Opinion: Scaling cash transfers effectively is possible. Here’s a 7-step guide.

A beneficiary signs for their money at a cash distribution program in Kazla, Bangladesh. Photo by: Olaf Neussner / German Red Cross / CC BY-NC

For the humanitarian sector to fully optimize the efficiency and flexibility of cash-based programming, and to ensure a smooth transition from more traditional aid provision, actors including NGOs, United Nations agencies and donors should be planning ahead to ensure the necessary robust infrastructure and systems are in place. If we don’t, we risk missing myriad opportunities to help people rebuild their lives in fragile settings, where cash is proven to help much more effectively than other forms of assistance.

Webinar: Cash transfers for crisis response

Devex recently hosted a webinar on the use of cash transfers for crisis response. Panelists included Deqa Saleh, cash and social protection adviser at Adeso, and Owen Barder, vice president and senior fellow at the Center for Global Development.

Fortunately, two years on from the signing of the “Grand Bargain,” in which donors and aid agencies committed to increase the use and coordination of cash-based programming, it is clear which lessons and strategies are driving successful outcomes. And while the ambitious targets of the Grand Bargain require big sector shifts in how aid is administered and delivered, stakeholders can deploy seven easy steps to ensure humanitarian cash transfers — or cash relief — is operationalized effectively to achieve maximum impact.

1. Set an ambitious target for cash relief

Ambitious targets provide a vision to build a strategy around and also ensure accountability. The International Rescue Committee set a target to deliver 25 percent of its humanitarian assistance via cash by 2020 — up from 6 percent in 2015. The Department for International Development, European Civil Protection and Humanitarian Aid Operations, and United Nations High Commissioner for Refugees as well as other NGOs such as Mercy Corps and World Vision also set targets to drive scale. IRC is well on the way to meeting this target, at 17.7 percent by the end of 2017.

2. Improve cash relief finance tracking

Improvements in measuring cash relief financing such as a common organizational definition of cash and corresponding account codes can help organizations reflect the cash relief work already underway globally. The humanitarian sector suffers from a lack of a single, cross-organizational, systematic means of tracking the volume and modality — cash, vouchers, mobile money etc. — of cash assistance. Improvements and consistency in tracking global financing of cash relief can support the expansion of cash in line with the Grand Bargain.

3. Introduce a ‘cash first’ approach — choosing cash where appropriate and possible

IRC’s “cash first” policy calls for a presumption that cash is best for supporting affected communities survival needs, as well as their food security, unless proved otherwise. Humanitarian donors including Sweden and Australia and agencies including the International Federation of Red Cross and Red Crescent Societies and Relief International have introduced similar policies as part of their commitment to increase cash relief.

4. Build the evidence base in using cash across outcomes

The evidence on cash relief’s potential to improve nutrition or increase women’s economic empowerment and security is more mixed. In these scenarios, organizations should prioritize research to improve understanding.  As we build the evidence base, and start to deliver cash in areas such as health, water, sanitation and hygiene, or women’s protection, we anticipate a growth in cash relief across humanitarian programs.

5. Expand better, faster cash relief using digital payments

Advances in technology help us reach affected communities with assistance when they need it most, in a faster, and often, safer way. Humanitarian contexts are not always favorable for digital payments, however. IRC research found that only 30 percent of high risk, humanitarian contexts have the preconditions in place for digital cash relief, and only 46 percent have last-mile connectivity initiatives underway. Greater digital financial inclusion — such as access to mobile banking and investments in digital infrastructure — is key to maximizing the potential technology offers to humanitarian progress.  

6. Develop safer, more secure cash relief delivery

Digital cash is more secure than physical cash, but organizations can still strengthen data security policies to ensure safe handling and storage of sensitive data. IRC has put strict processes in place for identifying and registering people in need, in order to minimize the risk of fraud while protecting sensitive data, and serving vulnerable populations in the safest way possible.

7. Measure efficiency and performance metrics

By using internal data to better understand the cost of different delivery mechanisms in different contexts, we can improve assistance to ensure we meet diverse needs and make the best use of available resources. The question of how best to measure the impact of cash relief is being considered by stakeholders across the sector, as donors are seeking to improve the efficiency and effectiveness of humanitarian aid. Further study of the cost efficiency for different programs in different contexts will allow the humanitarian sector to develop context-specific targets, ensuring the best use of available resources.

The views in this opinion piece do not necessarily reflect Devex's editorial views.

About the author

  • Daphne Jayasinghe

    Daphne Jayasinghe is the International Rescue Committee’s chief policy adviser for economic programs. She leads IRC’s work influencing economic policy impacting on refugees and migrants such as job creation and cash relief programs. Daphne specializes in gender and women’s rights and is currently the co-chair of the UK Gender and Network and former Women’s Rights policy adviser for ActionAid UK. She also served as Amnesty International USA's advocacy director for Women's Human Rights in D.C. where she worked on legislation on violence against women and maternal health. Prior to that Daphne worked on U.K. government and European Union policy development as a civil servant.