The second ebook in the Rotarian Economist Short Books Series has been published. Partnerships, innovation, and evaluation can increase the quality, scope, and reach of Rotary’s service work in communities. The book suggests with case studies how this can be done. All books in the series are free and available here in multiple formats. Please share this link widely with others for them to be able to benefit from this resource. And if you like the books in the series, please consider writing a quick review at Smashwords!
Every year, Rotary International publishes an annual report for the organization as well as the Rotary Foundation of Rotary International (TRF). As this is Foundation month in Rotary, it may be useful to provide basic statistics on TRF to underscore the good work done by the Foundation around the world and encourage Rotarians to donate.
In the US, Charity Navigator provides ratings for charities. Ratings are available for financial performance, accountability and transparency, and a combination of accountability and transparency. Charities can get one to four stars overall. TRF has a rating of 97 out of a maximum of 100 for financial performance, and a perfect score of 100 on accountability and transparency, which yields a four stars rating overall (the top rating).
In 2014-15, according to its latest annual report, TRF received contributions worth $269 million, a level similar (after inflation) to the contributions received in 2012-13 ($260 million). These contributions include funding from the Bill and Melinda Gates Foundation for polio eradication. While in the previous year investment gains were positive and large at $108 million, in 2014-15 there was a small investment loss of $5 million. This meant that after expenditures, there was no net contribution to assets. TRF ended the year with assets just under one billion dollars, as was the case the previous year.
Expenditures for 2014-15 were at $266 million. Of this amount, $224 million was provided for program awards (the rest of the budget is for program operations, fund development, and general administration). The program awards included funding for polio eradication whereby Rotary raised $35 million per year and benefited from a 2×1 match from the Bill and Melinda Gates Foundation worth $70 million, bringing the total contributions to polio to $105 million. The second largest expenditure was for global grants ($69 million). Funding for district grants was at $25 million.
In terms of areas of focus for global grants, the top category for awards were water and sanitation, as well as disease prevention and treatment (each awarded $20 million), followed by economic and community development ($11 million), basic education and literacy ($8 million), maternal and child health ($6 million), and finally peace and conflict prevention and resolution ($4 million). This last amount for global grants in the category of peace and conflict prevention and resolution does not include the allocation for the Rotary Peace Fellows program and associated Peace Centers.
Overall, it is fair to say that TRF is a highly respected foundation with a unique model for fundraising and the implementation of projects in partnerships with local clubs (through global grants) and districts (through district grants). The annual report of Rotary International and the Rotary Foundation is available here.
I encourage readers of this blog to contribute to the Foundation so that next year can again be a great year in terms of TRF’s reach and positive impact (for readers based in the United States, contributions are tax deductible).
New cases of polio have emerged in Nigeria. Ahead of World Polio Day, readers of this blog should know that Rotary and other international organizations are stepping up to the plate. In September 2016, Rotary committed an additional $35 million to end polio, bringing its contribution to $105 million in 2016. Two months earlier, the World Bank approved in June 2016 $575 million in additional IDA financing for Nigeria to scale up support for the North-East of the country. This includes $125 million for polio eradication over three years (2017-2019).
The World Bank program document for the additional polio financing notes that multiple obstacles remain to eradicating polio in Nigeria due to a lack of accessibility of some communities in the Northern States. This has led to special measures being introduced, including “(a) ‘hit and run’ interventions where vaccinators use any opportunity to go to difficult areas with the military and leave as soon as all children have been reached; (b)‘fire-walling’ that is, ensuring immunity in areas surrounding inaccessible villages; (c) using local people as vaccinators who can operate without drawing attention; (d) including IPV (Inactivated Polio Vaccine) in routine immunizations activities; (e) having transit bus-stop and market vaccination teams; and (f) ensuring that all internally displaced people residing in camps are covered.”
Despite these efforts, immunization coverage for polio and other vaccines in the North-East still lags far behind the national average. The $125 million additional financing for polio has two components.
- The first component provides $60 million for Oral Polio Vaccine (OPV) and other operational requirements of polio eradication activities. UNICEF will receive $50 million to procure OPV. The additional US$10 million will be used by UNICEF or WHO for a range of activities where funding gaps may be identified, including activities for Immunization Plus Days.
- The second component ($65 million) will help finance routine immunization. The inclusion of a component on routine immunization stems from the fact that it has been shown to be essential for interrupting the transmission of wild polio and thereby completing polio eradication, while also being a critical aspect of improving child and maternal health.
The program document for the additional polio financing is available here.
The difficulties in eradicating polio in the North-East are related in part to insecurity and a broader lack of services and development opportunities. The Boko Haram insurgency has deeply affected the states of Borno, Yobe, Adamawa, Taraba, Bauchi and Gombe, with negative impacts on an estimated 15 million people.
As per the press release for the additional financing package for the North-East, the other components of the package include:
- $75 million for the Nigeria Community and Social Development Project which provides immediate basic social infrastructure and psychosocial support to communities most affected by displacement;
- $100 million for the Youth Employment and Social Support Operation to provide youth, women and the unemployed (especially internally displaced persons, returnees and persons with disabilities resulting from the crisis) with labor-intensive work and skills development opportunities. Cash transfers will also be provided to displaced families and individuals as they return voluntarily and safely to and settle in their old or new communities.
- $50 million for the Third Fadama Development Project that addresses the emergency needs of farmers by improving access to irrigation and drainage services, delivery of agricultural inputs, and contributing to the restoration of livelihoods in conflict-affected households with a focus on women and youth.
- $100 million for the State Education Program Investment Project that supports the return to teaching and learning through financial incentives for teachers who have completed psycho-social training, and provide grants to schools to address their needs as identified by school-based management committees.
- $125 million for the National State Health Investment Project (plus $20 million from the Global Financing Facility) that will help to reestablish health services with a focus on maternal, newborn and child health, nutrition, psycho-social support and mental health. In communities in which health facilities have been destroyed, mobile clinics will be deployed to provide care.
As Rachid Benmessaoud, the World Bank Country Director for Nigeria explained it, “The needs are staggering. Millions of people have lost their livelihoods, schools and health facilities have been destroyed, and the psychosocial impact of the crisis must also be addressed. To help create economic opportunities for the most vulnerable, we have identified a set of initiatives that will have a quick and tangible impact on the population in four priority areas: agriculture, education, health and social protection.”
The World Bank press release on which this blog post is based is available here together with links to other related resources.
Polio remains endemic in only two countries: Afghanistan and Pakistan. Apart from polio campaigns, broader support for immunization is essential to eradicate polio. Two weeks ago (on April 21, 2016), the World Bank approved an International Development Association (IDA) credit of $50 million to increase the availability of vaccines for infectious diseases, including polio, for children under two years of age in Pakistan. Additional funding to the amount of $80 million is provided by a World Bank administered multi-donor trust fund, Gavi – the Vaccine Alliance, and the United States Agency for International Development. The Bill and Melinda Gates Foundation also participates through a buy-down mechanism (on what a buy-down amounts to, click here). Below is information on the project reproduced from the World Bank’s website (the original link for the information is here).
The National Immunization Support Project (NISP) is supporting the country’s Expanded Program on Immunization (EPI) that aims to immunize all children against eight vaccine preventable diseases: tuberculosis, poliomyelitis, diphtheria, pertussis, tetanus, hepatitis B, haemophilus influenza type b (Hib), and measles. Strengthening EPI will also support Pakistan’s access to newer vaccines which are either in the process of roll out (pneumococcal vaccine) or under planning (rotavirus vaccine).
The Project is also receiving additional support of $80 million grant from a World Bank administered multi-donor trust fund, Gavi – the Vaccine Alliance, and the United States Agency for International Development. The Bill and Melinda Gates Foundation is also supporting the project through an innovative partial conversion of the IDA credit into a grant upon successful achievement of project objectives.
“Pakistan is grappling with the public health emergency of polio virus transmission. Ensuring strong routine immunization services is the first essential pillar in polio eradication”, says Illango Patchamuthu, World Bank Country Director for Pakistan. “The World Bank and other development partners are working with the Government of Pakistan to strengthen routine immunization services at the critical endgame stage of polio eradication, particularly as Pakistan introduces injectable polio vaccine into its routine schedule”.
The project will incentivize provincial government capacity for rigorous monitoring and effective implementation of its program, including strengthened vaccine logistics, and deploying and expanding qualified technical and managerial personnel.
“Pakistan’s performance in maternal and child health remains weak and inadequate immunization coverage is a major challenge. Childhood immunization against vaccine preventable diseases can help in significant reductions in disability and death”, says Robert Oelrichs, World Bank Task Team Leader of the Project. “The project will establish linkages of the federal and provincial EPI cells with private sector health providers and health-related civil society organizations (CSOs) working in low coverage catchment areas – especially urban slums.”
Children under two years of age in Pakistan are the main beneficiaries of NISP – particularly children belonging to the poorest households in which immunization coverage is lowest. In addition, all children will benefit from strengthened polio and measles interventions.
The credit is financed by IDA, the World Bank’s fund for the poor, with a maturity of 25 years, including a grace period of 5 years.
By partnering with the World Bank in an innovative way, Rotary has successfully leveraged its funding for polio eradication, contributing to success towards one year without polio in Nigeria and in Africa. This post, the second in a series on partnerships, innovation, and evaluation, explains how the innovative polio buy-down mechanism has worked.
Last month, Africa achieved a key milestone towards polio eradication, with no case of polio observed for a full year. It will still take a few weeks for the World Health Organization to officially certify this milestone, and for the region to be declared polio-free, no polio cases should be observed for a period of three years. Still, tremendous progress towards polio eradication has been accomplished. Just a few years ago, hundreds of cases of polio were observed annually in Nigeria. The country achieved its first full year without polio on July 24, 2015. This will leave only Afghanistan and Pakistan on the list of polio-endemic countries.
As noted in a recent post on the World Bank health blog, achieving one year without polio in Nigeria required persistence and courage. In some areas, professionals and volunteers who led the polio campaigns risked their life: Boko Haram assassinated nine polio vaccinators two years ago in the north of the country. Vaccinators had to rely on “hit and run” tactics to reduce exposure to risk, vaccinating children quickly in the morning and leaving the area by the afternoon. (For an understanding of the role of a wide range of people at the heart of polio eradication (in the case of Afghanistan), see the great slide show provided by the Global Polio Eradication Initiative.)
The polio campaigns also required great effort and creativity from multiple agencies, including through an innovative buy-down mechanism implemented by the World Bank and funded by the Bill and Melinda Gates Foundation, as well as Rotary International and the U.S. Centers for Disease Control via the U.N. Foundation. (The Gates Foundation and Rotary International are the two largest donors worldwide towards polio eradication over the last 30 years.) Partnership with the government of Nigeria, the World Health Organization (WHO), and UNICEF, among others, was also crucial to the success of the campaigns.
How did the polio buy-down mechanism work? The basic idea was for the World Bank to fund polio eradication projects through concessional IDA (International Development Association) loans. In the case of Nigeria, two projects worth $285 million, including additional financing, were implemented over the last dozen years. The projects included clauses that allowed loans to Nigeria to become grants if the country achieved a high level of polio immunization coverage. In other words, if the immunization targets indicated in the loans were achieved and verified independently through in-depth audits, the government would receive grant funding for polio eradication without the need to repay the loans.
For the government of Nigeria, this was potentially a great deal. And for the Gates Foundation and the Rotary Foundation of Rotary International, this was also a pretty good investment. In general, investments towards polio eradication have been shown to be fairly cost-effective. But with the buy-down mechanism, these investments were especially cost-effective.
Due to the concessional nature of IDA loans (long-term zero or low-interest loans which grace repayment periods), for every dollar contributed to the buy-down, the actual amount of resources that could be transferred to the government for the polio campaigns was two times larger. The buy-down funds were transferred by the Gates Foundation and Rotary International (in the case of Rotary in partnership with the United Nations Foundation) to the World Bank at the start of the project, and used to repay the loan at the end of the project if the target immunization rates had been achieved.
Through this buy-down mechanism, the Gates Foundation and Rotary International were able to offset all future loan repayment obligations with a much smaller amount of funding to pay back IDA than the face value of the loans granted to Nigeria. Again, one dollar invested by these private donors generated about $2 for polio eradication in Nigeria, with a similar mechanism in place for Pakistan. The mechanism also had built-in incentives to encourage strong implementation performance by the government of Nigeria since the loans would be transformed into grants only if the specific immunization targets were to be achieved.
At the time of the first buy-down mechanism for polio, then-World Bank President James. D. Wolfensohn stated, “The partnership to buy-down loans to grants on the basis of good performance is an example of the innovative thinking occurring in the private sector and the World Bank about how to increase finances for the fight against global diseases. This financial innovation is bringing the goal of a polio-free world one large step closer to becoming reality.”
Could similar buy-down mechanisms be applied in other areas? That was probably the hope when this innovative mechanism was created for polio a dozen years ago. It seems however that with few exceptions the idea has not yet been replicated much in other development areas, even if it has been mentioned in a number of reports, including in a Results for Development report on education.
A number of conditions have to be met for this type of buy-down mechanism to be successful. But in the case of polio, it has been successful, enabling the Gates Foundations, individual Rotarian donors through the Rotary Foundation, the United Nations Foundation, and the World Bank to achieve higher impact towards polio eradication than would have been the case otherwise.
A brief on polio in Africa and the buy-down mechanism is available here.
This post is reproduced with minor changes from a post published by the author on September 2, 2015 on the World Bank’s Financing for Development blog at http://www.fin4dev.org/.
by Quentin Wodon
This second post in a series of three looks at how funding provided by The Rotary Foundation (TRF) is allocated. TRF disbursed $232 million in program expenses last year. More than half ($131 million) was allocated PolioPlus, with the rest allocated to Rotary grants ($92 million) and other programs ($ 8 million). This post briefly describes and discusses those investments.
TRF gave $131 million in 2013-14 for polio. While the report does not state explicitly where the funding came from, simple calculations suggest that two thirds may have come from the Bill and Melinda Gates Foundation (BMGF), with the rest provided by Rotarians. This is because from 2013 to 2018, for every dollar raised by Rotary for PolioPlus, BMGF provides a 2 to 1 match up to a maximum of $70 million per year, as shown in the Figure below. In addition, TRF’s annual report mentions a previous $20 million match by BMGF for polio on the revenue side. If the $90 million in revenues provided by BMGF for polio were allocated the same year to TRF program expenses (this is not stated explicitly in the report), then Rotarians would have contributed in 2013-14 about a third of total TRF program expenses for polio. If my assumption is erroneous, please let me know!
As mentioned in my first post for this blog, Polio used to be a devastating disease worldwide, affecting 30,000 children per year in the US alone in the mid-1950s. Thanks to vaccines and mass immunization, the number of polio cases has dropped to close to zero. This has been a great success built on public-private partnerships. While many governments have funded polio eradication campaigns, after the United States (with $2.2 billion in contributions and pledges) the two largest donors from 1985 to 2014 have been private foundations – BMGF ($1.9 billion) and Rotary International ($1.3 billion). Apart from financial donations, hundreds of thousands of volunteers – including many Rotarians – have participated in polio vaccination campaigns.
Today, it seems to me from informal conversations with fellow Rotarians that some wonder whether it still makes sense to spend that much money on a disease that now affects few children. Is this the best investment that TRF can make? This is a difficult question to answer, but there is evidence that at the very least, this is a good investment, simply because the cost of a spreading virus could be much higher than the cost of the polio eradication campaigns. A report prepared last year for BMGF suggests that previous investments of $9 billion since the creation in 1984 of the Global Polio Eradication Initiative (GPEI) may have generated $27 billion in net benefits out of $40-50 billion in potential benefits estimated by researchers in an economic analysis of GPEI. Investments in polio eradication campaigns do have higher initial costs than routine immunization, but they may also have greater long term payoffs.
At the same time, we need to be careful in what we promise. It is important to reach the last mile towards polio eradication, but this will not be easy. Vaccination remains difficult in conflict affected areas, and the risk of exportation of the virus from those areas to other countries is real. As the TRF report highlights, only three countries remain polio-endemic today (Pakistan, Afganisthan, and Nigeria). But reports documented polio outbreaks last year in Central Asia, the Middle East, and Central Africa, leading the World Health Organization to declare in May 2014 that the spread of the virus constituted an “extraordinary event”. In terms of costs and funding as well, there seem to be some challenges. In a February 2014 report, UNICEF and WHO estimated the price tag for polio eradication for the period 2013-18 at $5.5 billion. At the time, available and confirmed contributions amounted to $1.8 billion, so that there was a funding gap of $3.7 billion.
Rotary Grants and Other Programs
TRF’s annual report provides great stories of impact in other areas of interventions apart from polio, but relatively limited details on how funds are allocated by thematic area. The information provided focuses on the allocation of funds for global grants in each of six areas of focus of TRF apart from polio. A total of $47.3 million was disbursed for global grants in 2013-14. As shown in the Figure below, disease prevention and treatment received the largest allocation (265 grants for a total value of $14.2 million), followed by water and sanitation (198 grants and $11.2 million), economic and community development (148 grants and $7.8 million), basic education and literacy (121 grants and $6.5 million), maternal and child health (69 grants and $5.1 million), and finally peace and conflict prevention/resolution (67 grants and $2.7 million, excluding allocations to Rotary peace centers in a handful of universities).
Information is also available in the TRF annual report on which regions benefit from the largest amount of funding all programs combined. Sub-Saharan Africa came first, with $104 million in funding provided, followed by South Asia ($56 million), East Asia and the Pacific ($24 million), North America ($19 million), the Middle East and North Africa as well as Europe (each $9 million), Central America and the Caribbean ($6 million), Latin America ($5 million), and finally Russia, Georgia, and the Commonwealth of Independent States (less than $1 million).
That’s it for the basics of how TRF program expenses are allocated. While a majority of funds allocated by TRF go to polio, quite a bit of this investment comes from matching funds provided by BMGF, so that a large share of the funds donated by Rotarians or earned by the foundation from its assets go to other priority areas. In the last post in this series, I will discuss the foundation’s performance.