysis to prioritize health interventions: Capitalizing on first experiences. Health Policy, 2010. 96(3): p. 262-264.
Tactical vs. Strategic Strategic importance low High Tactical consideration:
Cost-effectiveness of interventions
➑ Rudan, I., et al., Evidence-Based Priority Setting for Healthcare and Research: Tools to Support Policy in Maternal, Neonatal, and Child Health in Africa. PLoS Med, 2010. 7(7): p. e1000308.
PRIVATE DONOR ANALYSIS
lobal health has remained
a top priority among private foundations during the last several decades.
10 TOP PRIVATE FOUNDATION DONORS TO GLOBAL HEALTH (2006-2010)
Today, foundations remain
key players in global health because
1 2 3 4 5 6 7 8 9 10
of their ability to use funding to shape policy and broaden discourse around these issues. They also are critical to funding programs that when proven effective, attract government funding. This section looks at private foundation giving to international health from 2006
Foundation Bill & Melinda Gates Foundation Susan Thompson Buffett Foundation National Postcode Lotorif (Netherlands) Ford Foundation Bloomberg Family Foundation David and Lucile Packard Foundation William and Flora Hewlett Foundation Rockefeller Foundation Childrenâ€™s Investment Fund Foundation (U.K.) MacArthur Foundation
Cumulative Amount $8,000,000,000 $684,000,000 $242,000,000 $163,000,000 $160,000,000 $156,000,000 $105,000,000 $104,000,000 $100,000,000 $80,000,000
Primary source: The baseline data for this section is the Foundation Center's annual reports on the "Top U.S. Foundations Awarding International Grants to Health" (2006-2010). The center's data is based on grants of $10,000 or more awarded by approx. 1,000 of the largest private and community foundations. The center uses circa-year data and calculates year-authorized grants. Many foundations report their grants directly to the center. For the remaining foundations, grants are researched from 990-PF tax returns. The Packard and Buffett Foundations provided revised 2006-2010 data for this report.
1.3% INCREASE 2010
The 192 foundations launched since 1995 have helped to raise international giving levels. Of these newer funders, 69 gave at least $1M for international programs in 2010. Health received the majority of this funding. The largest new funder was the Bloomberg Family Foundation, formed in 2006, which focuses on public health and medical research.
Behind THE Numbers
Increases in private foundation funding for global health dropped in 2010.
The largest share of both U.S.based and overseas funding went directly or indirectly to developing countries, particularly to sub-Saharan Africa in 2008.
Source of figures above: Foundation Center (2010). See works cited page (inside back cover) for full source information.
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Behind THE Numbers
Health far surpassed all fields by share of international giving in 2010
TOP 10 CONTENDER:
T Percent of Dollars Total International Giving = $4.3 billion
Percent of No. of Grants Total No Grants = 13,954
Source: The Foundation Center, International Grantmaking Update, 2012. Based on all grants of $10,000 or more awarded by a sample of 1,330 foundations in 2010. 1 Includes grants for peace and security, foreign policy, promoting international understanding, and international affairs research/policy. 2 Includes grants for public affairs, philanthropy, and general grants to promote civil society. Civil society grants are also found in other categories, such as human rights and international development. 3 The Gates Foundation accounted for 2.8 percent of the total number of grants for health.
PUBLIC-PRIVATE PARTNERSHIPS: A MAINSTAY IN GLOBAL HEALTH PHILANTHROPY Foundations often leverage their funding, expertise and influence through international public-private partnerships. These partnerships can include other foundations, NGOs, nonprofits, corporations, governments and multilateral organizations. There is a clear trend toward issue-specific partnerships in global health.
GAVI received $325M from the Gates Foundation in 2000. Today, GAVI's donor list includes governments and other foundations, which in 2011 contributed $1.1B.
he Instituto Carlos Slim de la Salud (Carlos Slim Health Institute), a Mexicobased private foundation, was launched in 2007. There is little documentation available on the philanthropic work of the institute. However, based on major donations to prominent foundations the institute likely ranks among the top 10 global health private foundations. Recent institute initiatives include a $100 million commitment to the Clinton Foundation to fund, among other projects, 50,000 cataract surgeries in Peru, and $50 million over five years to Salud Mesoamérica 2015, a joint initiative with the Gates Foundation, the Inter-American Development Bank, and governments in Central America and the Mexican state of Chiapas.
The Stop TB Partnership spent $53M in 2006; 93% of the funding came from donor governments, $2.1M came from foundations and Novartis contributed $3.2M in drug donations. The Global Fund to Fight AIDS, Tuberculosis and Malaria launched in 2002 as an independent public-private partnership. It accounted for 25% of international funding for AIDS programs in developing countries in 2008.
What’s to come in 2013? Foundation Center survey findings suggested that private foundation giving would likely continue to show consistent, but very modest, growth in 2013. Projections are based on responses from the 2012 “Foundation Giving Forecast Survey” from 1,077 large and mid-size foundations across the country, combined with year-end economic indicators. Final giving figures for 2011 will be available this year.
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small global health investmentS can lead to
n 2008, PSI started pumping $500,000 privately raised funds to support Zambian public health clinics performing adult male circumcisions.
By Amy Lieberman, DEVEX
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It was a bold move, says Doug Call, Senior Regional Director of Southern Africa at PSI, despite support from local government and evidence from recent randomized controlled trials that showed a 60 percent reduced chance of HIV transmission for HIV-negative circumcised men. “It was risky on a number of fronts,” Call remembers. “The randomized controlled trials were published but there was and continues to be a backlash against male circumcision. We didn't know whether or not the donor environment in the U.S. would really get behind the idea to fund this.” PSI also did not want to make an investment and have it fall apart, Call says, over a project that was culturally loaded. By the end of 2008, PSI, through its partnership with the Zambian government, performed nearly 2,500 circumcisions. The next year, the program expanded to Zimbabwe – with more
than $1 million in private funding for the start-up initiative – and by 2011, the project received its first funding award from the U.S. Agency for International Development and then by the Bill & Melinda Gates Foundation in 2010. Now, PSI's voluntary medical male circumcision program has performed the surgical operation on more than 400,000 teenage boys and adult men in Southern Africa. The United Nations Children’s Fund, the Gates Foundation, USAID and the U.K. Department for International Development are backing its Zimbabwe project with an approximate collective $57 million, and the Zambia initiative is receiving roughly $39 million from USAID, the Gates Foundation and the U.S. Department of Defense. The programs continue to grow – in November 2012, a new phase in Zimbabwe expanded to circumcising male infants. Partners hope to soon roll out products that offer male adolescents and adults the chance to have the procedure done with a device that does not require the typical out-patient surgery, and painlessly cuts off circulation to foreskin over the course of several days.
People were skeptical about whether we would be able to scale this up, but it was very innovative and we had the support of the government.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> “People were skeptical about whether we would be able to scale this up, but it was very innovative and we had the support of the government,” explained Dr. Karin Hatzold, the Zimbabwe-based Deputy Director of Programs at PSI/Zimbabwe. “That helped in attracting other donors.” In today’s uncertain funding climate, investing a relatively small amount of privately raised money, time or effort into a fledgling global health project has become an increasingly popular way to get a project off the ground and catch the attention of a donor. It's about finding the value in what you already have, says Amanda Glassman, Director of Global Health Policy for the Center for Global Development, a Washington-based think tank. “You start to say, 'How can I do more with less and what is the code value for money?'” Glassman says. “There's not one easy answer, but it's more about identifying what the opportunities are to improve the amount of health we get for the money.” Tracking results in terms of costs incurred and possibly saved can be key to leveraging an investment, says Glassman. In the case of Julia Bunting, finding a way to scale up the delivery of an expensive contraceptive implant in Southern Africa meant taking one small action in the form of a single phone call. At the time, in 2011, Bunting led DFID's AIDS and reproductive health team. But she was also the Chair of the global Reproductive Health Supplies Coalition. The International Planned Parenthood Federation had contacted Bunting about worldwide access to contraceptive implants, which were then running in the markets at a largely unaffordable $22 to $25 a unit. Bunting reached out to the pharmaceutical company Merck, explained the cost problem, and then engaged in a series of talks with the company over the next four months. In June 2011, Merck announced it would reduce the price of the implants, Implanon, and place them on a sliding scale – a decision that has since
saved more than $15 million. “My director was really kind of excited and asked me to explain the process and I said to him, 'I phoned Frank,'” Bunting says of her contact at Merck. Bunting's colleagues lauded her direct approach as innovative. She disagrees. “What else would you do? You pick up the phone and talk to the person who can solve the problem you are trying to solve.” The United Nations Population Fund then opted for a similar, direct approach talking with the pharmaceutical company Bayer. This and subsequent public-private partnerships have saved upwards of $400 million on the distribution of contraceptive implants, Bunting says. “It's about reframing the issue and the investment and thinking outside of our small boxes,” says Lyndon Haviland, a global health consultant, when discussing ways to maximize global health investments. Haviland has worked in senior capacity for a variety of UN agencies and is now working for the GAVI Alliance, which is leveraging its child immunization campaign to achieve broader change – like stronger health systems and economies – thereby reaching a wider partnership base, as well. While PSI's VMMC program is targeted, the initiative presented many unknowns and prompted both speculative and creative thought processes. “One concern early on was if you circumcise a young man,” remembers Call, from PSI, “will they think they are immunized or invulnerable to HIV, and will they then go around having higher risk behavior?” PSI has used text messaging to stay in touch with patients following routine out-patient counseling sessions, reminding them to use con-
doms, reduce their number of sexual partners and wait until they are fully healed to resume sexual activity. Another lingering question was if young adult men could be convinced to have a surgical procedure, perceived as painful, to make them less vulnerable to HIV, even if they might never contract or transmit HIV. In Zimbabwe, PSI's mass media campaigns are helping to change public opinion about circumcision, involving women and making the new male post-surgery “look” sexy, Hatzold says. The more than 400,000 circumcisions performed in Southern and East Africa is still a drop in the bucket, considering the estimated 20 million sexually active HIV-negative men who are currently not circumcised and living in countries with high HIV-prevalence rates. “We have a long way to go,” Call acknowledges. Still, Paulin Basinga, a Senior Program Officer with the Gates Foundation's HIV team, says that PSI's VMMC program is on the right track. “We normally don't support programs for service delivery in countries because we want our funding to be catalytic,” Kasinga says.
A doctor prepares to circumcise a teenage male at a PSI clinic in Zimbabwe.
Yet PSI's service delivery work has been just that, significantly boosting the numbers of circumcised teenage boys and adult men in countries with high prevalence of HIV in a short period of time, eventually drawing a wide range of donor support. The program's foundation in evidence and controlled trials were a pull for the Gates Foundation, Kasinga says. “Our support with PSI through this program has been catalytic,” he says, “working closely with the governments and making sure we are implementing this plan, which has real potential for scale-up.” n
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CORPORATE DONOR ANALYSIS
orporate foundation support for global health has expanded significantly in the last decade. The 10 companies featured in this
section speak to improving the health and well-being of people worldwide in their foundation’s philanthropic objectives. Corporate philanthropy is evolving from standalone donations, corporate social responsibility and cause-related marketing to more hands-on partnership. This section focuses on corporate foundation giving to global health from 2006 to 2010.
THE Numbers 10 TOP CORPORATE FOUNDATION GIVERS TO GLOBAL HEALTH (2006-2010) Foundation 1 Abbott Fund 2 ExxonMobil Foundation 3 The Merck Company Foundation 4 Bristol-Myers Squibb Foundation 5 GE Foundation 6 PepsiCo Foundation, Inc. 7 Medtronic Foundation 8 The Pfizer Foundation 9 Eli Lilly and Company Foundation 10 Johnson & Johnson Family of Companies Contribution Fund
Cumulative Amount $77,000,000 $62,000,000 $47,000,000 $45,000,000 $31,000,000 $16,000,000 $14,000,000 $12,000,000 $11,000,000 $10,000,000
Sources: 1. Annual "Top U.S. Foundations Awarding International Grants to Health." Foundation Center (2006-2010). The center's data is based on grants of $10,000 or more awarded by approx. 1,000 of the largest private and community foundations. The center uses circa-year data and calculates year-authorized grants. Many foundations report their grants directly to the center. For the remaining foundations, grants are researched from 990-PF tax returns. The following foundations provided data directly for this report: Abbott Fund (2006-10); ExxonMobil (2010, total represents only cash grants from HQ to NGOs); Bristol-Meyers Squibb (2006-09).
EXXONMOBIL FOUNDATION MEDTRONIC FOUNDATION 2012 giving to global health = $5,385,678
ELI LILLY AND COMPANY FOUNDATION Giving to global health increased from $4.4M in 2011 to $8M in 2012, due to the foundation’s commitment to battling drugresistant TB. “The Lilly Foundation is committed to improving the health of people around the world. We are increasingly focusing our giving and partnering with organizations best positioned to drive meaningful, replicable results. We are honored to have our work recognized by PSI.” – John C. Lechleiter, Ph.D., Chairman, President, & CEO
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“At Medtronic, we’re focusing our philanthropic efforts to address chronic diseases such as heart disease and diabetes, diseases that lead to staggering global health and economic burden. By strengthening health systems, especially by promoting frontline health care workers and encouraging patient empowerment, we are working to help people around the world get access to the care they need.” – Dr. Jacob Gayle, Vice President, Medtronic Philanthropy
Since 2000, ExxonMobil has invested more than $110M into malaria programs in developing countries. As a result, partners: ➜ have reached almost 66M people ➜ provided 13M bed nets and 1.7M treatment doses ➜ t rained 100,000+ health care workers and counselors
GE FOUNDATION The Developing Health Globally program builds health care capacity across national public systems in the developing world. Numbers since program launch in 2004: ➜ 14 countries in Africa, Latin America and Southeast Asia ➜ 204 hospitals and health centers ➜ 12M lives impacted to date ➜ $60M+ total program investment since launch
THE Numbers PEPSICO FOUNDATION PepsiCo Foundation grants focused on clean water, sanitation, food security and health are helping to create enabling environments in which women and girls in developing countries can advance.
ABBOTT FUND In 2001, Abbott, the Abbott Fund and the Government of Tanzania formed a 10-year public-private partnership to strengthen the country’s health care system and address critical areas of need. Results: ➜ 23 regional hospital labs modernized ➜ $95M invested ➜ 4M lab results provided to physicians
Bristol-Meyers Squibb Foundation 2012 giving to global health = $6,648,072 “The mission of the Bristol-Myers Squibb Foundation is to help reduce health disparities by strengthening communitybased health care worker capacity, integrating medical care and communitybased supportive services, and mobilizing communities in the fight against disease.” – Mission statement
Johnson & Johnson Family of Companies Contribution Fund
Powering through the recession: Despite a lull in 2009, on average, corporate donations to global health rose annually from 20062010. In 2010, 68% of U.S. corporations that reported a decrease in profits also increased their total giving. Source: Committee Encouraging Corporate Philanthropy (2011).
J&J works with partners on more than 700 programs in more than 50 countries. The company’s employees in every region volunteer their time, business skills and passion for making a difference to local organizations.
Behind THE Numbers Culture, Motivation, Objective
nternational corporate volunteerism is trending. Within the health industry, more and more pharmaceuticals are complementing their giving of funds and medicines with investing time and people to deliver high value impact in the communities they serve. Public-private partnerships among corporate foundations, governments, private foundations, nongovernmental organizations and United Nations agencies have proliferated in the past 5 -10 years. In the early 2000s, 13 pharmaceutical companies partnered with the U.S. government, the William J. Clinton Foundation and the Elizabeth Glazier Pediatric AIDS Foundation to support a pediatric HIV and AIDS treatment strategy in countries funded by the President’s Emergency Plan for AIDS Relief. n
57% of companies increased their cash contributions from 2009-2010 due to: • increased employee participation; • higher caps on the corporate matching limit; and • the addition of new programs.
Richard T. Clark Fellowship Merck launched the Richard T. Clark Fellowship program in July 2012. During that month, Merck appointed five employees to join the global health program and work with founding partner PSI for three-month assignments. Through the program, Merck is now planning to send 25 staff members to developing countries where their partners work. Putting their expertise into action, Merck fellows enhance the impact of global health initiatives by improving the quality and scale of the organization’s operations.
Source: Committee Encouraging Corporate Philanthropy (2011).
Global Health Fellows In 2013, Pfizer celebrated the 10th anniversary of its signature social investment program – the Global Health Fellows (GHF), one of the most comprehensive and successful international corporate volunteerism in the health sector. Since 2003, Pfizer, through the GHF, has paired colleagues in three to six month fellowships with NGOs to improve health services for people in greatest need. Leveraging their business expertise, Pfizer fellows optimize development work by improving supply chain management and scaling-up innovative health campaigns.
See works cited page (inside back cover) for complete source information.
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A Vision for Sustainable Living Unilever CEO Paul Polman talks with PSI President & CEO Karl Hofmann about the Unilever Sustainable Living Plan and the changes he expects to see in corporate philanthropy moving forward.
Karl Hofmann: I’m a big fan of Unilever’s Sustainable Living Plan and find it fascinating. What’s the overarching philosophy of the plan? And what are two lessons Unilever has learned since its launch? Paul Polman: When I came to Unilever four years ago, it was very clear to me that there was an important need for a deeper purpose for business. We wanted to put a business model out there that actually accelerates our growth; we want to be successful and sustainable while
sustainability and equitability. The philosophy behind it goes back to the basics, where business needs to think more about how it can give to society versus take from society. The crisis of 2008 brought business even more to the foreground. Now there is this enormous force of young and digitally savvy consumers aggregating themselves. There is an enormous pressure on planetary boundaries with the population increase in the East and South. Then you have a government process that, because of all these shifts, is becoming
we want to be successful and sustainable while increasing our positive impact on society.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> increasing our positive impact on society. I think the difference between our model and others is that we decided to take responsibility for the total value chain, covering all of our brands and all of our categories. Our plan also covers the triple bottom-line, as we look at our 20
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very difficult. So companies like ours and nongovernmental organizations like PSI are now the glue, and consumer expectations are high. Our learning was that we have to impact the total value chain. This is not corporate social responsibility anymore; this is taking
co-ownership to reverse some of these negative trends and contribute to issues of health and sanitation, of food security, of equitable growth. Partnership is a tremendously important piece that we learn more about each day. We are also tackling the challenge of taking our work to scale. There are tremendous things happening with PSI, the United Nations Children’s Fund and the Bill & Melinda Gates Foundation. But how can you scale it faster, while continuing to share the same values? People were skeptical when we launched our Sustainable Living Plan and our goal of doubling turnover. But I found that since we set that goal three years ago, we have moved faster and further than we have in the history of this company. It put people into a totally different mindset.
KH: I really admire your leadership and your vision on this. The total value chain, it’s a compelling story, and we’re only in the early phases of it. How have your shareholders reacted? PP: We have had to learn how to communicate the Sustainable Living Plan to our shareholders. We have also needed to change the framework in which we did business so that people did not
In November 2010, Unilever launched the Unilever Sustainable Living Plan. The plan outlines the company’s goal to expand business while reducing its environmental footprint and increasing its positive contribution to society.
Paul Polman visits the General Trade in Kenya to get a feel for Unilever's brands in the market.
is Vice-Chairman (and the next Chairman) of the World Business Council for Sustainable Development, a member of the International Business Council of the World Economic Forum and serves on the Board of the UN Global Compact. Last year, he was invited to serve on the high level panel looking at the post-2015 Millennium Development Goals and previously acted as co-chairman of the B20 group of companies reporting to the G20 on Food Security. In 2012 Paul received the Atlantic Council Award for Distinguished Business Leadership and the CK Prahalad Award for Global Sustainability Leadership.
receive incentives that were contrary to our objectives. We abolished quarterly reporting; we abolished guidance; we moved to a different compensation system for the long term. In the beginning, when you make these changes and your performance doesn’t have a good track record, people think you have something to hide, and your share price can be under pressure. But we have stuck with this and used every opportunity to communicate with our shareholders about our long-term strategy. We’ve also changed our shareholder base accordingly. Too many CEOs cater to current shareholders who have disparate points of view. We’ve found that you need to seek the shareholders that fit your model, and we have done that. Our shareholders are, to some extent, even pushing us. With the high volatility and input costs, they know that if we go up the supply chain and work with small rural farmers, we remove risks. By looking at social compliance, they see that we are less exposed to risks to market value because of big headlines in the newspaper. They see that we are thinking more strategically about our resources and cutting costs out of our system. Increasingly, we have shown them that the effects of a more engaged workforce means we can attract the best and brightest. And, last but not least, it has driven our innovation program, especially in areas where our consumers are resource-stressed, such as sanitation or the lack of water. Developing soap products, which make hand-washing easier, means we are saving lives and water while growing Unilever’s emerging markets. We have been blessed that our business results have been very good. We have actually accelerated our growth. We’ve added about $14 billion to our top line in the last three years, so that gives us credibility. If our business results had been under pressure, there would have been more skeptics.
KH: The Sustainable Living Plan calls for Unilever to work with more partners than before. How is this changing the corporate culture?
PP: When we launched this business model, one of my goals was to make this company more externally focused in the service of society. Internalizing these external challenges, we have put society right smack in the middle of our company. People were worried that these 50 targets would lead us to expose ourselves or be criticized in the media for missing a few. We said that we could only be successful if they believe in the plan and help us. Saying that little sentence disarmed a lot of skeptics because we invited everybody to join. We have found if we create the right coalitions – PSI is one good example – and everybody delivers value transparently around very clear objectives, we can achieve miracles. There are now more than 200 million people participating in Global Handwashing Day. Our company could not do that alone. To be part of a lot of these things, sometimes initiated by others, sometimes put together by all of us, allows us to achieve shared objectives. A good example is what we are doing together in Zimbabwe, Kenya and Vietnam around Lifebuoy – combining PSI’s and Unilever’s expertise to help communities. That’s very energizing. You need people with different skill sets who feel comfortable working together transparently.
KH: I think that’s right. You’re doing it, and on our side of the equation, we have to develop different skills, which we are trying to do enthusiastically. PP: It’s very important for organizations like PSI, Oxfam, UNICEF, and the World Food Programme, which we’ve chosen as our partners, to understand, more than ever, in today’s economy that business can help create jobs and growth. The very definition of sustainability is changing. There will continue to be a need to do charity and aid for the bottom of the pyramid as there will always be fragile nations and people that fall below any line. However, the role of business is increasingly better understood, and business increasingly understands that with this
cooperation they can go much deeper into, let’s call it, the “human chain.”
KH: Five or 10 years from now, do you think that corporations are still going to be talking in terms of corporate social responsibility and the sorts of activities that might have historically defined relationships between corporations and nonprofits? PP: I think it will be another 15-20 years before we see responsible capitalism more institutionalized. Business knows how to measure and optimize financial capital; however, we are not so knowledgeable on social or environmental capital. If we don’t start to measure that natural capital and internalize it into our business model, it will be very difficult to change, even on the financial side. There are efforts underway in terms of integrated reporting or natural capital declarations, but they will take 10-15 years to take shape and drastically change people’s behavior. Now, if we focus on about 100 companies, we can pick 25 of the world’s biggest and make them sustainable. If we focus on some of the largest countries, we can achieve the Millennium Development Goals. If we focus on a few big projects together like we’re now trying to do with Waterworks in India, we can certainly have an impact. What I advocate for now is starting with a few big projects, such as sanitation. How can we build 500,000 toilets? That’s our current approach; that’s how it has to be done. Then, bit by bit in a very practical way, we can move this world forward and make a positive impact.
KH: It’s an exciting time. Your company is doing fantastic things. We’re very, very proud to be associated with you personally and with everything that Unilever is doing. n
Karl Hofmann visits PSI programs in Burundi.
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Assessing private sector An appraisal of major multinationals in two important private sector industries – pharma and oil – reveals some interesting trends in social investment and global health commitments. By Christine Dugay and Pete Troilo, Devex
here is considerable excitement regarding the role that corporations and their foundations are playing in global health. PSI and other prominent global health organizations are expecting this trend to continue and are counting on the private sector, particularly large multinational companies, to implement innovative and scalable health programs, establish new partnerships, and provide much-needed funding to catalyze sustainable change. In order for organizations and individuals to engage with these companies, the global development community still requires a better understanding of exactly how multinationals are contributing to global health. The short and easy answer is that, in recent years, corporations have supported a wide range of initiatives across the global health value chain, from research and development to manufacturing and supply, and to direct delivery of products and services in various areas of the developing world. A more detailed answer can be uncovered through an analysis of two major global industries, which are perhaps more involved in social development than any others: pharmaceuticals and oil. Here, Devex assesses the 2011 financial commitments, strategies and programs of three leading pharmaceutical companies – Pfizer, Merck and GlaxoSmithKline PLC – and three major oil companies – Exxon Mobil Corp., Chevron and Royal Dutch Shell PLC – all of which are positioning themselves as private sector philanthropic leaders through social investment and global health spending.
Pharma: Beyond drug giveaways
Since corporate giving is typically aligned with corporate objectives, it should not be surprising that the pharmaceutical industry is a top global health funder from the private sector. According to the Committee Encouraging Corporate Philanthropy – an international forum of 22
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business leaders focused on raising the level and quality of corporate philanthropy – median total giving for global drug companies stood at $680 million in 2011. As a means of comparison, Japan – consistently one of the top bilateral aid donors in the world – reported total health giving of a little more than $500 million in the same year. Figures only tell part of the story about just how radically big pharma is changing global health. In a recent Devex Impact feature article on big pharma and global health, Devex described big pharma’s departure from drug giveaways to a more intricate model that marries improved health outcomes for the poorest with their own business survival. Through partnerships with traditional aid donors and global health organizations, big pharma is gradually learning how to address the risks associated with researching, creating, selling and administering cheap medicines in the developing world. In 2011, Pfizer, the world’s largest pharmaceutical corporation, placed first in the Chronicle of Philanthropy’s ranking of the most generous companies. Cash donations dropped almost 20 percent from 2010 levels to $56.4 million in 2011. Despite the decline in cash contributions, the $3 billion fair market value of Pfizer’s drug giveaways was an all-time high and more than twice as much the company’s closest competition. That same year, Pfizer was recognized as Best International Ambassador by the Business Civic Leadership Center for its Global Health Partnerships program, which strengthened health care systems and infrastructure to support cancer and tobacco control efforts in 46 countries. A review of Pfizer’s health giving portfolio reveals the company’s diverse investments in the global health industry. In addition to multiple research and development collaborations, Pfizer has single-drug donation programs and sustainable philanthropic initiatives. In its 2012 year-end report, the Access to Medicine Foundation rates Pfizer’s long-standing donations of Diflucan for HIV and AIDS, and Zithromax for trachoma as above average compared with its
peers. Pfizer also improved Zithromax for use in the developing world by increasing its shelf life and pill count per bottle to make its use easier and cheaper in the field. The company works with Direct Relief International and the International Trachoma Initiative to determine future demand forecasts and address customer needs. From 2013 to 2016, Pfizer will be collaborating with the United Kingdom’s Department for International Development, the U.S. Agency for International Development, the United Nations Population Fund, PATH and the Bill & Melinda Gates Foundation in a project involving the distribution of affordable injectable contraceptives to women in sub-Saharan Africa and South Asia. Pfizer’s contribution involves up to 12 million doses of contraceptives to be distributed to 3 million women. “We try never to forget that medicine is for the people. It is not for the profits … The better we have remembered that, the larger they have been,” George Merck, the founder’s son, said in a speech at the Medical College of Virginia in 1950. Heeding his words and putting them to practice, Merck overhauled its corporate social responsibility policy in the mid-1990s to marry its philanthropic priorities with its business capabilities. In 2011, Merck placed third in the Chronicle of Philanthropy’s ranking of the most charitable corporations, with $1.27 billion in giving. Cash donations remain unchanged from 2010 levels, at $72.6 million, while the fair market value price of its in-kind giving amounted to $1.2 billion that year. Dropping down two places from 2010, Merck placed fourth in the 2012 Access to Medicine Index, which assesses pharmaceutical company’s efforts to improve global access to medicines. Merck’s best-known global health initiative is the Mectizan Donation Program (MDP). Launched in 1987, MDP helped to eradicate river blindness in endemic countries. To date, the program reaches approximately 80 million people in 30 African and six Latin American countries, as well as Yemen in the Middle East. In addition to drug donations, Merck assists
support of global health Devex_design_04c.pdf
PRIVATE SECTOR SUPPORT OF GLOBAL HEALTH Total giving - US $
Health giving Other social investment
$ 3,056,400,000 99%
$ 278,400,000 9%
$ 209,000,000 8%
Royal Dutch Shell PLC
$ 125,000,000 15%
Source:Devex DevexAnalysis Analysisof of2011 PublicPublic Corporate GivingGiving Data Data Design: Design: Olivier Marie Source: Corporate Olivier Marie
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less-developed countries strengthen their health care infrastructure. The company prides itself on involving governments in project design and implementation, claiming that fostering country ownership ensures project coherence and sustainability. Under the African Comprehensive HIV/AIDS Partnerships, Merck works with the Gates Foundation and Botswana’s government to ensure the country’s health sector can comprehensively respond to the challenges posed by HIV and AIDS. From 2010 to 2014, Merck committed an additional $30 million to support Phase II (prevention) of the partnership, which includes public education components. Although Europe’s leading pharmaceutical corporation’s giving seems modest in scale – 204 million pounds ($327 million) in 2011, down from 222 million pounds the preceding year – GSK’s efforts to integrate social investment into its business strategy are widely applauded by key segments of the global health community. Unlike its peers, whose giving portfolio is solely dedicated to health initiatives, GSK also provides funding for arts and culture, education and environment projects. GSK ranked first in the 2012 biannual Access to Medicine Index, a position it has held since 2008. Typical of pharmaceuticals, GSK engages in drug donation programs – the company is the leading vaccine supplier to UNICEF. Aside from drug giveaways, GSK is known for its investments in health infrastructure-related projects, which help countries improve their health care capabilities. In 2009, to simplify its business approach to philanthropy, GSK combined operations for its 50 least developed countries into its Developing Countries unit. Taking a unique approach to giving back, GSK committed to reinvesting 20 percent of its profits from least developed countries (LDCs) in health care infrastructure. The company’s 2010 profits generated about $5.2 million (3.8 million pounds) for community investments in LDCs in 2011, which include training 10,000 Ethiopian health workers and implementing 60 Child and Family Wellness clinics in Rwanda. Expanding this initiative, this past year GSK announced plans to implement projects in each developing country where the company generates profits.
Oil: Carving a global health niche
Oil and gas companies have found that social investment is a necessary cost of doing business, 24
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particularly in developing countries. Through strategic global development initiatives as well as local community investments, multinational oil companies are becoming increasingly engaged with the more traditional international development community. While the health spending of such companies is relatively modest compared with both their overall revenues and social investment spending, they are learning how to scale specific health programs for maximum and observable impact, and to partner with diverse development stakeholders, including host governments, embassies, international donors, like-minded companies, international non-government organizations and local civil society. ExxonMobil, the world’s largest publicly traded oil firm, is committed to developing the communities where it operates. In 2011, ExxonMobil’s worldwide community investments stood at $278.4 million, of which $232.7 million was corporate cash giving, up 17.1 percent from 2010. That year, an estimated $25 million was allocated as programmable funding for health initiatives. While the company’s social investments are tailored to community-specific needs, its global giving activities focus on improving women’s economic participation and math and science education, and on combating malaria in developing countries, particularly in Africa. The ExxonMobil Malaria Initiative is the corporation’s largest and most focused community health program. Since 2000, ExxonMobil’s malaria funding of more than $110 million has reached nearly 66 million people worldwide; provided more than 13 million bed nets, 1.7 million treatment doses and 878,000 rapid diagnostic kits; and helped to fund three pediatric malarial drugs. Together with its partners – which include Malaria No More, PSI, Africare, the U.N. Foundation, USAID, UNICEF and the Medicines for Malaria Venture – ExxonMobil remains committed to fighting the spread of malaria. In 2012, to mark World Malaria Day, the ExxonMobil Foundation pledged more than $10 million in grant funding for life-saving programs and scalable methods for the prevention and treatment of malaria. “Companies are becoming smarter about linking their core business to development,” says Tam Nguyen, manager for corporate responsibility at Chevron. One of the world’s leading energy companies, Chevron spent $209 million on social investment in 2011, up from $197 million in 2010. The company’s
core social investment areas are education, economic development and health. In 2011, Chevron allocated roughly $16 million for health programming. The company aims to ensure quality health care for women and children, and to help prevent the spread of HIV and AIDS. To expand the reach of its HIV and AIDS programs, Chevron has invested $55 million in the Global Fund to Fight AIDS, Tuberculosis and Malaria since 2008 – the largest contribution from a single corporation to the organization. The additional financing of $25 million between 2011 and 2013 will support the Global Fund’s HIV/AIDS grants in Angola, South Africa, Thailand and Vietnam. With the elimination of mother-to-child transmission of HIV in Nigeria a top priority, Chevron partnered with Pact, mothers2mothers and the Business Leadership Council in July 2012. Through these partnerships, Chevron aims to strengthen Nigeria’s Prevention of Motherto-Child Transmission delivery model, facilitate the establishment of a Mentor Mother program, and support local organizations in their efforts to increase HIV awareness, promote voluntary counseling and testing, and reduce HIV and AIDS-related discrimination. Regarded as one of the world’s top oil producers, Royal Dutch Shell is garnering recognition as a change driver in the global health community. Largely focused on economic development, improved access to energy and road safety, Shell spent $125 million in social giving in 2011, up from $121 million in 2010. While health is not a stated priority sector, Shell spent an estimated $19 million in 2011 on health initiatives, with the bulk of that amount invested in Nigeria. In 2010, Shell Petroleum Development Company, or SPDC, and Family Health International agreed to extend the Niger Delta AIDS Response Programme, or NiDAR Plus, to expand comprehensive HIV and AIDS health care services in the region. To increase access to health care services, SPDC together with the Nigerian government and nongovernmental organizations, implemented the Health-in-Motion program. Launched in 2007, this mobile outreach initiative brought much-needed free health care services to the remote communities of the Niger Delta. Benefiting more than 328,000 people, the program earned SPDC the Best Company in Most Innovative CSR award at the 2011 Social Enterprise and Reports Awards. SPDC was also commended by the Business Action on Health Awards for the Community Investment: Special Focus on HIV/AIDS, Tuberculosis or Malaria in 2012. n
How Global Health Money Should be Spent By Walter T. Gwenigale minister, Ministry of Health and Social Welfare, government of the Republic of Liberia
he oldest republic in Africa, Liberia, is a small West African country with fewer than 4 million people. We are a poor country, but rich in natural and human resources. After emerging from a long war that tore apart the fabric of our society, ruined our institutions and destroyed our infrastructure, we are rebuilding
and have a vision of a healthy population with social protection for all our citizens. Under the strong leadership of President Ellen Johnson Sirleaf, my job as Minister of Health and Social Welfare has been to coordinate the rebuilding of the health sector, to improve the health and social welfare status of all Liberians, and to set the health care system on a course to a sustainable future. It is said that health is wealth, and from my experience, this must be true because providing health care is definitely very expensive. I have had to spend a great deal of my time as a hospital director, a county health officer and as a minister trying to raise the necessary funds to
As the economy grew, domestic revenues increased and the amount of government money spent on health has steadily risen, even though as a percentage of the national budget, it has remained stable at about 8 percent. However, the cost of health care also continues to rise as we work to expand access, increase the quality and the variety of services we provide according to the changing health needs of the population, and improve the oversight of a proliferating private health care market. Moreover, our health needs are only one of many on a long list of national development priorities that the
investment made to strengthen public sector governance and the ability of government to coordinate and manage health financing will be money well spent.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> ensure essential health services are available. If there is one thing I have learned along the way, it is that there is no such thing as free health care — someone always has to pay for it. Since the end of the war in Liberia, donors have funded the majority (60 percent) of health service delivery costs, but their combined share is decreasing. The government has gradually become the largest single source (40 percent) of funding for health, as was the case before the war.
government must address, including improving our education system, our road network, our access to safe water and good sanitation, and our justice system and the rule of law. Therefore, with the high cost of improving the health care system and competing demands on limited resources, future health financing in Liberia will continue to rely on vital donor support until domestic revenues are sufficient to meet our own health care needs, and the transition must be gradual to avoid disrupting
services. But we want the support only if it will strengthen, not weaken, our national systems and build institutional capacity while helping us to help ourselves, as we have mutually agreed to do in Paris, Accra, Busan and elsewhere. In addition to donor support, we must also leverage partnerships with the private sector that bring real added value, but be realistic about what role the private sector can play. In Liberia, creating jobs, protecting the environment and paying their fair share of taxes are the most significant ways in which the private sector will impact the population’s health. To enable this, government’s role is to establish a regulatory framework and foster an economic environment in which the private sector can thrive. After all, economic development leads to improved living standards, and only by reducing poverty will we achieve sustainable gains in human health. Ultimately, a balanced approach to health financing is required whereby government, bilateral aid and the private sector contribute according to the comparative advantage that each offers and the needs of a particular context. To achieve this balance, investment made to strengthen public sector governance and the ability of government to coordinate and manage health financing will be money well spent. After all, financing health is fundamentally about establishing and executing sound public policy, and this is first and foremost the mandate of government. n psi.org | impact
Innovative finance and its promise for global health
ew global health institutions focus as much on innovative finance as UNITAID. The global health initiative, established in 2006 and hosted by the World Health Organization in Geneva, uses its understanding of how to address market shortcomings to improve access to quality-assured treatment and diagnostics for HIV and AIDS, tuberculosis and malaria patients in low-income countries. What can the global health community learn from UNITAID’s example? Devex Editor Rolf
Rosenkranz asks Executive Director Denis Broun.
became UNITAID Executive Director on September 12, 2011. He has worked in public health and health economics for the past 25 years and has established strong links with a large network of partners in government, civil society, private sector, foundations and international organizations. His main area of work has been in pharmaceutical policies, notably as senior specialist for the pharmaceutical sector at the World Bank, European Director of Management Sciences for Health and a former Board Member of a private Indian generic company and an American Foundation working on access to medicines in Africa.
Rolf Rosenkranz: Why will traditional donor funds alone not be able to tackle the big global health challenges of our time? Denis Broun: Countries’ capacity to address their own needs has increased remarkably over the past 10 years thanks to economic growth. Look at the way Nigeria is handling polio eradication these days: It’s completely different from how it was done a decade ago. So it could be argued that traditional types of donations are less needed. But we know that international mechanisms such the Global Fund or UNITAID have a significant impact on global public health issues, and provide sound additional funding options to bilateral routes. There is still very much a need for funding from Western countries, but as we know, the Office of Development Assistance remains under threat from economic issues. There are some remarkable exceptions, like the U.K., but on the whole, external aid budgets are decreasing and there is a need to find other types of resources. We must continue to be ever more creative in how we both source funding and make sure those funds are spent to best effect.
What innovative solutions for global health financing do you find the most promising?
DB: Innovative financing has been successfully applied to global health for some time now. In the 26
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1990s, for instance, initiatives for the highly indebted African countries turned that debt into money for education and health. And more recently, UNITAID has had great success with the air ticket levy, where a minute contribution is added to air ticket purchases. In January, France announced that it has now raised 1 billion euros (estimated $1.3 billion) since it set up its air ticket levy initiative in 2006, the vast majority for global public health, and, importantly, with the French airline and tourist industry reporting absolutely no negative impact on business. A proven win-win for all. The idea of financial transaction tax is also promising, as it could generate large amounts for development. These are relatively simple and efficient to administer and a promising funding source. We also see a push for universal health coverage. Funds generated using insurance mechanisms in the countries themselves is emerging as probably the most viable financing solution over the long term for such health coverage schemes.
RR: How do you see the global health community’s role changing in all of this? DB: I think it has a much bigger role than before. The architecture of the health community is no longer top-down coming from the WHO. Civil society, foundations, the private sector and others are playing an increasingly crucial role. We’re seeing a much more diverse health community with highly trained and
Dr. Denis Broun
competent people. We must ensure that we get the best possible coordination of all these people on the ground. For this coordination, nothing can replace the national government. The good news is that their level of commitment and involvement has increased a lot. We’re seeing ministers of finance and presidents now talking about health, ready to act. And if you look at results, you have to recognize that what has been achieved in the past 20 years has been more than what has been achieved in the fight against diseases since the beginning of humanity.
RR: What are the barriers to expanding innovative financing for global health, for getting everyone to the table? DB: When you get money coming through new means – through levies on financial transactions, for instance – that is innovative financing. With the introduction of such new initiatives, you have a whole set of economic operators who need to buy into the concept. Convincing them takes a lot of negotiation and time, but becomes easier with increasing evidence that such initiatives are usually win-win decisions.
RR: Co-financing has become increasingly popular in development cooperation. How do you see this trend change global health? DB: It’s already there, to a large extent. If you have more and more operators, you are going to see more and more co-financing of projects. Look at the big initiatives on maternal mortality, for instance, or the Affordable Medicines Facility, which is managed by the Global Fund: These are co-financed by companies and by foundations. When you have a good idea, then often you have other people who have thought about it and are ready to help you put it in place. Co-financing is a way to do it.
RR: South-South cooperation has been increasing. What lessons can we learn from it? DB: For UNITAID, this has two dimensions. First, there’s the financing, because 85 percent of our money goes to projects to benefit the poorest, and it’s a matter of financial solidarity; we have several African countries, for instance, contributing to UNITAID because they know when we finance an initiative, it is going to reach the poor. We also want to make sure that manufacturers remain active in the south and are supported by innovators. One of the best pharmaceutical plants in Africa is in Uganda, and is the result of
an Indian investment. It’s a typical South-South technology transfer. We see technology transfer and support as a big priority going forward. It’s not just about looking at what’s available in rich countries and how that can trickle down and be adapted for poor countries. We are going to see more and more initiatives and innovations coming from the South and for the people of the South. We’re doing that right now, for instance, by supporting point-of-care diagnostics for HIV, which means being able to monitor disease for patients at an extremely low cost. This is a completely innovative technology and we know that once it has been used in countries across Africa, it makes economic sense for this to be also used in rich countries.
RR: Often, it’s not just about innovative financing – obstacles of entering markets, for instance, can also affect the quality and availability of health care and, ultimately, curtail economic and job growth. DB: What we have to do is not only get more money, but continue to find the best possible ways of spending it. The mechanisms have to be there, the systems, the supply chain management, the capacity, the regulatory framework, the training – all these things work together. We have to ensure that all aspects of markets and operations work as smoothly as possible. That’s
in order to register, you’ll need to repeat steps you’ve already completed elsewhere. We have to take care of this at the same time as we’re looking for funding.
RR: Do the institutions and structures to work together on these issues exist, or is there a need for a new global health architecture? DB: When we speak of architecture, we suppose that there’s an architect. But most of the time, there is no real preconceived design; people see what is going on and find ways to make it work as best as possible. What is most important is that those who are engaged aren’t trying to do things that they are unable to do. And for that, it’s essential that there’s coherence at the country level and that the ministries and local authorities are in charge. And we have to understand that in some countries, government may not have the capacity, and that’s where we can help, too. Is there a need for new types of organizations? I don’t think so. We have the people and organizations, now we may need to expand their scope a bit or refocus some of the things they do.
RR: How do you want global health and the idea of innovative finance to be integrated in the post-2015 global development agenda?
We believe in the innovation but also the capacity of the South, as well as in competition and the South’s drive for progress.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> why everybody’s work must be coordinated, including that of government. Otherwise, efforts are going to fail. Some things change faster than others. Often, you may have solved access-to-care challenges, but then you have patent issues, or you have to negotiate licenses, or you have problems with the distribution system. We are faced with problems of intellectual property, for instance; this is why we have set up what is called the Medicines Patent Pool to help arrange voluntary licenses for HIV drugs, as patents can block access. You may have problems registering in the right places; a country may say that
DB: Discussions are ongoing, but I think it would be good to have new global development goals, because we’ve seen how the Millennium Development Goals have brought people together to reach common targets. What’s important is that we don’t wake up on January 1, 2016, and think that we have to change and start from scratch. We are not going to stop funding the treatment of people with HIV; it’s impossible! You’re not going to say that malaria is over. So, however the goals will be worded, it is absolutely clear that we have to continue the things we’re doing well, so that the results continue to come in. n psi.org | impact
mpact investing has captured the world's attention. In the last two years, many of the large development agencies and financial institutions, such as J.P. Morgan and Credit
Suisse, have become very involved in impact investing, calling for proposals or directly investing in these funds. These types of investments are unique in that they are made into companies, organizations and
THE Numbers How large is the potential opportunity for investment in this market? In 2010, J.P. Morgan, the Rockefeller Foundation and the Global Impact Investing Network released findings on market opportunity and profit potential in impact investing. The findings showed the size of the market opportunity in emerging markets across five sectors housing, rural water delivery, maternal health, primary education and financial services - for the portion of the global population earning less than $3,000 annually could be up to $1 trillion, with a $667 billion profit potential over a decade.
funds with the goal of creating measurable social and environmental impact in addition
Size of the market opportunity
$400B - $1T
10-year profit potential from these opportunities alone
$183B - $667B
to a financial return. They can be made in emerging and developed markets, and target a range of returns from below market to market rate, depending on the situation. The term "impact investing" was coined in 2007 at a summit convened by the Rockefeller Foundation; however, the practice of investing in businesses that help solve social challenges has existed for decades and it is only
Source: “Impact Investments: An emerging Asset Class.” J.P. Morgan Chase & Co., Rockefeller Foundation and Global Impact Investing Network (2010).
expected to grow.
Behind THE Numbers Expert Insight:
“We’ve invested in an ambulance service company in India called Ziqitza Health Care. When we invested in them in 2007, they had about nine ambulances, and they were only operating in the city of Mumbai. It was a pay-per-use model, meaning that if you call them up for emergency services and they took you to a hospital, you paid for the hospital ride. The cost of that ride depended upon what hospital you went to. So if you went to a fancy hospital, you paid a higher rate than if you went to a government hospital. It was sort of a cross-subsidy model. Today, they are operating over 850 ambulances across India.” —Shuaib Siddiqui, Portfolio Manager, Acumen Fund
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FOCUS ON Global Health Global health is seen as one of the top issues for investors, particularly health infrastructure, malaria, HIV and AIDS, maternal health, and nutrition. Technology and product development to improve health are also popular. Impact investing opens up many new and exciting opportunities for addressing global health issues through investment capital and the support for sustainability.
Behind THE Numbers Expert Insight:
“In the U.S., you have examples of people who have created wealth at a very young age through entrepreneurial business ventures. Part of what has driven an increased interest in impact investing is a desire among such people to apply the learning and experience behind their business success to their philanthropic life. Around the world, there are also a growing number of people interested in aligning their values across their philanthropic and financial investment portfolios. The desire for such alignment is another driver.” —Katherina Rosqueta, Founding Executive Director, University of Pennsylvania Center for High Impact Investing
Types of Investors and Participants There are many permutations of the impact investing practice, determined by the organizations leading the investing and the return sought for the investment. Participants range from diversified financial institutions, to financial advisors, nonprofits, foundations and impact investment conveners. The chart below outlines this range of stakeholders. Asset Owners
• High net-worth individuals/families • Corporations • Governments • Employees • Retail investors • Foundations
• Investment advisors • Fund managers • Family offices • Foundations • Banks • Corporations • Venture funds • Impact investment funds/ intermediaries • Pension funds • Sovereign wealth funds • Development finance institutions • Government investment programs
• Corporations • Small and growing businesses • Social enterprises • Cooperatives • Microfinance institutions • Community development finance institutions
• Networks • Standards-setting bodies • Consulting firms • NGOs • Universities • Capacity development providers • Government programs
Challenges Impact investing is on the upswing, but there will be growing pains as it becomes a more mainstream source of development funding. Despite the fact that more money is flooding into impact investing than ever before, some experts suggest that it remains challenging for early-stage entrepreneurs focused on low-income markets like India and sub-Saharan Africa to raise capital and start new companies. In an article published in the Standford Social Innovation Review this year, authors write that fewer funds, including those that promote tackling poverty, readily pursue the more challenging, long-term investments, which are potentially less lucrative and target a smaller segment of the population. Secondly, any investment involves an incubation period, so the world might not see results until 5-10 years down the road. In the meantime, however, investors should be able to adopt a standard tracking system to measure their impact. It wasn’t until 2009 that a standardized system of tracking and measuring was developed, which was criticized by skeptics. Today, the Impact Reporting and Investment Standards initiative, a major project of the Global Impact Investing Network, manages this taxonomy and provides a reporting framework that is applicable across a range of sectors and geographies.
“The next few years are critical. [There needs to be] rigorous data and returns that live up to what is promised.” —Tahira Dosani, Director of Global Engagement and Strategic Projects, LeapFrog Investments
Impact Investing Players with Global Health Focus
➜ Acumen Fund is a nonprofit that uses philanthropic capital to make disciplined investments – loans or equity, not grants – that yield both financial and social returns. Acumen Fund’s health portfolio of 16 companies focuses on reducing costs and increasing access to previously unavailable products and services for the world’s poor. Any profits made through investments are “invested” back into the fund’s programs. ➜ Leapfrog Investments is a private equity investor that provides capital and expertise to high-growth companies in Africa and Asia, which provide low-income and vulnerable populations with critical financial services such as insurance. As a “profit-with-purpose” investor, LeapFrog targets top-tier financial returns alongside sustainable social impact. The fund aims to reach more than 25 million low-income consumers with financial safety nets and springboards to help them escape poverty. For example, LeapFrog supports AllLife, the only South African insurer of people living with HIV and AIDS.
➜ Center for High Impact Philanthropy at the University of Pennsylvania provides evidence-based information to impact and social investors to help them make informed decisions about investments and returns they can expect. The center offers a series of online guides and reports on how to achieve social impact (a number of which focus on global health). Through its collaboration with the Wharton School of Business, it also offers educational programs and other decision-making tools on high-impact philanthropy and impact investing. ➜ New Frontiers in Philanthropy Program, Center for Civil Society Studies at Johns Hopkins University is another program that seeks to bring together players in the impact investment field with a focus on identifying and addressing the policy issues that affect impact investing globally.
The Global Impact Investing Network supported on this section.
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A Century of Health Innovation By Judith Rodin, President, The Rockefeller Foundation
n May 1913, the Rockefeller Foundation trustees met for the first time to discuss the priorities of the young philanthropy, established under New York State charter with the mission to “promote the well-being” of humanity. A long-time advisor to founder John D. Rockefeller, Sr., Frederick Gates made the case that the foundation should
focus its work on disease, which he called the “supreme ill of human life.” While the trustees couldn’t have known it then, this meeting would put into motion a century of health innovations, from the creation of the field of public health to the development of a vaccine for yellow fever to the establishment of infectious disease surveillance networks at the end of the 20th century. Today, many other challenges have emerged that contribute to and reinforce the threats to well-being. From economic inequalities to climate change, these issues are much more complex and interconnected than what the foundation faced in 1913, requiring systemic solutions from across sectors to bring about lasting change. Health challenges themselves have dramatically evolved as well. For one, as lifestyles have changed, so have the causes and nature of diseases themselves. The changing demographics of our planet – our aging, increasingly urban populations – demand different interventions and more sophisticated solutions to build and maintain healthy societies. As we’ve seen with the SARS outbreak and the spread of H1N1 over the last decade, viruses can move as quickly as a high-speed train or a 747. To address the interrelated challenges of our modern world, the Rockefeller Foundation today focuses on global health as one component of our work to meet the dual goals of achieving more equitable growth and building greater resilience against the stresses and shocks of our modern world. In addition to advancing health, we work to transform cities, revalue ecosystems and secure livelihoods, as our main focus areas. Our health work centers on transforming health systems with the goal of helping nations achieve universal health coverage (UHC), to relieve the disproportionate burden that outof-pocket medical care puts on the poor and vulnerable. 30
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We work towards UHC from both the technical and policy perspectives. On the technical side, we support the Joint Learning Network for UHC, a network of policy makers and practitioners from 10 countries in Asia, Latin America, and sub-Saharan Africa to share learning and identify innovative solutions to advance UHC at the country level. In many of these countries, we pioneer innovative pilots aimed at reducing costs and expanding coverage. For example, through our pilot program in Chakaria, located in southeastern Bangladesh, we learned that local residents distrusted public hospitals so much that they were choosing to pay out of pocket for private care. To address this issue, we developed a prepaid health care package at a cost of about $15 annually per household, which covers medical consultations, hospitalizations, vaccinations and maternal health. Through grassroots marketing efforts, including leaflets and street fairs, enrollment in the package increased tenfold in the first half of 2012. We’re now using this wealth of data to refine the program and extract lessons for other parts of the country. At the policy level, we have worked to build the political will and enabling environments for UHC as a centerpiece of the global health agenda – and with real success. Last December, the United Nations General Assembly passed a resolution, sponsored by more than 90 countries, positioning UHC as the unifying health goal for the post-2015 agenda for sustainable development. But we know that the problems we work to address today will be replaced with new issues and challenges 100 years from now. That’s why in January, nearly a century after that first Board meeting, we brought together leaders in health and innovation experts from around the world to Beijing for a Rockefeller Foundation Centennial
is president of the Rockefeller Foundation. She was previously president of the University of Pennsylvania. Since joining the foundation in 2005, she has re-calibrated its focus to meet the challenges of the 21st century. Today the foundation supports and shapes innovations to strengthen resilience to risks and ensure more equitable growth worldwide.
Global Health Summit to help us dream the future of health for the next century. We heard truly exciting and promising ideas, from more participatory, democratic learning opportunities through massive open online courses, to an emerging field of epideminomics, combining the fields of epidemiology and economics. There was also a good deal of talk about the importance of not just global health, but planetary health – and a clear recognition that both are inextricably linked. The Rockefeller Foundation is taking a closer look at ways we can fold these insights into our future work and grantmaking strategies. But we also recognize that philanthropy cannot on its own solve the pressing health challenges that we face – rather, we must work to build the partnerships across all sectors to advance smart business practices, help government create equitable, pro-health policies, open new pathways to innovation, and attract new capital that will ensure progress can be sustained. For philanthropy’s part, we must continue to take the risks other sectors cannot, engage new actors from all sectors and regions, and provide mechanisms for constant, mutual learning to inform our progress. From public health to e-Health, it’s been an incredible journey, alongside extraordinary partners. We feel privileged to be able to do the work we do at this dynamic moment in our world. We may not know what the future holds, but with history as our guide, we are prepared for the century ahead. n
policy matters European Contributions to Global Health:
Down, But Not Out
lthough overall donor government spending on global health between 2005 and 2009 increased, a closer look at European funding from 2007 onward has shown different results. According to Action for Global Health, few of the European members of the Organisation for Economic Co-operation and Development/Development Assistance Committee have achieved their benchmark commitments of giving 0.7 percent gross national income to official development assistance and the 0.1 percent GNI to global health, recommended by the World Health Organization Commission on Macroeconomics and Health in 2001. AfGH is one of the organizations that tracks European donor funding for global health more closely. It has collected evidence from developing countries on the positive effects of investment in global health as well as the donor funding gaps which leave populations without access to adequate health care. Since 2007, health as a proportion of all ODA has declined among most European donors. The persistently gloomy economic climate in Europe has resulted in aid commitments that have been put on hold, or completely reversed (particularly for Italy and Spain). The Netherlands and the U.K. are two exceptions, according to AfGH. Total net ODA by all 27 European Union member states was $73.6 billion in 2011, representing 0.42 percent of their combined GNI, down from 0.44 percent in 2010 and far from the 0.7 percent commitment. The 0.1 percent of GNI contribution to global health is also far from being realized by the majority of the European DAC members (only the U.K. and the Netherlands come close to this target). Let’s take a look at some of Europe’s individual powerhouses from 2007 – 2010. In France, health as a proportion of all ODA declined from 17 percent to 12 percent. There was a dip in Germany too, from 10 percent to 9 percent. In the EU institutions it also fell from 8.2 percent to 7.2 percent in the same time period. In the U.K., the proportion was 19 percent of British ODA in 2007 and, while the proportion has declined to 17 percent in 2010, the U.K. continues to rank among the biggest contributors to global health and is making impressive progress towards the 0.1 percent of GNI target for ODA for health (AfGH). The Netherlands achieved this target in 2009 and while its contribution to aid for health dropped in 2010, its percentage is far above average in the EU. Country programmable aid – an important subset of ODA that relates to programs and projects and excludes non-programmable items such as humanitarian aid – debt relief and costs incurred in donor countries, was expected to increase by about 6 percent in 2012 (OECD Survey, 2011). This increase can be attributed largely to the expected increases in outflows of soft loans from multilateral agencies that had benefited from fund replenishments from 2009 – 2011. However, from 2013–2015, CPA is expected to stagnate, reflecting the delayed impact of the global
the U.K. continues to rank among the biggest contributors to global health…
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> economic crisis on many donor country budgets. Based on donors’ current projections, CPA to countries in Latin America will continue to fall, while South and Central Asia may exhibit slight increases. For Africa, the OECD Survey projects few changes in CPA, though recent events in Sahel and North African countries may result in some reprogramming of donor efforts. For countries in fragile situations (46 countries in 2011), the survey projects little change in total CPA, with the largest increases expected in the Democratic Republic of Congo and Kenya, and the largest falls expected in Haiti and Afghanistan. Despite the decreased spending on health by European donors as a percentage of ODA over the past couple of years, it is not expected to decrease much further over the next three years. European donors will be under pressure to invest the available money prudently: Germany and France will favor bilateral funding mechanisms, while Sweden and the U.K. support multilateral funding. We can expect Germany and the Netherlands to seek alignment with economic interests and work directly with the private sector, and Denmark and the EU will channel more resources toward budget support (with Finland, Norway and U.K. exploring ways to ensure broader support for health systems strengthening). n
Michael Chommie Michael Chommie serves as director of the Strategic Partnerships Unit and PSI’s Europe office. He meets regularly with counterparts across Europe to ensure they are informed of PSI’s health programs around the globe. He divides his time between Geneva and Amsterdam. Odette Salden, Associate Program Manager at PSI/Europe, contributed to this article.
psi.org | impact
policy matters Global Health Priorities: Cautious Optimism during Transition
able people in the world and maintains current assistance levels. Despite these uncertain times, new and continuing efforts on global health provide reasons to be optimistic about the year ahead. At the end of 2012, Secretary of State Hillary Clinton unveiled a blueprint for achieving an AIDS-free generation. This bold agenda emphasizes U.S. leadership in tackling HIV and AIDS and builds on global successes to set a course for its continued response. As we begin 2013, the U.S. will need to act on these recommendations to make concrete advancements in global health this year and beyond. The U.S. – alongside the U.K. and other donor governments – has also played a key role in ensuring that the tax dollars it sends overseas are reaching the people who most need it. As a signatory to the International Aid Transparency Initiative, the U.S., U.K. and other donor
Launched at the Third High Level Forum in Accra in 2008, the International Aid Transparency Initiative is a voluntary, multi-stakeholder initiative that includes donors, partner countries and civil society organizations and aims to ensure foreign aid spending information is easier to access, use and understand. By publishing comprehensive data in a common format and in a timely manner, donor governments, recipient governments and civil society organizations can better work together to address the universe of need in countries and increase the effectiveness of foreign assistance.
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Sally Cowal Sally Grooms Cowal is the Senior Vice President and Chief Liaison Officer at PSI, overseeing the New Business Development, Advocacy, and Corporate Marketing and Communications Departments. Elizabeth Petoskey, Advocacy consultant, and Regina Moore, Associate Manager for Advocacy and Communications, contributed to this article.
n the first months of the 113th Congress and President Obama's second term, the fate of U.S. foreign assistance funding remains uncertain. After narrowly avoiding the so-called fiscal cliff in early January, Congress and the Administration failed to avert the $85 billion in across-the-board spending cuts known as sequestration before March 1. These cuts along with Congressional budget decisions on fiscal year 2014 and the final half of fiscal year 2013 – which at print were unresolved – will affect foreign assistance funding levels and directly impact the work that implementing organizations like PSI do all over the world. Currently, only 1 percent of the entire federal budget goes to foreign aid – and only a fraction of that goes to global health. It is critical that Congress considers how drastically this aid has improved the health of the most vulner-
governments have shown a real commitment to effective aid. In December of 2012, USAID and the Department of State announced the publication of an implementation schedule for the U.S. government’s commitment to IATI and the initial posting of data, which will continue in 2013. PSI is one of the first large, U.S.-based global health organizations to publish data onto IATI, and we applaud the U.S, U.K. and other donor governments’ commitments to key transparency initiatives. Additionally, the makeup of the U.S. government itself poses an opportunity for global health. Movement within the Administration – including Ambassador Eric Goosby to head the new Global Health & Diplomacy Office within the State Department in addition to his role as the Global AIDS Coordinator, a new Secretary of State John Kerry and other key offices – provides an occasion to view many global health challenges with fresh eyes and new energy. Perhaps most exciting, however, are the changes and opportunities the new Congress brings. The 113th Congress is the most diverse Congress in history, and in a nation that prides itself on its diversity, uniqueness and innovation, I am eager to watch what the new class brings to Capitol Hill and our country. I urge Congress to maintain the largely bipartisan support it has shown global health over the past years and continue to foster strong, passionate global health champions on both sides of the aisle. n
Effective Foreign Assistance is Critical to Economic Growth
or the first time since the recession ended, our economy shrank by 0.1 percent this past fall. Meanwhile, the Eurozone unemployment rose to 11.8 percent in November, the highest since the Euro currency was founded in 1999, according to the statistical agency Eurostat. While the rest of the globe struggles to climb out of the recession, subSaharan Africa grew at a rate of nearly 5 percent for the second year in a row, according to the World Bank. This presents an opportunity for economic growth right here at home. In 2011, U.S. goods and services exports reached a record $2.1 trillion, an increase of 33 percent over the level of U.S. exports in 2009; now 14 percent of our economy depends on exports. Opening new markets to American companies means more jobs for Americans, but as any private company CEO knows, we need to make sure we are being smart about our investments and maximizing the returns.
Efforts to do just that are already underway, notably in the great state of Texas. The University of Texas, along with the College of William and Mary and Brigham Young University, runs the largest public access database on project-level development in the world. AidData tracks more than $5.5 trillion in development aid and more than 1 million development projects globally. But we must do more. Last Congress, the House of Representatives unanimously passed a bill, which I introduced, called the Foreign Aid Transparency and Accountability Act of 2012. Requiring measurable goals, performance metrics, and monitoring and evaluation plans for all foreign development assistance programs, this bill would bring increased transparency and accountability to the foreign assistance process. U.S. taxpayers would be able to both exercise their right to be informed about where their money is being spent and to see the impact of U.S. foreign assistance around the world. I look
forward to reintroducing the bill this Congress and building on last year’s momentum. I also introduced HR 3658, the Senator Paul Simon Water for the World Act of 2012 to enhance U.S. leadership on the global safe drinking water, sanitation and hygiene (WASH) crisis by streamlining existing programs and applying aid effectiveness principles. A smart investment, WASH efforts have been shown to return at least $4 in productivity for every $1 spent. Americans should be proud of the countless lives we have saved and the direct economic and security benefits here at home. Now, more than ever, is the time for – smart and effective – growth.
Rep. Ted Poe (R-TX)
Investing in Women for Our Future
hroughout my tenure in the U.S. House of Representatives and on the Committee on Appropriations, I have had the opportunity to help shape U.S. development assistance. And I am proud of the United States’ leadership in providing support and funding for critical global health initiatives that both save lives and strengthen our position in the world. While we have made incredible gains over the years, there is still more to be done and I am committed to ensuring the U.S. continues to reach those most in need. Though half of the world’s population, women represent a staggering 70 percent of the world’s poor. These women face too many barriers to lift themselves and their families out of poverty, and I believe that we have the ability and responsibility to dismantle many of those barriers. One of the most important ways we can help is by investing in women’s health. Last May, I introduced legislation to help end obstetric fistula, a debilitating condition often
caused by prolonged, obstructed childbirth and overwhelmingly affecting women and girls in sub-Saharan Africa. By establishing a 10-year strategy to combat this preventable condition, the United States Leadership to Eradicate Obstetric Fistula Act of 2012 would have real results for women and their families. Addressing the nutritional needs of women and children is another important investment that we must make. The global food crisis has a disproportionate impact on women and children in developing countries. As a member and former chairwoman of the Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies, I am working to promote and invest in anti-hunger and nutrition programs, including international food aid. Ensuring that women and their families have access to the nutritious food they need to grow up healthy and strong creates a positive ripple effect across society as a whole. We know, for example, that the right nutrition
for mothers and young children could improve a country’s gross domestic product by at least 2 percent. Investments like these are crucial steps to improving the health of women globally and, in turn, allowing them to gain better access to the rights and opportunities they deserve. These investments represent the less than 1 percent of the federal budget that goes to international aid and show an incredible return, as women are more able to be active participants in their society and contribute to increased global economic growth, which in the end is to our great benefit.
Rep. Rosa DeLauro (D-CT) psi.org | impact
a word from our partners
From ‘We are the World’ to ‘We Are a Tribe’
Communicating Global Health During Diffusion
y mother and I were driving back from soccer practice when I first heard Michael Jackson and other superstars sing out “We are the World.” It was 1985 and I was 12. I knew I wanted to do my part the minute I heard that song.
Soon after, I begged my mom to take me to the mall so I could buy an oversized “We are the World” T-shirt. I wanted to help starving kids in Africa, but I wanted to be cool at school too – everybody was talking about that shirt. Wearing it was part an attempt to fit in and join the tribe, and part a genuine act of empathy. Hunger was on my do-gooder plate because someone put it there. They set my agenda.
Americans consume an average of 12 hours of information—media—each day. It’s exceptionally challenging for a cause to break through.
>>>>>>>>>>>>>>>>>>>>>> Campaign after campaign has tried since, but few have felt like the “We Are the World” tribe from 1985. Why? The internet. While creating new opportunities, the internet has made it challenging for a cause campaign to singularly capture attention. The guys on the nightly news used to tell us what to care about. Then it was Oprah. We now get messages from our masses. Our friends engage us in the cause they care about – sometimes incessantly. Compassion fatigue is setting in. Americans consume an average of 12 hours of information – media – each day. It’s exceptionally challenging for a cause to break through. Despite this new normal, global health sticks out as issues on people’s minds – not top of mind, but still there. Why? Someone put it on our agenda.
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The Bill & Melinda Gates Foundation, the largest private donor to global health, put it there by funding organizations, programming, documentaries, social media campaigns and more. It’s working; in 2011, health organizations saw an estimated 2.7 percent increase in donations. The Gates Foundation understands the importance of an engaged public. It leads to funding innovation, bridging gaps, government support and lives saved. This is especially true during economic downturns when the tendency is to spend within instead of helping people “over there.” The next big challenge I see is at the intersection of communications diffusion and disinterest in “over there.” It’s not easy, but with the following strategies, I believe it’s a solvable challenge. ➊ Mass market campaigns are still important. Because of our new ability to personalize the content we consume, it is going to be more and more important to specifically engage people in their tribe. That’s where smart social media campaigns come in. Increasingly, engagement will be rooted in social marketing, gamification and face-toface connectedness. We’re wired for human connection, so the global health tribe leaders need to find ways to bring people together and do the things they love in support of the cause. Volunteering, micro-investing, hyperlocalization, community spirit – those are the new, untapped potentials. ➋ Communicating solutions is critical. Researchers from the University of Notre Dame have found that people are more likely to give when they can see the specific impact of their donation. It’s pretty simple. People want to know they are making a difference. The rise of solution journalism by reporters
is an experienced executive, social entrepreneur, communications strategist, writer and commentator. As partner and Chief Change Officer of Fenton, the largest, global, social change communications firm, she leads the firm’s work in innovation and behavior change and co-leads the practices in women’s issues, health, violence prevention, philanthropy and global affairs. Witter is co-author of The She Spot: Why Women are the Market for Changing the World and How to Reach Them.
Follow Lisa on Twitter at @lisamwitter.
like David Bornstein is a beginning, but nongovernmental organizations and governments need to communicate when things are working. ➌ Connect to home. According to science reporter Benedict Carey, it is much easier for our brains to extend empathetic concern to a neighbor than to a nation. Whenever possible, global health advocates should look for ways to connect issues back home. Vaccinations are just as important in the U.S. as they are “over there.” People get the danger when their child has diarrhea and why they’d want to support families just like them. While it is true that donor money goes further in developing countries, helping people at home is a sign of solidarity and a smart political investment. The days of the “We are the World” massive attention-grabbing campaigns are over. Keeping global health on the tribe’s agenda won’t just happen – we’ll need to make it happen. n
a word from our partners
THE ECONOMICS OF GLOBAL HEALTH INVESTMENT
he idea that something as fundamental as how long you live could be based primarily on where you are born would seem fantastical in a sci-fi novel, but it is the reality of our world. Understanding that every day, every hour of lost human life is a wasted resource is what propels
the economics of global health investment. And this economics is beginning to transform the way the rich world approaches global health. When global health giving was viewed as charity, it was naturally limited. How much charity can wealthy countries, companies and developing world elites give? But once we begin to view global health from an economic lens – as has begun to happen in the past several years – it becomes apparent that investments in global health yield substantial and measurable returns. And so the U.S. Congress can justify billions for anti-retroviral drugs given halfway around the world because a line can be drawn not just to our hearts but to our exports, our companies, our jobs. Even developing country governments with constrained budgets are beginning to see the economic and political payoff of global health spending. Voters love it and the economy benefits. This is a virtuous cycle and so, as this PSI report shows, spending on health by developing country governments is on the rise. The private sector sees this, too. Pharmaceutical companies and impact investors look at countries with lots of sick people underserved by an inadequate health infrastructure and see a market opportunity. Not an easy one to be sure, but as supply chains improve, health workers get trained, and health systems get modernized, which leads to real, sustainable business even in the poorest countries. And the many billionaires – most newly minted during two decades of globalization and growth – who will soon begin to donate large sums through the Giving Pledge will find that their love of return on investment and
their desire to do good point in one direction: global health. Expect mini-Gates Foundations to bloom. All of this must change the way the donor community looks at global health. For many big emerging economies, donor funds are but a small fraction of total health spending. Donor money in such economies must be catalytic if it is to have any lasting impact. Elsewhere, donors remain a primary source of funds, but must find ways to encourage private and philanthropic investments in health if they hope to create a path to growth. The data in PSI’s report suggest that we are likely to see donors focus more on creating the health infrastructure needed to attract outside investment: training programs for health workers, supply chains for pharmaceuticals, modernized systems for government-run health facilities, and other bedrock necessities to create the foundation for investments. In addition, donors may increasingly align their activities with investors and private companies through partnerships, with official donors helping to create consensus around a national plan supported and run by the health ministry. Ultimately, the global development community will benefit from a more investmentoriented approach to global health, just as it will in other areas. The growing role of emerging donors, muscular private foundations, intrepid investors and multinational companies, and developing country governments themselves is
is the President of Devex, a social enterprise where he leads more than 100 reporters, analysts, and media professionals around the world. He has been profiled in Forbes, the Financial Times, Foreign Policy, and the Washington Post, which called Devex the Bloomberg of foreign aid. Raj is a former Principal and Political Director of Penn, Schoen & Berland, and has worked on nine presidential campaigns around the world. He is a life member of the Council on Foreign Relations, a member of the Clinton Global Initiative, speaks Spanish, and has worked, studied, and traveled in 50 countries.
forcing traditional development agencies to reassess their own roles. Such roles should focus on removing the constraints to the growth of a domestic healthcare industry while immediately acting to save those born into the world’s poorest circumstances. But none of this is possible without understanding what is happening in the complex interconnected world of global health, so I congratulate PSI on digging into the data and casting some light on what we can expect in years to come. We, at Devex, are pleased to be a part of this important endeavor. n
psi.org | impact
PSI President and CEO
Accountability for Better Health Outcomes
ID is changing rapidly. Traditional labels such as ‘donor’ and ‘recipient’ are less defined today than they once were. A number of emerging economies that receive foreign aid are now donors themselves, and we are seeing greater financial support of domestic health programs coming from recipient countries. Corporations are moving away from charitable giving and developing business models that leave a social footprint, and at the same time, increase financial performance. Foundations continue to play a role in financing the type of innovation needed to make health solutions more affordable, efficient and effective. The philanthropists of today realize their investment in pilot projects and innovation can spark future government funding by helping to prove the effectiveness of interventions. And non-traditional sources of funding are being developed to bridge the resource gap that still exists to finance essential healthcare needed for the poorest among us. Impact investing is all the
ing all our program descriptions and financial data in accordance with the International Aid Transparency Initiative. This initiative is making it possible to report data in a timely, easy-to-use format that is accessible to anyone who wishes to make use of it – funders, partners, beneficiaries and consumers. You can read more about IATI on page 32 in our Policy Matters section. We know that development assistance helps keep women, children and families healthy; it keeps kids in school; it helps improve agricultural production; and it reduces poverty and suffering. All development assistance is useful at the margins. What we don’t always know is exactly how much money is spent, where it is spent or on what it is spent. We don’t always know the cost-effectiveness of our work. Transparency initiatives like IATI present the aid community with a unique opportunity to bring more honesty, accountability and ultimately effectiveness to our work. I want to thank Devex for their invaluable contribution to the contents of this special report on global giving, and for their dedication to maintaining an open and transparent aid process. n
© Benjamin Schilling
▼ Below, Karl Hofmann talks with Charlotte Kabirigi during a visit to Burundi. Charlotte, 33, has had seven pregnancies, but lost three of her children to malaria.
rage – even if there isn’t consensus around what that term really means. With so many stakeholders, so many development challenges still to solve, and so many questions around how all of the pieces fit together, there is greater need than ever for clarity around the metrics of our success. Challenges around creating shared value partnerships are the conventional ones that any two business partners might face. In the development context, though, we face the added requirement to collect and analyze feedback from those who are meant to benefit from our work. The clarity of the market is not often available to those who want to judge development success. Whether the marketplace for the private sector, or some other means for governments and organizations working in development, we can agree that when there are systems in place to provide accountability to those who are served, outcomes are better. One key ingredient for such accountability is transparency, which can help reveal weaknesses in our work, and help us improve faster. That is why this past February PSI began publish-
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WORKS CITED The below resources were either directly cited or used as supporting research in the report.
GOVERNMENT SECTOR: DONOR ANALYSIS Institute for Health Metrics and Evaluation. “Financing Global Health 2011: Continued Growth as MDG Deadline Approaches” (2011). Kates, Jennifer. “The U.S. Global Health Initiative: Overview & Budget Analysis.” Policy Brief. The Henry J. Kaiser Family Foundation (2009). Kates, Jennifer et al. “Financing the Response to AIDS in Low- and Middle-Income Countries: International Assistance from Donor Governments in 2011.” The Henry J. Kaiser Family Foundation and the Joint United Nations Program on HIV/AIDS (2012).
14 FOUNDATION SECTOR: PRIVATE DONOR ANALYSIS
Foundation Center. "International Grantmaking Update: A Snapshot of U.S. Foundation Trends" (2012). Inter-American Development Bank. “Public-private initiative will improve health conditions of 1.8 million poor women and children in Mesoamerica” (April 17, 2012). www.iadb.org/en/news/ news-releases/2012-04-17/ public-private-mesoamerica-health-initiative-2015,9953. html (Accessed May 13, 2012) Lawrence, Steven and Reina Mukai. “International Grantmaking Update: A Snapshot of U.S. Foundation Trends.” Foundation Center (2010).
1 0 GOVERNMENT SECTOR:
DONOR AND RECIPIENT ANALYSIS
Chunling, Lu et al. “Public Financing of Health in Developing Countries: A Cross-National Systematic Analysis.” The Lancet (April 17, 2010). Global Impact. “2012 Environmental Assessment” (2010).
18 FOUNDATION SECTOR:
CORPORATE DONOR ANALYSIS
Institute for Health Metrics and Evaluation. “Financing Global Health 2012: The End of the Golden Age?” (2012).
Poppe Rose, Alison. “Giving in Numbers: 2011 Edition.” Committee Encouraging Corporate Philanthropy (2011).
Sharma, Rajeev. “India extends Development Hand.” The Diplomat (June 9, 2012).
Preston, Caroline. “Rethinking Corporate Giving: Western Union’s CEO Offers Her Philosophy.” The Chronicle of Philanthropy (June 3, 2012).
EMERGING MODELS: IMPACT INVESTING
Business Wire. “LeapFrog Expands Insurance Industry in West Africa via Record Foreign Direct Investment” (April 24, 2012). www.businesswire.com/news/ home/20120424005205/en/LeapFrog- ExpandsInsurance-Industry-West-Africa- Record (Accessed September 5, 2012). Credit Suisse Research. “Stories of Private Impact Investors.” Investing for Impact: How social entrepreneurship is redefining the meaning of return, 41-43 (2012).
Dichter, Sasha et al. “Closing the Pioneer Gap.” Standford Social Innovation Review. www.ssireview.org/articles/entry/ closing_the_pioneer_gap. (Accessed March 22, 2013). Fleming, Gregory (interviewer). “A View from the Top: Trends in Impact Investing.” Investing for Impact: How social entrepreneurship is redefining the meaning of return, 10-11. Credit Suisse Research (2012). O’Donohoe, Nick et al. “Impact Investments: An emerging Asset Class.” J.P. Morgan Chase & Co., Rockefeller Foundation and Global Impact Investing Network (2010).
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