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Performance-based funding is one of the core principles of the Global Fund. Simply put, it means that funding is dependent upon proven results measured against time-bound targets. Performance-based funding promotes accountability and provides an incentive for recipients to use their funding as efficiently as possible.
Global Fund grants are awarded on the strength of the initial proposal. When that proposal is approved and becomes a signed grant agreement, countries receive their first disbursement – generally the amount needed for the first six months of operation.
That grant agreement includes a list of targets against which the country will be measured, and which have been agreed by the country and the Global Fund. Each time the country requests their next disbursement, they must provide information on two key points: how has their funding been spent, and what results have been achieved with those funds? In other words, has the program achieved its targets?
Depending on the results, a grant is given one of four possible rating (A1, A2, B1, B2), and this will determine how much of the remaining funding can be accessed.
The Global Fund’s system of performance-based funding was developed to ensure that money is spent on delivering services directly to the men, women and children living with the diseases. At the same time, it provides a platform for countries to demonstrate that they can convert financing into results. And results – proven performance – are critical to raising funding from donors.
Performance-based funding ensures accountability, efficiency and effectiveness.
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