How is the Freeze on Global Fund Funding to China Affecting Grassroots Groups?

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Introduction: This article sheds much-needed light on a very complex situation triggered by the Global Fund’s announcement in March of 2011 that it would freeze its HIV/AIDS funding in China1. It has been widely speculated that the Global Fund’s decision would cripple many of the grassroots groups that relied on Global Fund funding, but this report based on interviews with a number of the more established grassroots NGOs in this sector suggests that the situation is more complicated. What is clear is that grassroots HIV/AIDS groups will have to adapt to a very different landscape and different set of challenges in the next few years as the Global Fund withdraws from China. The last part of this article, in particular, raises a number of questions. In the absence of Global Fund money, will the Chinese government come through with funding for grassroots groups? How will that money be managed and disbursed, and what kind of groups will benefit from it?

On May 28, 2011 the media reported the Ministry of Health confirmed what had already become a hot topic within the philanthropic sector: China’s Global Fund payments had been frozen. According to the China Global Fund Watch 《中国全球基金观察》March newsletter, the China Global Fund Rolling Continuation Channel (RCC) Project included a total of 753 social organizations that had successfully applied for 8,442 projects. The funding used to support these projects was estimated at U.S.$3.2 million. What impact will the funding freeze have on grassroots organizations? For grassroots organizations working in the field of HIV/AIDS, how will they survive?

Background

Founded in 2002, the Global Fund, (short for the “Global Fund to Fight AIDS, Tuberculosis, and Malaria”) is the only international financial organization established in cooperation with governments and non-governmental agencies. Since 2003 China has reportedly received $539 million in aid from this organization. The funds are used primarily for lowering the rate of tuberculosis transmission, preventing and treating HIV/AIDS and eradicating malaria. This article is concerned with the temporary freezing of the funds for the HIV/AIDS projects.

Applications for the Global Fund are made by individual states which form a National Coordinating Committee, referred to as the CCM. In accordance with the requirements of the Global Fund, the CCM acts as a mechanism which considers, approves and coordinates applications made to the Global Fund. In addition, the CCM monitors and guides the projects that have been granted approval by the Global Fund to be implemented within China. The Center for Disease Control and Prevention (CDC) in China was assigned as the Principal Recipient (PR) of the Global Fund aid. It is responsible for the formulation of the approved projects and their implementation. The CDC is supervised by the CCM and is responsible for regular reporting to the CCM on the project implementation2.

According to Chang Kun, the founder of AIBO Qingnian Huodong Zhongxin (AIBO青年活动中心) (“常坤的家”), in November 2010, the Global Fund’s secretariat signed a contract with Curatio International Consultancy Ltd and YozuMannion Ltd, requiring them to carry out an external assessment of the entire China HIV/AIDS RCC Project. The freezing of the Global Fund in China is related to this assessment, as well as to continued dissatisfaction expressed through letters sent by community organizations, individuals and other bodies. Prompted by non-governmental input, the Global Fund has in fact become increasingly transparent. However, more than a few problems have accumulated over the years. Among these problems, the greatest controversies are over the allocation of funds and the fraudulent use of funds.

The Impact on Grassroots Organizations

The Mangrove Support Group (红树林) is a web-based HIV/AIDS prevention organization and is unaffected by the freezing of the Global Fund. Its founder Li Xiang says “Mangrove is not representative of other grassroots organizations. In terms of funding, we have received assistance from the Global Fund, but it is less than five percent of our total funding. Also, since 2008 we haven’t applied for any Global Fund projects.” In the last 3 years, Mangrove’s main funding has reportedly come from an international foundation. They only do online projects and participate very little in other HIV/AIDS projects. Li said “I’m not really clear about the changes in the Global Fund over the last few years because I’ve participated very little in them.”

The China Women’s Network Against AIDS was formed from 21 smaller groups and is led by He Tiantian. Following the freezing of the Global Fund, this network looked into these smaller groups’ sources of funding. Out of their 21 members, there were 5-6 groups that had, in the past, used money from the Global Fund. Of these groups, half received almost all of their funding from the Global Fund, while the other half received other types of funding for their activities. Those groups that had relied solely upon the Global Fund have essentially stopped their work. However, on occasion, they still undertake activities, since networking activities between members don’t necessarily need monetary support.

On his microblog, Meng Lin the leader of Beijing Ark of Love (北京爱之方舟) related the statistics from a rapid assessment report. Over 80 percent of NGOs in the field of HIV/AIDS prevention and treatment have felt the impact of the frozen funds. Meng said the freezing of the Global Fund’s assistance to China will undoubtedly be a great blow to grassroots organizations. Looking at the situation just six months after the freeze, cases of unemployment are already starting to appear.

Cai Lingping, the leader of the National AIDS Information Network (CHAIN) 全国艾滋病信息资源网络 says that if we are to assess the impact of the temporary freezing by the Global Fund on NGOs, we first have to differentiate between exactly what types of NGOs were carrying out Global Fund projects. Ping’s understanding is that aside from associations and institutes of learning, community organizations can also be divided into several types. The first is spontaneous organizations. These organizations already existed and were already undertaking community services and advocacy work before the Global Fund entered China. Thus it would be possible for them to continue without the Global Fund. The second type is the project-induced organization. This type of organization was conceived and born of the Global Fund, established for a specific target group. However, their main purpose is to complete work on the Global Fund projects. Those organizations that developed may continue their work even without the Global Fund. Those that have not developed will dissolve. The third type is the parasitic organization. The staff of this type of organization belong either to the CDC or are part of intervention teams for high risk groups, therefore, regardless of whether or not there is Global Fund aid, they will continue their original line of work. This type of organization is also what many in the community call “fake organizations3”. From the above, we can see the complicated composition of NGOs related to the Global Fund. The impact felt by different types of organizations will also differ.

AIBO’s Chang explained that, before the RCC program, different rounds of the Global Fund projects had different definitions for non-governmental and community organizations. This process is being continually redefined. However, the process of refinement is also one of increasing clarity, for example, in the beginning, GONGOs were also considered non-governmental organizations. Later, more detailed distinctions between community-based organizations (CBOs), social organizations (SOs or shetuan), and other types of organizations were made. Nonetheless, there are still huge disagreements, as parties with different interests have separate understandings of social organizations4.

Chang is a critic of the Global Fund. He manages China’s largest email group for HIV/AIDS, which once held a protest called “Get Lost Global Fund” (“全球基金滚蛋”) organized by people infected with HIV. (chinaaidsgroup@googlegroups.com). He says that among the various levels of organizations implementing Global Fund projects, there is a lot of “creation and fabrication of organizations” for the purpose of laundering money5.

Chang also believes that the current system for implementation of Global Fund projects has hurt the development of civil society: “Now, when community organizations have no money, they don’t get anything done. In the past, we were helping people to help themselves, we were taking on responsibility. Now if we make up a questionnaire for our research, if there’s no money, then no one fills in your questionnaire.” He believes that up until now, those most needing regulation were not government but grassroots organizations. The Global Fund has had some negative consequences. Doing a Global Fund project worth 20,000-30,000 RMB, you will often hear that half of the money made its way back to the leader of the organization. “The development of grassroots organizations needs to go through a process, that is understandable, but the key is, when there are people ‘doing wrong,’ we need to have a mechanism to redress this. But these organizations, in order to complete a Global Fund project, will cover up ‘wrongdoing’ and even assist in the falsifications.” He believes that the heart of solving this issue is in opening up the registration process of organizations.

Why Was Funding Blocked?

During a media interview, Jia Ping, the author of the China Global Fund Watch said that the RCC program consolidates all the HIV/AIDS prevention resources in the country. This includes the funds of the central government, provincial, municipal and county (district) levels, as well as the funds from other international cooperation programs. This comprehensive rolling program can be applied for through the Global Fund Rolling Continuation Channel (RCC). The entire sum includes about $2.2 billion (USD), of which $509 million is from the Global Fund. Beginning in 2010, this amount was to last for a period of 6 years. Beijing Ark of Love’s Meng said the RCC consolidation of resources should not represent a concentration of power, but in reality it is just that.

Funds are now not getting to real grassroots organizations. There are many reasons for this. In Meng’s view, the China and the West have different understandings of what a NGO is, as well as different social and cultural systems. The Global Fund requires that a part of the program funding be given to NGOs for implementation, but what exactly is a NGO? This is still being argued over, and now the time has come for the Global Fund in China to reform. It has come to the point where it must address this problem. The next step is to make clear what it means to be a civil society with no government backing and how to differentiate between these different types of organizations.

CHAIN’s Cai Lingping analyzes the reasons for the blocking of funds from a structural point of view, by dividing the Global Fund’s work in China into three areas. The first is to supply medicine, for example to provide China with free medication. This “life money” has not been temporarily stopped. The second is to support the participation and development of China’s grassroots NGOs; however, the difference between the Global Fund and the Chinese government in “defining what constitutes a NGO” is one of the reasons that has brought about the temporary freezing of funds. The third area is to strengthen services for, and the capacity to build, health and disease-related prevention systems. Of course, in the process of implementation, many of the Global Fund’s principles have been influenced by the Chinese government. However, in the past, the Global Fund was mainly targeting specific regions, whereas the new round of the RCC Program, launched in 2010, emphasizes “integration,” including integration of management, planning, funding and targets. In reality, the Global Fund has been integrated into the overall state plan. These strategies, resources, targets and so on have been integrated into the state system and international resources have become part of the national budget. Due to policy and management limitations, grassroots organizations cannot be “integrated” into the state system6. These results demonstrate that the China Global Fund has not done what was agreed to: that is to ensure a certain amount of project funding would be allotted to grassroots organizations.

Cai says that what the RCC program enables us to see is “one country, two systems.” Although the project managers are the national and local level CDCs, part of the project implementation is done by NGOs. Yet, many NGOs are not part of the official system for resource allocation, management, training, assessment and so on. From the perspective of the system and government policies, “integrating” NGOs into this system would be extremely difficult. This structural element is the first reason why China is unable to reach the requirements of the Global Fund. The second issue is a problem with the awareness of government officials. In other words, it is far from clear that different levels of government are willing to support the development of NGOs, or whether or not they trust the development of NGOs. Finally, the third problem lies in the limited capacity of the community organizations themselves.

Continue “Sifting”

Among the people that work in HIV/AIDS prevention NGOs, Meng has an important role. As leader of the Beijing Ark of Love Support Organization for those Infected with HIV(北京爱之方舟感染者信息支持组织)he is a representative of the CBOs and NGOs at the China Global Fund Program’s Country Coordinating Mechanism (CCM Representative). In email groups, he is often criticized by community organizations for his role in the CCM.

His basic understanding of the current situation of the China Global Fund HIV/AIDS Program is that: “First, the Global Fund can play an important role in China’s HIV/AIDS prevention and treatment and in the building of China’s civil society. Second, the current mechanism for management is not conducive to the fair participation and sustainable development of grassroots NGOs, this is something that is patently obvious.” In an interview with the China Development Brief he said: “These two lines of thinking have gotten me into trouble since my work is a reflection of both of these views.”

While the government does hold responsibility for the creation of the present impasse, NGOs also have their own problems. Meng says that the Global Fund is not to be treated as a type of welfare to be handed out to grassroots NGOs, rather it must be given to NGOs that possess the capacity to implement projects. You can not think that just because you are a grassroots organization, or you are infected with HIV, or are homosexual, therefore you deserve to be given this money. This will lead to chaos in our way of thinking and in the allocation of resources.

The freezing of the Global Fund is just a turning point; in fact, this freezing is the appropriate response as the development of the community reaches this phase. Meng notes: “The next step is to assess and rate NGOs. For example, after A-level organizations reach given standards, they need not have a cap on their funding applications. If they have the capacity to execute projects worth 5 million RMB then they should be allowed to do so. New organizations should not push them aside. For example, C-rated organizations – those at the beginning stages of their development – can also be subject to certain standards and aid requirements.”

At the moment, outside observers view the competition between HIV/AIDS organizations as simply “dog eat dog”, but in reality it is very complicated. There are conflicts of interest but also of principle, as well as a lack of communication. Meng says that from the aspect of government implementation, the Global Fund has already clearly put forward its requirements for reform. The government has also clearly shown it will respond to these issues and has put forth various measures. From now on, if the community of NGOs doesn’t reflect upon itself, if it doesn’t strengthen its own internal functions, it is destined to be eliminated. How to honestly improve, how to begin cooperation, how to control infighting and internal conflict are all problems that await a solution7.

Meng candidly stated: “I’m currently planning to invite my online critics to Beijing, and ask them, face to face, for their ideas. In addition, I will invite an international observer to this scene. This is the ideal first step in moving towards building cooperation. In the past, we haven’t had time for this, because we still had to consider the relationship between democracy and efficiency. They thought that we were the ones who do the resource allocation, when in fact we aren’t. They’ve got it completely wrong. It’s because of these misunderstandings that they criticize us. Of course because I’m at the grassroots, my field of vision is limited, the ability to communicate and to compromise have become huge obstacles. I’m also doing some reflecting and taking it slowly. None of us are the messiah.”

Mangrove’s Li Xiang believes that the constant bickering is a sifting process. He said: “in the past, Mangrove was on the inside, acting as a representative, but since the 2006 Wuhan Conference, I felt this “inner circle” lacked energy. In spite of this, I still think that if we take a step back, a messy argument is an inevitable process. It’s a process of waves sifting out the bad sand, and it also has a positive side, so we should let it have a voice. This process of sifting still hasn’t finished.”

A Way Out for Raising Funds

I asked AIBO’s Chang: “What will the future fundraising situation for grassroots organizations be like once the Global Fund has gone?” He explained that the real meaning of kicking out the Global Fund is kicking out the Global Fund’s implementing bodies in China. Structural reforms are needed, such as whether or not there can be a double Principal Recipient (PR) mechanism to create competition in the same way that the acquisition of China Unicom’s CDMA by China Telecom sparked competition between China Mobile, China Unicom and China Telecom8.

He Tiantian mentioned that at the moment everyone is in a state of confusion. After all, the assistance given by the Global Fund is not much, 20,000-30,000 RMB is not enough to sustain the normal operations of a grassroots organization. Furthermore, the Global Fund does not cover office costs or salaries for staff. Even the Women’s Anti-AIDS Network has never applied for Global Fund support. Almost all of its funding still comes from UNAIDS, with some coming from a French catering company in Shanghai called Kathleen’s 5. This network is currently seeking solutions to its funding issues, looking, for example, to enterprises to raise funds. But it is still in the initial stages and has not taken specific action.

In the search for domestic funds, Mangrove has made its first small step. Li Xiang says that now there is indeed funding to be found for HIV/AIDS from domestic foundations. However in terms of the area and direction of their funding, these donors are very narrow-sighted, whereas some international organizations support projects on a long-term basis and the impact they produce is also long-term. Mangrove’s main source of funding also only lasted until this year. For them, this year is a period of transformation and transition. At the moment, Mangrove is using internet projects to broaden its long-term cooperation with other organizations . Recently, they have participated as one of the parties undertaking a project sponsored by a public trust fund. Basically, the trust fund has assigned a certain amount of its donations to this project.

CHAIN’s Cai worries that if the Global Fund does leave China, this would be a challenge for both NGOs and the government. As part of the national spending on HIV/AIDS prevention and treatment, the funds provided by the Global Fund amount to less than 20%. However in the budgets for 2010 and 2011, all NGO funding was provided by the Global Fund. If the Global Fund leaves, will the government have to supplement its investment in the NGO sector? While the Global Fund has not yet left China, should NGOs be lobbying the government to “set aside part of its budget to purchase NGO services?”

The Growth and Contribution of HIV/AIDS Prevention Organizations

HIV/AIDS prevention organizations are an important part of the public welfare sector, yet for various reasons, this group is little known by outsiders. Even among those within public welfare circles, there is little cross-sector communication. Some outsiders might observe and be discouraged by the bickering among the email groups of HIV/AIDS organizations, using intense and aggressive language. However, Cai has high praise for the work done by HIV/AIDS-related NGOs. She believes that through the Global Fund, grassroots NGOs have done a lot of work. She even says: “I haven’t seen NGOs in any other field engage in direct dialogue at the national and international level with the government, and we have to remember that this is dialogue with a guarantee9. For a NGO representative and an HIV-positive patient to act as decision-making members of the Global Fund Country Coordinating Mechanism (CCM) is a really fantastic system. In reality, since the start of the RCC program, these two representatives have been influencing national strategy design and funding allocation, while the national NGO Advisory Group (NGO咨询小组) and local level NGO Advisory Group are also influencing project management and implementation. From a more positive perspective, the Global Fund is not simply a pot of money; more importantly, it provides a mechanism for NGO participation. NGOs working in other fields should increase their understanding of HIV/AIDS NGOs because, against similar struggles, HIV-positive individuals, homosexuals, sex workers, intravenous drug users and groups at the fringes of society, have used their intelligence and courage to undertake their work. This really isn’t easy.”


  1. In September of 2011, after this article was published, the Global Fund announced it would reverse the freeze, but indications are that GF funding to China will be scaled back this year and eventually ended 

  2. Editor’s Note: The CDC in China is part of the public health bureaucracy and is subordinate to the Ministry of Health at the national level. At the local level, CDCs and the Health bureau are essentially one and the same. 

  3. Editor’s Note: These parasitic organizations, in other words, are created by officials, or those with official connections, to mimic grassroots organizations in order to gain funding. 

  4. Editor’s Note: This paragraph shows how complex and ambiguous the public welfare, civil society sector is. CBOs are generally small groups or organizations working in urban or rural communities and are often not registered. SOs are registered with Civil Affairs, and many of them are GONGOs, yet they see themselves as the equivalent of NGOs or nonprofits. What constitutes a NGO or nonprofit is often in the eyes of the beholder. 

  5. Editor’s Note: This is a frequent complaint about HIV/AIDs groups in China where the sudden influx of Global Fund money has led to groups being created to tap into the funding without being held accountable for their work. 

  6. Editor’s Note: The policy and management limitations refer to the restrictive environment that makes it difficult for many grassroots organizations in China to register as legal “social organizations”. As a result, many of these organizations are not registered and technically not legal. 

  7. Editor’s Note: Here, Meng alludes to the problems and divisions that plague the HIV/AIDs community in China. 

  8. Editor’s Note: As explained earlier, the PR for the Global Fund in China is the CDC. The idea proposed here would be to create two PRs so that the CDC would face some competition in the management and disbursement of funds. 

  9. Editor’s Note: Here Cai is referring to the Global Fund’s Country Coordinating mechanism (CCM) which allows NGOs and others from the HIV/AIDS community a seat at the table with government and international organizations in making decisions about the allocation of Global Fund resources in China. 

In Brief

This article sheds much-needed light on a very complex situation triggered by the Global Fund’s announcement in March of 2011 that it would freeze its HIV/AIDS funding in China.
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