Graft Strikes At The Heart of Giving

Yesterday's announcement that contributors to the Global Fund to Fight AIDS, Tuberculosis and Malaria, notably the Bill and Melinda Gates Foundation, were victims of fraud came as no surprise to those of us involved in international work, especially in the developing world where governments and economies are shaky and corruption is a way of life. I'm reminded of work I did for causes in Ethiopia, where graft is rife. I quickly learned that the USAID and the World Bank had reduced funding there because their grants were being passed along to officials whose approval was needed to dig for water, build clinics or distribute food and clothing. Now, because of this latest controversy, foundations that might have felt it necessary to go ahead with the extortion, bribery and assorted lesser crimes just to get their missions accomplished, see the downside: not only public embarrassment but harm to their relationships with donors.

The Gates Foundation issued a statement late yesterday (1/24/2011) saying that "the Global Fund is doing a tremendous job of ensuring that critical health interventions reach those who need them most. Fraud allegations that have recently been reported in the news refer to a small portion of the Global Fund's resources - only four of 145 countries and $34 million out of a total disbursement of $13 billion. This fraud was discovered and reported publicly by the Global Fund, which has a rigorous audit and investigation system in place...we know that dealing with these hard-to-reach places is challenging, but not trying to save these lives is unacceptable." If the last sentence reads a little defensive, it may be that it foretells what everyone may expect to hear: "how much of my donation will go to graft?"

It appears that dozens of supporters who have pledged over $30 billion, are now holding off on fulfilling their commitments "until money is recovered or more is known about alleged misappropriations". What effect will this trend have on smaller donors, foundations and organizations that are doing good work in the developing world?