Bill Gates' Indian Education

Elizabeth Flock, 07.15.09, 06:00 PM EDT
Forbes Magazine dated August 03, 2009
His $258 million Avahan project on AIDS in India got lost between B-school and brothel.

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On a humid afternoon former prostitute Fathima welcomes a group of illiterate women still in the trade and needing protection from AIDS into the Mukta clinic in Pune, India. As a "peer educator," she has the job of conveying to them the message of safety. But the visitors shuffle tentatively amid the expensive-looking English-language posters that paper the walls around them.

Why would a clinic serving illiterate, non-English-speaking visitors use more English than Indian languages?

The answer lies in where that money comes from. The Pune clinic is part of a network of 100-plus nonprofits working under the umbrella of Avahan, an AIDS-prevention effort. Avahan, or "Call to Action," is the brainchild of the world's most generous philanthropist, Bill Gates.

Gates announced the ten-year, $100 million Avahan during his much-publicized visit to the country in 2002. This was, and still is, the largest-ever initiative in India for the Bill & Melinda Gates Foundation.
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AIDS in India has become an epidemic after nearly two decades of piecemeal efforts to counter it. Millions of poor people have been exposed to the virus; government agencies and private groups didn't have the money to preach safety or treat the infected. Gates showed his seriousness by later raising the Avahan outlay to $258 million.

Seven years after Gates' visit, Fathima (we've changed her name) has counseled the women at the Pune clinic, given them condoms and sent them back home. It is time to worry about the future. The bad news is that Avahan is ready to pack and go soon from the Pune clinic, and Fathima is set to lose her income. (In March Avahan began handing over the reins to the government-run National AIDS Control Organisation, which is unenthusiastic about inheriting the venture.) She doesn't want to slip back into prostitution. At age 45 she doesn't have much of a career in that, anyway.

When it hit the ground in 2003, Avahan set itself three goals: arrest the spread of the human immunodeficiency virus in India, expand the program across the nation and develop a model that the government can adopt. Now, as it begins to wind down, Avahan finds that it hasn't achieved any of these goals. Doubtless the effort has made a dent in the problem, but the impact is small in relation to the spending. When NACO takes over, it will try to prune the costs of the program. Salaries for peer educators will go.

When the Gates Foundation got down to work in India, Avahan was ready to spend what it took to get the best bosses; it started its search at McKinsey, the consulting powerhouse. The recruiters zeroed in on Ashok Alexander, now 55, who had spent 17 years turning Indian businesses into global challengers. "They made me an offer I couldn't refuse," Alexander recalls, sitting at his plush office in New Delhi. "I liked the ambitious arch of the HIV/AIDS program, and it was a chance for me to do something new."

Soon 15 people were hired. Ten of them had come from private-sector backgrounds. They tackled the virus much as they would a problem at McKinsey. Alexander's office is papered with data and maps containing colored dots plotting the spread of the disease across the country. The argot is sheer B-school: Avahan is a "venture," the prevention program a "franchise," a prostitute a "consumer."

At Avahan Alexander and his colleagues oversaw the work of more than 100 other groups. The lack of practical experience at the top manifested itself in different ways. When Avahan introduced sleek mobile vans to bring clinics directly to the brothels, the expensive-looking vehicles were sometimes met with intense suspicion. At the Mukta clinic, Dr. Laxmi Mali says the women initially thought the van was from the police or the government. They refused help.

Accounts of the early missteps are largely anecdotal. But in 2005 an internal evaluation showed a big portion of Avahan's efforts had gone to waste. As many as 31,000 people had been contacted by Avahan's outreach program, but only 11,000 had visited the clinics. The Avahan executives had assumed that the peer educators would already know what the prevention services were without explanation; the reality was that they didn't.

Avahan's craving for scale also meant it overshot by a lot. It started with a bang in six states, with 50 sites for truckers in the south. But by mid-2005 only 12% of truck drivers were even aware of its services, and only 7% took advantage of them. This forced Avahan to reduce the sites to 20. For similar reasons Avahan's 6,000 centers for treating sexually transmitted diseases were reduced to 800.

At the core of Avahan's failure to make a serious difference in India's fight against AIDS is the way it spent money. In a country where a branded condom sells for 10 cents, where did Avahan's money go? It's difficult to say because Avahan's finances are largely opaque. Avahan's outlets sell 5 million condoms a month and give away another 10 million. Asked how so much could be spent on condoms, Alexander laughs, saying, "It's a bit more complicated than that." Probed further, Alexander says he doesn't know the financials offhand. Nor was he able to give them later.

Travel was one drain. Jonty Rajagopalan, Avahan program officer from 2006 to 2008, says she would take flights every month from her base in Hyderabad to her focus areas in the states of Andhra Pradesh and Tamil Nadu, instead of being based in a focus area.

Another chunk: salaries. Alexander's compensation was $424,900 in 2007, the second highest in the foundation globally, not including presidents and operating officers. Avahan's "targeting intervention officers," who oversee the field work, are paid three or four times what a typical NACO officer is paid.

Avahan's marketing was done in style. Eldred Tellis, head of Sankalp, a Mumbai group fighting AIDS that has worked with Avahan, says he has seen a lot of money go into fancy publications reporting the program's work. Very little went to the people on the ground. Vijay Mahajan, the chairman of Basix, a microfinance institution, comments on Avahan: "There is too much money and too many really smart people, with too little coming out."

Knowing that it would have to inherit the project, NACO sent out evaluation teams to sites in four states to get some clarity on costs. NACO's head, Sujatha Rao, says the evaluation threw up one clear message: Large parts of the program are not sustainable by NACO. "We told them you can't create a huge number of assets and then just leave and expect the government to take over everything," says Rao.

But Alexander disagrees. "We are not perpetual funders. We try to be catalytic," he says. "In five years we would hope the HIV/AIDS epidemic is contained enough that we will no longer have to be involved." Either way, it will have to be: Avahan is now repositioning, focusing on maternal and newborn health.

Ashok Row Kavi, consultant for Unaids and chairman of the Humsafar Trust for gay and transgender health, says Avahan's expectations were unrealistic. "They wanted HIV to disappear in five years. For that to happen a lot of people would have to die."

NACO's annual budget is $225 million, none of it currently spent on Avahan. Rao can't find enough money to continue the project. "We can never offer a replicable model. And if we are unable to sustain the program, all of their effort will be for naught," she says.

When probed about the difficulties of handing over the program to the government, Alexander says the transfer is going just fine. Kavi differs; he says that the transfer discussions between NACO and the Gates Foundation are stymied. Costs need to be brought down, but they can't figure out how. He also fears Avahan's now experienced M.B.A.-degreed field monitors, facing shrinking salaries, will depart. The question of running air-conditioned clinics the way Avahan did doesn't even arise.

The biggest hole in quality will appear where it can hurt most. Hussain Makandar, HIV counselor at the Mukta clinic, is worried about condoms: The ones from Avahan are lubricated; the ones from NACO break and the prostitutes stop using them.

Alexander insists that only a tenth of the project will transfer to the government this year, and the rest will happen slowly over the next five. "We're doing a transition program. We're not saying, 'Oh, here's the program, and we're off.'" But NACO and Mukta officials, among others, are watching the calendar, confused.

Adapted from FORBES INDIA, a licensee of Forbes Media.