GFO Issue 462, Article Number: 6
ABSTRACT
This article discusses the 7 May 2025 retreat of the Global Fund Board in Geneva, convened in response to a significant funding gap, largely the result of diminished United States support. More than 200 currently active grants in Grant Cycle 7 are being reprogrammed, with cuts targeted at unspent funds to shield high-need countries. Complaints have also been voiced over the lack of transparency and community participation in decision making. As the organization begins to plan for Grant Cycle 8, a resounding need is for streamlined, more equitable processes that maintain equity, safeguard critical services, and serve the most vulnerable.
On 7 May 2025, the Global Fund Board held a retreat in Geneva due to a threatening funding crisis. A significant reduction in donor funding - particularly from the United States—has prompted the Fund to revise more than 200 continuing grants as part of Grant Cycle 7 (GC7). Meanwhile, early planning for the next cycle, Grant Cycle 8 (GC8), is underway. It will require a more focused and flexible approach to adapt to the new financial reality.
The Global Fund partnership is navigating an extraordinary period marked by acute financial stress and shifting donor dynamics. Stakeholders across the spectrum - governments, non-governmental organizations, technical partners, and affected communities - have acknowledged the severity of the situation and expressed solidarity with countries grappling with the consequences. While funding uncertainties loom large, there is also widespread recognition of the resilience demonstrated by implementing countries and partners on the ground.
Major changes to GC7 grants
Because of lower-than-expected donor funding, the Global Fund must reduce what it gives to countries mid-way through the grant cycle. In the meeting, the Secretariat presented four possible options to the Board:
- They proposed that the Allocation Model be run with a reduced total budget. That would include running the allocation funding model again but with less money. But with many countries already at least partway through implementing their grants, such an approach could lead to sudden, massive funding cuts that would be hard to absorb or implement effectively.
- They proposed to reduce countries’ allocation by the same percentage. This method is simple, treating all countries equally, but it doesn’t account for how much money countries have already spent. Countries that have used a larger portion of the money already would be hit harder.
- They provided flexibility to move resources according to current program priorities. That would require reallocating funds in such a way that is more closely aligned with the current most pressing demands, such as changes in the burden of disease or changes in the availability of other resources. Although more targeted, this possibility is likely to be cumbersome and may slow down existing programs as priorities are reviewed and changed mid-cycle.
- They finally proposed cutting only those funds that have not yet been spent or committed. That would enable countries to reprogram unused resources, based on shifting needs, and provide a more flexible and less destructive approach to dealing with mid-cycle cuts. It's seen to be a 'fairer' mechanism since it protects existing investments and mitigates the effect on existing program delivery.
Of the four options, the Board adopted a fairer approach: reducing only unspent funds and protecting countries that have already used most of their grants. These decisions take into account each country’s situation - such as how dependent they are on U.S. funding, whether they’re in conflict, and their disease burden. Uniform cuts would have hurt the countries in the toughest situations the most.
A new Deallocation Model has been developed to address a one-time reduction in funding received. A two-step process lies at the core of the model:
Proportional cuts
The model initially protects money that has already been spent by grant recipients. It then proportionally reduces the unspent and uncommitted GC7 funds on a grant-by-grant basis, using the following formular:
Qualitative adjustments
After the new base allocation amounts are calculated, it will then be qualitatively adjusted with close attention to the situation of each country and grant. The qualitative adjustments will consider the programmatic context, country-specific circumstances, grant-level dynamics, and other financial levers and flexibility within grants.
Countries are being told to prioritize critical services - like treatment, prevention, testing, and outreach work. They should look at all available resources, including domestic and bilateral funding, to keep health services running smoothly. Defining what’s "essential" must go beyond just simply procuring medicines. It must include access, community outreach, and reaching vulnerable groups. For example, the Secretariat indicated that cuts to malaria prevention could lead to a 43–98% increase in deaths.
The Global Fund will use a mix of centralized guidance and country-led planning to make these changes quickly and effectively. Country Coordinating Mechanisms (CCMs) must approve all adjustments, and local communities must be involved. The Technical Review Panel will help facilitate and expedite review of significant changes. Transparency is key. The Global Fund Secretariat will provide regular updates and make rapid adjustments if necessary to address problems or unfair impacts.
But the clock is ticking, with a deadline for the negotiations in September. This creates pressure on already overburdened teams on the ground in countries. The Global Fund is working to make the process as adaptable as possible so as not to overwhelm them. Technical partners are providing extra support to countries that have less capacity, including tools and recommendations on how to ensure tough decisions on funding do not damage health services.
Preparing for Grant Cycle 8
As changes are made to the current grants, the Fund is also preparing for GC8. The new cycle will be shaped by past lessons, evolving global health needs, and a return to equity, inclusion and human rights. There is strong support for streamlining the application process, particularly in countries with fewer resources. The goal is to reduce administrative burdens that detract from service delivery - while still ensuring that core goals, such as gender equality and inclusion, are being met.
GC8 planning has also focused on sustainable transitions. When countries transition from Global Fund support, they must do so with prudence, to preserve the gains made against HIV, TB, and malaria and to ensure the prevention of adverse effects to vulnerable populations. The priority should be funding countries with the highest need. There’s also increasing interest in funding community-based organizations directly, acknowledging the importance of these groups in reaching underserved populations and making sure the money is being used wisely. The Secretariat promised regular updates and establishing systems to correct course quickly when things go wrong - helping to earn trust and ensure that all voices are heard.
The Secretariat is watching out for possible risks—like disease resurgence if prevention services are cut, or overly complex processes that distract from actual service delivery. The focus must stay on results, not red tape. And any financial cuts must be fair and not hurt countries facing the toughest challenges.
Stakeholders warning: Don’t sacrifice equity and community in Mid-Cycle GC7 cuts
Strong concerns have been expressed by stakeholders that opaque cuts, without being open to public scrutiny or being developed in consultation with the national leadership, may risk rolling back decades of progress. Though they’re not against tough decisions, stakeholders said those decisions must be made in the right way. Many believe the process has become overly top-down, with national governments, communities and civil society left out, putting the Global Fund’s principles of country ownership and shared responsibility at risk.
Stakeholders said that reallocation decisions must be made nationally, and that both by guarding against tyranny of the majority and by providing the necessary technical leadership, such leadership must be political in nature. Health and finance ministries, CCMs and affected communities should be central in determining which interventions can be scaled down and how to safeguard those most at risk. Without that involvement, there is a real danger of reducing services for people who can least afford a disruption.
The stakeholders also emphasized that reprioritization needs to be led by equity, sustainability and evidence. A country should not face punishment for circumstances beyond its control such as global economic shocks, pandemics, or political volatility. There is need for country-specific strategies, not broad cuts that would hit the least resourced programs the hardest.
One concern is that community-based interventions are often the first to be cut. But these programs - which are often managed by affected individuals themselves - are essential for reaching the most marginalized groups and ensuring people stay on treatment. Taking them away will make it harder for health systems to effectively care for patients. Experts caution against funding commodities - such as medicines and diagnostics - separately from the systems to deliver them. A product is no good if it doesn’t make it to the patient because the infrastructure is not strong enough or the community is not engaged. “Life-saving” can only mean both the product and the system that guarantees access.
In operational terms, when there is delayed decision making - by the Secretariat or the Board - the greater the risk of service disruption, stock-outs and treatment discontinuations. To avoid this, clear transparent and time-bound decision making with accountabilities should be in place to guarantee an amended GC7 is implemented promptly and effectively.
Key recommendations from stakeholders:
- Ensure real community participation.
- Protect community-led services and enablers of access.
- Keep support for gender and human rights programming.
- Maintain community monitoring efforts for accountability.
- Apply flexible, tailored approaches based on each country’s needs.
What comes through across all input is a common conviction: the Global Fund is at a crossroads. It’s not if GC7 will succeed or fail - but whether the institution is still true to its founding vision. Better budgeting and organization are required - but not by sacrificing the marginalized communities the Fund was designed to support.
Amid this crisis, there is also an opportunity - to re-dedicate to the Fund’s values, to reengage with its purpose, and to emerge as a stronger, more transparent organization - one that is more deeply grounded in the principles of equity, inclusivity, and partnership.
Conclusion
The Global Fund now faces one of the most consequential moments in its history. Confronted by an urgent financial crisis and the imperative to adapt, the partnership is responding with pragmatism, agility, and solidarity. The reprioritization of GC7 and the planning of GC8 are not merely exercises in budgeting—they are critical acts of stewardship aimed at protecting the lives of the world’s most vulnerable people.
At the heart of this response lies a renewed commitment to the values that have defined the Global Fund for over two decades: equity, transparency, inclusivity, and partnership. While the path ahead will be challenging, the shared resolve to protect life-saving services and maximize impact remains unwavering.
On 7 May 2025, the Global Fund Board held a retreat in Geneva due to a threatening funding crisis. A significant reduction in donor funding - particularly from the United States—has prompted the Fund to revise more than 200 continuing grants as part of Grant Cycle 7 (GC7). Meanwhile, early planning for the next cycle, Grant Cycle 8 (GC8), is underway. It will require a more focused and flexible approach to adapt to the new financial reality.
The Global Fund partnership is navigating an extraordinary period marked by acute financial stress and shifting donor dynamics. Stakeholders across the spectrum - governments, non-governmental organizations, technical partners, and affected communities - have acknowledged the severity of the situation and expressed solidarity with countries grappling with the consequences. While funding uncertainties loom large, there is also widespread recognition of the resilience demonstrated by implementing countries and partners on the ground.
Major changes to GC7 grants
Because of lower-than-expected donor funding, the Global Fund must reduce what it gives to countries mid-way through the grant cycle. In the meeting, the Secretariat presented four possible options to the Board:
- They proposed that the Allocation Model be run with a reduced total budget. That would include running the allocation funding model again but with less money. But with many countries already at least partway through implementing their grants, such an approach could lead to sudden, massive funding cuts that would be hard to absorb or implement effectively.
- They proposed to reduce countries’ allocation by the same percentage. This method is simple, treating all countries equally, but it doesn’t account for how much money countries have already spent. Countries that have used a larger portion of the money already would be hit harder.
- They provided flexibility to move resources according to current program priorities. That would require reallocating funds in such a way that is more closely aligned with the current most pressing demands, such as changes in the burden of disease or changes in the availability of other resources. Although more targeted, this possibility is likely to be cumbersome and may slow down existing programs as priorities are reviewed and changed mid-cycle.
- They finally proposed cutting only those funds that have not yet been spent or committed. That would enable countries to reprogram unused resources, based on shifting needs, and provide a more flexible and less destructive approach to dealing with mid-cycle cuts. It's seen to be a 'fairer' mechanism since it protects existing investments and mitigates the effect on existing program delivery.
Of the four options, the Board adopted a fairer approach: reducing only unspent funds and protecting countries that have already used most of their grants. These decisions take into account each country’s situation - such as how dependent they are on U.S. funding, whether they’re in conflict, and their disease burden. Uniform cuts would have hurt the countries in the toughest situations the most.
A new Deallocation Model has been developed to address a one-time reduction in funding received. A two-step process lies at the core of the model:
Proportional cuts
The model initially protects money that has already been spent by grant recipients. It then proportionally reduces the unspent and uncommitted GC7 funds on a grant-by-grant basis, using the following formular:
Qualitative adjustments
After the new base allocation amounts are calculated, it will then be qualitatively adjusted with close attention to the situation of each country and grant. The qualitative adjustments will consider the programmatic context, country-specific circumstances, grant-level dynamics, and other financial levers and flexibility within grants.
Countries are being told to prioritize critical services - like treatment, prevention, testing, and outreach work. They should look at all available resources, including domestic and bilateral funding, to keep health services running smoothly. Defining what’s "essential" must go beyond just simply procuring medicines. It must include access, community outreach, and reaching vulnerable groups. For example, the Secretariat indicated that cuts to malaria prevention could lead to a 43–98% increase in deaths.
The Global Fund will use a mix of centralized guidance and country-led planning to make these changes quickly and effectively. Country Coordinating Mechanisms (CCMs) must approve all adjustments, and local communities must be involved. The Technical Review Panel will help facilitate and expedite review of significant changes. Transparency is key. The Global Fund Secretariat will provide regular updates and make rapid adjustments if necessary to address problems or unfair impacts.
But the clock is ticking, with a deadline for the negotiations in September. This creates pressure on already overburdened teams on the ground in countries. The Global Fund is working to make the process as adaptable as possible so as not to overwhelm them. Technical partners are providing extra support to countries that have less capacity, including tools and recommendations on how to ensure tough decisions on funding do not damage health services.
Preparing for Grant Cycle 8
As changes are made to the current grants, the Fund is also preparing for GC8. The new cycle will be shaped by past lessons, evolving global health needs, and a return to equity, inclusion and human rights. There is strong support for streamlining the application process, particularly in countries with fewer resources. The goal is to reduce administrative burdens that detract from service delivery - while still ensuring that core goals, such as gender equality and inclusion, are being met.
GC8 planning has also focused on sustainable transitions. When countries transition from Global Fund support, they must do so with prudence, to preserve the gains made against HIV, TB, and malaria and to ensure the prevention of adverse effects to vulnerable populations. The priority should be funding countries with the highest need. There’s also increasing interest in funding community-based organizations directly, acknowledging the importance of these groups in reaching underserved populations and making sure the money is being used wisely. The Secretariat promised regular updates and establishing systems to correct course quickly when things go wrong - helping to earn trust and ensure that all voices are heard.
The Secretariat is watching out for possible risks—like disease resurgence if prevention services are cut, or overly complex processes that distract from actual service delivery. The focus must stay on results, not red tape. And any financial cuts must be fair and not hurt countries facing the toughest challenges.
Stakeholders warning: Don’t sacrifice equity and community in Mid-Cycle GC7 cuts
Strong concerns have been expressed by stakeholders that opaque cuts, without being open to public scrutiny or being developed in consultation with the national leadership, may risk rolling back decades of progress. Though they’re not against tough decisions, stakeholders said those decisions must be made in the right way. Many believe the process has become overly top-down, with national governments, communities and civil society left out, putting the Global Fund’s principles of country ownership and shared responsibility at risk.
Stakeholders said that reallocation decisions must be made nationally, and that both by guarding against tyranny of the majority and by providing the necessary technical leadership, such leadership must be political in nature. Health and finance ministries, CCMs and affected communities should be central in determining which interventions can be scaled down and how to safeguard those most at risk. Without that involvement, there is a real danger of reducing services for people who can least afford a disruption.
The stakeholders also emphasized that reprioritization needs to be led by equity, sustainability and evidence. A country should not face punishment for circumstances beyond its control such as global economic shocks, pandemics, or political volatility. There is need for country-specific strategies, not broad cuts that would hit the least resourced programs the hardest.
One concern is that community-based interventions are often the first to be cut. But these programs - which are often managed by affected individuals themselves - are essential for reaching the most marginalized groups and ensuring people stay on treatment. Taking them away will make it harder for health systems to effectively care for patients. Experts caution against funding commodities - such as medicines and diagnostics - separately from the systems to deliver them. A product is no good if it doesn’t make it to the patient because the infrastructure is not strong enough or the community is not engaged. “Life-saving” can only mean both the product and the system that guarantees access.
In operational terms, when there is delayed decision making - by the Secretariat or the Board - the greater the risk of service disruption, stock-outs and treatment discontinuations. To avoid this, clear transparent and time-bound decision making with accountabilities should be in place to guarantee an amended GC7 is implemented promptly and effectively.
Key recommendations from stakeholders:
- Ensure real community participation.
- Protect community-led services and enablers of access.
- Keep support for gender and human rights programming.
- Maintain community monitoring efforts for accountability.
- Apply flexible, tailored approaches based on each country’s needs.
What comes through across all input is a common conviction: the Global Fund is at a crossroads. It’s not if GC7 will succeed or fail - but whether the institution is still true to its founding vision. Better budgeting and organization are required - but not by sacrificing the marginalized communities the Fund was designed to support.
Amid this crisis, there is also an opportunity - to re-dedicate to the Fund’s values, to reengage with its purpose, and to emerge as a stronger, more transparent organization - one that is more deeply grounded in the principles of equity, inclusivity, and partnership.
Conclusion
The Global Fund now faces one of the most consequential moments in its history. Confronted by an urgent financial crisis and the imperative to adapt, the partnership is responding with pragmatism, agility, and solidarity. The reprioritization of GC7 and the planning of GC8 are not merely exercises in budgeting—they are critical acts of stewardship aimed at protecting the lives of the world’s most vulnerable people.
At the heart of this response lies a renewed commitment to the values that have defined the Global Fund for over two decades: equity, transparency, inclusivity, and partnership. While the path ahead will be challenging, the shared resolve to protect life-saving services and maximize impact remains unwavering.
