When the misuse of millions of dollars disbursed by the Global Fund to Fight Aids, Tuberculosis and Malaria in several countries became public in 2010, media stories denounced the misappropriation of taxpayers’ money. They concluded that such instances of fraud likely undermined the credibility of the fund, leading several donor countries to reassess their contributions.
GiveWell, the nonprofit that rates charities by assessing their impact, disagreed. What the media failed to appreciate, Co-Founder and Co-Executive Director Holden Karnofsky wrote, was that the fraud had been disclosed by the Global Fund itself, in a transparency effort of a scope rarely seen in the development industry.
“In our investigations of large charities, we’ve seen no evidence that donors are auditing them in a way that would force disclosure of lost funds,” he wrote. “We’ve also seen no evidence that these organizations have any way of even knowing when funds have been misused.”