Doing cash differently: how cash transfers can transform humanitarian aid

High Level Panel on Humanitarian Cash Transfers
2015

Summary

The nature of humanitarian crises is changing. More people are in need and for longer. This report shows why giving aid directly in the form of cash is often a highly effective way to reduce suffering and to make limited humanitarian aid budgets go further. The report calls for shifts in how cash transfers are taken forward in order to take advantage of their full potential and highlights their transformative potential if used at scale.

The High Level Panel on Humanitarian Cash Transfers reviewed evidence, consulted over 200 people working in the humanitarian, development, academic and private sectors through roundtables, interviews and written submissions. It asked two fundamental questions: what do cash transfers mean for humanitarian action?; and for affected people, what opportunities does cash present for doing aid better?

Key findings:

  • Moving to a coordinated system of cash transfers is an opportunity for broader reform of the humanitarian system, so that aid providers of the future can work in a more complementary way to maximise their impact.
  • Cash transfers can help close the gap between needs and funding, providing opportunities to do humanitarian assistance better. It usually costs less to get cash transfers to people than in-kind assistance because aid agencies do not need to transport and store relief goods.
  • Giving people cash is not always the best option. Sometimes markets are too weak or supply cannot respond, or it could lead to inflation. Sometimes government policies make it impossible to provide cash. But these situations are rare and often temporary.
  • Cash transfers should also be complemented by the provision of public goods that markets will not provide efficiently, such as protection, sanitation or immunisation.

Recommendations:

  • Give more unconditional cash transfers. The questions should always be: ‘why not cash?’ and ‘if not now, when?’
  • Invest in readiness for cash transfers in contingency planning and preparedness.
  • Measure how much aid is provided as cash transfers and explicitly distinguish this from vouchers and in-kind aid; systematically analyse and benchmark other humanitarian responses against cash transfers; and leverage cash transfers to link humanitarian assistance to longer-term development and social protection systems
  • Capitalise on the private sector’s expertise in delivering payments; where possible, deliver cash digitally and in a manner that furthers financial inclusion
  • Improve aid agencies’ data security, privacy systems and compliance with financial regulations;
  • Improve coordination of cash transfers within the existing system
  • Implement cash programmes that are large-scale, coherent and unconditional, allowing for economies of scale, competition and avoiding duplication.
  • Wherever possible, make humanitarian cash transfers central to humanitarian crisis response as a primary component of Strategic Response Plans, complemented by in-kind assistance if necessary.
  • Finance the delivery of humanitarian cash transfers separately from assessment, targeting and monitoring.

Source

High Level Panel on Humanitarian Cash Transfers. (2015). Doing cash differently: how cash transfers can transform humanitarian aid. London: ODI / CGD.