Submitted by Causecast Admin on February 4, 2011

From Advertising Age:

The Global Fund to Fight AIDS, Malaria and Tuberculosis in Africa is under fire after revealing "grave misuse of funds" in four countries where it operates. The fund released its report last year, but an Associated Press story brought renewed attention to the situation last week, revealing the Global Fund is demanding the recovery of $34 million in grants out of $13 billion.

From The Washington Post:

The fund's newly reinforced inspector general's office, which uncovered the corruption, can't give an overall accounting because it has examined only a tiny fraction of the $10 billion that the fund has spent since its creation in 2002. But the levels of corruption in the grants they have audited so far are astonishing.

A full 67 percent of money spent on an anti-AIDS program in Mauritania was misspent, the investigators told the fund's board of directors. So did 36 percent of the money spent on a program in Mali to fight tuberculosis and malaria, and 30 percent of grants to Djibouti.

Advertising Age reports on what cause marketers need to learn from the Global Fund's issues with corruption:

1.  Lead with transparency: Although Red issued a statement applauding the Global Fund for openly addressing the situation, Red's transparency to its own supporters has been somewhat less effusive. Co-founder Bobby Shriver simply stated, "No Red money whatsoever" was implicated in the corruption. Although misused funds may only be a fraction of the money the Global Fund has invested, $34 million is still staggering for the average consumer buying a $30 T-shirt or a $149 iPod. Consumers need more assurance their dollars are safe, particularly in the face of transparency questions, which can leave consumers confused about how their purchases were benefiting the cause. Now is the time for Red and its brands to be overly transparent.

2.  Implement stricter standards: It may in fact be a "naïve, impossible standard," as Shriver states, to expect corruption is not taking place within international giving and financial institutions; however, as companies align their trusted brands with such initiatives and appeal to the compassion of their consumers to take personal action, they must also ensure proper standards are in place at the onset and results are accessible. No one entity can solve the challenges of international grant making; but, if companies are going to enlist consumers in their efforts, they need to be a part of the solution alongside NGOs, foundations and government agencies.

For More Lessons Regarding Accountability, Visit AdvertisingAge.com For The Entire Story

Cause Integration's Perspective:

The large amounts of corruption revealed in the Global Fund leave numerous lessons for cause marketers to take away and ensure that their cause marketing campaigns support charities whereby the funds raised are allocated appropriately.  Companies have to do their due diligence with charities they support to ensure that the money they raise, once transfered, actually delivers the social good promised.  Many have hailed the rising importance of metrics in the world of social good and sustainability, and this crisis for the Global Fund resolidifies the importance of establishing systems of metrics for measuring the good accomplished from a cause marketing campaign.  Not only does it ensure that you can report to your constituencies on the change you helped to create, it also ensures that the organizations you work with don't fall into corrupt patterns.