Global Fund Private Sector Partnerships: Resource Mobilization Overview

June 2006

• Resource mobilization for the Global Fund from the Private Sector has

been limited to date: $15 million in cash and non cash contributions were mobilized in 2005.

• However, efforts to date have been successful in testing and building a solid base of Private Sector partnerships which point to the tremendous

future potential: $500 – 700 million annually in additional revenue and reduced costs in the long term.

• Realizing the full potential value of these opportunities will require substantial resource investments, enabling policy changes and long lead times.

Summary

Context:

Opportunity:

Opportunity:

Opportunity

Private Sector Partnerships

Cash Contributions

Service/Product Contributions

Co-investments and Operational Contributions

Agenda

4

Strategy

Testa broad base

of partnerships

Focuson development ofpriority initiatives

Expandby leveraging

partnerships/successes

2002 - 2003 2004 - 2005 2006 and beyond

Cash Contributions

Product Contributions

OperationalContributions

Pro Bono Services

Opportunities

• Consumer marketing campaign by RED (AmEx, Converse, Gap, Giorgio Armani, Motorola)

• Consumer grass roots campaign by UNF

• Employee giving by Merck• Major gifts from Johnson &

Johnson

• Pro bono consulting services from McKinsey

• TB drug donation from Novartis (via GDF)

• Discounted pricing offer from GSK

• Co-investment by BHP Biliton

• Participation in CCMs by Standard Chartered Bank

Examples:

Cash Contributions

Product Contributions

OperationalContributions

Pro Bono Services

Long Term Potential

Increase Revenue

$200-300 million

Reduce costs

$300-400 million(products)

$10-25 million(services)

Improve implementation

Increased scaleand effectiveness

Context:

Opportunity:

Opportunity:

Opportunity

Private Sector Partnerships

Cash Contributions

Service/Product Contributions

Co-investments and Operational Contributions

Agenda

8

Opportunity

57%

3%

4%

36%

Consumer

Employee

Corporate

WealthyIndividuals

Private Giving Market Global Fund Opportunity

Consumer

Employee

Corporate

Wealthy Individuals

Total

Hi

Mid

Mid

Low

$150 - 250M

$10 - 25M

$10 - 25M

TBC

$200 – 300M

PriorityFull PotentialOpportunity

• Leverage

• Sustainability

• Additionality

Guiding Principles

10

(Product)RED

11

Global Fund

• A significant portion of partner profits on all RED products (e.g. 1% of spending on the American Express RED card, 50% of profit on Gap RED apparel) go to Global Fund-financed AIDS programs in Africa

How It Works

(Product)RED• Established brands pay a licensing fee to (Red), agree to

marketing requirements and stipulation that all RED products and services benefit the Global Fund

• RED partner brands develop and market unique Red products to consumers

Established consumer brands

12

Products

13

What It…

…Is …Is not

• A change in the way the Global Fund manages its grant portfolio

• An additional burden on recipients

• A short term effort

• Cannibalizing on fundraising efforts of other organizations

• A corporate effort that will significantly increase private sector contributions to the Global Fund

• A marketing effort that will significantly raise awareness of the Global Fund and its grantees among millions of consumers

• A sustainable, scaleable, additional business model for corporate engagement

14

How It Will Spread

• January 2006: Press conference at the World Economic Forum meeting in Davos featuring Bono, Bobby Shriver (CEO of RED, Chairman of DATA), Richard Feachem and Partner CEOs

• March 2006: Launch of the American Express RED credit card and Gap RED T shirts in the UK

• April 2006: Launch of the Converse (Nike) RED Mali-mud cloth shoe in the UK and online and the Emporio Armani RED sunglasses worldwide

• May 2006: Launch of Motorola RED in the UK

• Fall 2006: Launch of enhanced RED product collections from Gap, Converse and Armani, and expansion into the US.

HOPE SPREADS FASTER THAN AIDS

16

Key Elements

hope spreadsfaster than AIDS

PRMarketing• Web• TV/Cable• Print

• NGOs – grass roots advocacy

• Celebrities

Map

Community

ViralTools

AdProducts

WebProduct Distribution• Web• Retail• Postal Svc• Direct

(metered mail)

• Stamp / metered mail

• Product extensions

17

Stamps

18

Mapping the Spread of Hope

The spread of HOPE

get on the map

19

How it will Spread

• The campaign will be unveiled at the International AIDS Conference in Toronto in August, and launched to consumers in the US on World AIDS Day in December 2006.

• The launch offering will consist of:–customized stamps and metered mail made possible by

recently developed technology and postal regulations–state-of-the-art web-based mapping technology to

engage consumers in tracking the “spread” of hope

• The offering will then expand to include other channels and products

to promote a ubiquitous “spread of hope”.

Context:

Opportunity:

Opportunity:

Opportunity

Private Sector Partnerships

Cash Contributions

Service/Product Contributions

Co-investments and Operational Contributions

Agenda

21

Opportunity

59%

41%Non-Cash

Cash

Cash vs. Non-cashGiving Market

Global FundNon-cash Opportunity

Product

Service

Total

Hi

Mid

$300 - 400M

$10 - 25M

$300 – 425M

PriorityFull PotentialOpportunity

22

Current Activity

• Ad Hoc Committee formed with members of Finance and Audit Committee and Policy and Strategy Committee to explore opportunity

• Exploration will include:– Multi-stakeholder Consultations– Mapping of existing contributions and mechanisms– Assessment of potential opportunity and risk

• Recommendations to Board in 2007

Context:

Opportunity:

Opportunity:

Opportunity

Private Sector Partnerships

Cash Contributions

Service/Product Contributions

Co-investments and Operational Contributions

Agenda

24

Leveraging business

core-competencesand expertise

to support CCMs and grant recipients

Leveraging business

infrastructures, staff and

management skillsto support grant implementation

Opportunity

Co-InvestmentOperational

Contributions

25

Co-investment – Current Activity

• Mapping of de-facto co-investment/operation contributions and documenting best practices

• Identifying additional opportunities and facilitating their development

• Developing a common strategy with partners to coordinate better and scale up the co-investment approach and operational contributions

Cash Contributions

Product Contributions

OperationalContributions

Pro Bono Services

Long Term Potential

Increase Revenue

$200-300 million

Reduce costs

$300-400 million(products)

$10-25 million(services)

Improve implementation

Increased scaleand effectiveness