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Grand Bargain debate one year on: Cash aid

Silver bullet or emperor’s new clothes?

  • 23 May 17

Cash transfers for housing were part of a recent NRC / Start Fund crisis response in Afghanistan


Blog Post

Start Fund MEAL Manager, David Jones, discusses the rising demand for cash programming and how it has featured in Start Fund responses

There is something anomalous within the 10 elements of the Grand Bargain,  Whilst there are points of principle and approach ranging from funding to transparency, there is a specific delivery method noted also and it’s all about the money. It has been both lauded and criticised within the humanitarian sector and in the public domain. Having been prioritised by donors and NGOs alike for various reasons, what is next for cash transfer programmes?

The Grand Bargain speaks to the increasingly routine use of cash, investment in new delivery models, greater evidence, more collaboration and coordination and, fundamentally, more cash. So what is it about cash transfer programmes? Is cash the silver bullet or the emperor’s new clothes? The answer, unsurprisingly, is neither…and both. Cash, in its various guises, presents numerous opportunities, unknowns and challenges. From a study of Start Fund projects, we begin to shift the conversation from universal absolutes to understand the granularity in cash transfer programmes.

Firstly, the use of cash is already widespread. Despite concerns around having the time to conduct market analyses within the Start Fund’s 45 day window, we have seen 58 projects use it, representing 19 agencies across 25 countries and four continents. As has been found elsewhere, we also see that cash has a strong level of cost effectiveness and it is fast. On average, cash distributions reached affected populations seven days from the Start Fund award decision.

Cash can provide affected populations with agency and control, which is especially pertinent given the massive reduction in both within crises. Instead of being given what has been decided by others as most important, affected populations can choose their own priorities, relative to their specific individual, collective and changing needs. This flexibility has also been seen at project level, whereby unspent cash is quickly and easily redirected to alternate activities.

So far, so good. However, we must also be wary of seeing all cash as one currency. Unconditional cash transfers are clearly the most popular in Start Fund responses - representing the preferred methodology of 52 per cent of cash projects. Vouchers and conditional (cash-for-) methods are also popular. A deeper analysis demonstrates the ubiquitous importance of context. In some cases, unconditional cash represents a security risk. In others, vouchers provide opportunities for hard to reach populations to receive assistance in a more equitable fashion.

Cash-for-rent has even been used to ensure that affected populations need not leave their homes in the midst of oncoming severe weather. Cash-for-work has been used to build shelter and resilience measures for forthcoming crises. It is within its plurality that cash programming becomes a more vibrant and effective tool

Critically our analysis of cash transfer programmes within Start Fund responses teaches us three critical recommendations:

  1. Coordination is key: between agencies, local, national and international. Coordinated efforts ensure consistency over competition, whereby cash amounts, methods and geographies can be aligned to ensure the most efficient response
  2. Relationships matter: local private sector partners, such as banks and mobile money distributors, can support cash distribution with great efficiency. There is also a strong value for money argument to forging longer term agreements to reduce enhanced costs associated with scarcity and immediacy.
  3. Cash need not solely be associated with rapid response: it has demonstrated, through various modalities, an effective approach to resilience and anticipatory action. Cash-for-work activities have been used to support locally implement activities and enhance resilience. 

It is only analyses such as these that practitioners can uses to navigate between cash, the new hope, and cash, the false dawn. Nuanced understanding of the benefits and limitations, especially in relation to contextual factors, presents huge opportunity. To many, this should not be a revelation. Calls for more evidence and tools are valid, yet vague, and always run the risk of finding external sources to rely upon. 

So what tools are available? Consider the Cash Feasibility Index, a tool generated by a post-graduate team from the London School of Economics. It combines national-level data along three key factors: market infrastructure, societal factors and technological readiness. In doing so, the index can provide insights into the particular strengths and weaknesses of any country with regards to using cash programmes there, and immediately. Whilst it cannot immediately provide live granularity, it provides a depth of insight, rarely available within such short timeframes.

There are also the various resources provided by the Cash Learning Partnership, including tools to assess your own organisation’s readiness to implement cash programmes, and a forthcoming guide to monitoring cash programmes. The tools to support informed, fast and contextually relevant approaches are available, as is burgeoning experience and agency insights.

We begin to be reminded of the value in creating the space for innovation and collective resource: seeing a common, specific, goal being provided with pluralistic responses. However this only occurs when freedom to adapt is not just permitted, but reinforced. When equipped with context, evidence and tools, practitioners can enhance the effectiveness of cash so that it becomes, where appropriate, part of increasingly impactful crisis responses.

Whilst it is unreasonable to assume that cash is the silver bullet to so many operational, theoretical and even ethical concerns, it is a tool which maintains immense value. The value of cash, it seems, lies in the detail. There are numerous innovations and developments occurring across all levels of the humanitarian system. The shift from ‘why use to cash’ to ‘why not’ is incomplete.

We must create the space to innovate, understand and collectively refine. Most importantly, we must move from asking why, to asking how. How could cash be best used in this context? How could it be inappropriate, damaging even? How can we get the most from cash? Fundamentally we must ask: how do we refine our approaches to ensure that affected populations see the greatest value from money?

Cash need not be a silver bullet but we - as a sector – can make it a hugely effective tool for humanitarian response.

 

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