Where Does This PATH Lead?

PATH, formerly the Program for Appropriate Technology in Health, is a high-profile, global health non-profit based in Seattle and a favored recipient of Gates Foundation funding, receiving more than $1 billion from the foundation since 1998 (McCoy et al. 2009).  The organization undoubtedly has done and is doing good work, but my business reflex is to look at organizations as a potential investor might:  what’s the mission, is it being met, and will my investment yield the return I want.  From that perspective, PATH comes up short.

I usually start with an organization’s mission statement.  For PATH it is  “to improve the health of people around the world by advancing technologies, strengthening systems, and encouraging healthy behaviors (PATH FAQ).”  So I know I need to measure their success by the extent to which they are improving health, however measured.  I red-flag the three-mode approach; technology development, health care delivery infrastructure development, and behavior modification seem too disparate in methods and resources to be accomplished successfully under one organization.  Next I try to check their organizational structure; is it integrated across their mission so use their resources efficiently or are there vertical silos focused on different objectives?   No org chart is given; there is an executive team, a “shared services” team (essentially operations support), and “Program Leaders,” nineteen managers with either programmatic or country responsibilities (Prgm Leaders), forming a matrix that is either horizontal and vertical silos or a harmonious whole.  Another red flag.

What is PATH doing to accomplish its mission?  There is a clear statement about one thing PAH does not do:  it does not grant funds to other programs or nonprofits (FAQ), so if you’re looking for funding for your pet project, look elsewhere.  The list of projects on the PATH website (Projects) is impressive and extensive, 83 by my count, covering a wide range of topics in global health, everything from a song contest to increase AIDS awareness (Kenya) to the development of a malaria vaccine (Malaria Vaccine Initiative).  How does PATH accomplish such a wide range of work, requiring many different skills?  Apparently by “partnering” with other organizations, but since there are many ways to partner and, since PATH it does not give grants, I assume that PATH has contractual relationships with its partners.  Contracting can be a very efficient way part of a business:  a needed product or service is delivered at a known price by a contractee selected through a competitive bidding process.  The contractor needs to be good at writing contract specifications and then managing the contract post award.  So I look for PATH’s RFP (request for proposals) process; but the website has only one relevant page and only one project for bid (RFP).  So I guess that the 83 current projects resulted from a robust RFP process in the past; alternatively the partners/contractees/grantees were selected through subjective criteria (cronyism), another red flag.

My next stop is the PATH 2008 Annual Report to find out how PATH is reporting on its progress.  The majority of the Report is composed of descriptions of projects and the people involved- a good approach for communicating PATH’s work- but specific outcomes are few and far between.  I found three quantitations of the results of PATH’s projects in 2008:

– Nearly 9,000 girls were vaccinated with an HPV vaccine in Peru (HPV Vaccine);

– In Kenya, PATH and partners extended HIV counseling and testing to 146,000 individuals, reached more than 100,000 pregnant women with services to prevent transmitting HIV to their children, trained more than 500 health workers to counsel and test HIV patients, offered support groups to 45,000 adults and children living with HIV/AIDS, and provided financial, educational, and health assistance to 35,000 children orphaned or left vulnerable by HIV (Kenyan Health); and

– PATH and the Chengdu Institute built a Japanese encephalitis vaccine manufacturing facility which exported more than 31 million doses (JE Vaccine).

This is great progress, but the organization’s documentation and measurement of how it is fulfilling its mission is less than I expect.   Clearly, PATH is good at writing about its projects (there are hundreds of publications listed on its website, Pubs), but which of these report a measurable improvement in health is not clear.  Perhaps the enterprise is too successful and too wide-ranging to be able to consolidate and report its progress.  But I would expect that an organization funded at nearly $200 million annually would want have a better idea of how it is doing and share it with the public.

My last stop is the financial statement (in the Report and at Finances), which I read an amateur, trying to  get a rough idea of the relation between the input and output.  2008 input (described as revenue) was $187 million, mostly from contracts (obligated) and grants (unobligated) from foundations, corporations, US government, and NGOs (it’s not clear how these are apportioned).  Output (expenses) was 86% of the total in “program services” (funding for the projects) of which I deduce $80 million went to outside organizations (“sub-agreement” and “sub-contracts” line items) and $82 million went to internal project funding (it is not clear what proportion of the internal project funding went to managing the sub-contractees).  The good news is that their overall overhead (their “Support Services” category) is low:  about 12% of total expenses.  I’d appreciate a better description of the sources of their funds, how much is being passed through to other organizations, and what it costs to manage that pass-through.

My conclusion (acknowledging my less-than-thorough review):  PATH is well-funded and has improved health for some (e.g., those receiving vaccines and HIV counseling in 2008), but as a current investor (through my Federal taxes), I question whether their business model is sound and if they are delivering on their mission.  As a potential investor (there are three requests for donations on the PATH home page), I’ll go elsewhere.


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