Avoiding the Economics of Mistrust: Getting Resources Reliably to the African Grassroots

Two recent articles have raised important issues in international development and for those of us responding to the AIDS epidemic to support communities, families, and children made vulnerable by HIV and AIDS. The articles from Foreign Policy and The Associated Press criticize The Global Fund to Fight AIDS, Tuberculosis and Malaria for the presence of fraud in funded organizations, all of them in Africa. The Global Fund is one of the largest funders to organizations addressing HIV and AIDS. Their support to low and middle-income countries enables individuals and communities to access antiretroviral therapy and health and community services that provide preventative education and essential support to those living with HIV and AIDS. Lives depend on their funds and support.

The Global Fund isn’t perfect and doesn’t claim to be; they have publicly acknowledged the problem, have demanded the return of misspent funds, and stated their strategies to address the issue with diligent oversight and transparency. We at Firelight are impressed by the Global Fund’s transparency in bringing these issues of fraud to light, and in taking clear steps to address them.

Grandmother signing for funds with thumbprint

Here at Firelight, the articles have raised another concern--reinforcement in the public’s mind that corruption is the norm in Africa. While corruption can indeed happen at all levels, our experience shows that with the right accountability measures in place, it becomes a rare occurrence. This has been our experience during our ten years of funding at the community level.

Strong mechanisms for accountability come from community-wide ownership of efforts to improve the lives of children. What matters most is the number of eyes on the cashbox. Everyone can count sacks of cement, bicycles, sewing machines, and know when they are missing. This is one reason we look for solid evidence of strong community involvement. Our mantra is: “show us you’re well-rooted in the community, that you’re well-managed, and then tell us what kids need.”

When community organizations first apply to us for funding, we engage a thorough process of review. We verify that the organization exists, has a strong commitment to children, deep community ties, a track record of making a difference, and transparent and knowledgeable leadership.

We do not set up costly compliance monitoring systems that would easily consume 10-20% of our grant funds. Our close relationships to grantee partners, and ongoing support from in-country colleagues allow us to avoid what you could call the “economics of mistrust” – setting up processes that are more costly than the abuse that they are designed to eliminate. Instead, we operate on a currency of openness and engagement. Ongoing communication and site visits play a critical role in monitoring use of funding. Investments in building the capacity of our partners, helps them develop financial management systems that have appropriate checks and balances and maintain transparency.

Grandmother receiving fundsIn spite of this, funds sometimes do get misused and we respond with the same levelheaded methods in which we assess all of our work. We do not jump to conclusions or suspend funds without investigation. Listening first allows us to take clear, informed action when problems surface.

In ten years of grantmaking in Africa, we’ve made 1100 grants to 330 grassroots organizations. In all that time, we’ve determined that only 2% of the funds granted were not reported on completely and correctly, and that only 0.5% were actually used fraudulently. It seems to us that 2% is a small price to pay for the other 98% to reach the people we’re trying to help.