Reimagining aid in the digital age

A new Devex report produced in partnership with Visa examines how digital tools and capabilities can best be leveraged to develop more flexible and inclusive approaches to aid delivery.

Humanitarian aid delivery requires a radical rethink, with the development of more flexible and effective approaches that ensure programs deliver choice, sustainability, and inclusivity.

Record levels of conflict, food insecurity, natural disasters, and health emergencies have driven up demand for aid, with over 400 million people now needing humanitarian assistance globally. Crises are also becoming more complex, with many communities impacted by multiple challenges at once, or facing fresh disasters before they have recovered from previous ones. And budget-pressured donors are increasingly calling for solutions that enable limited funds to stretch further and ensure aid delivers more dignity and resilience to everyone in need.

Digital technologies — including digital payment methodologies that are supporting the rapid adoption of direct aid — provide new opportunities to address these challenges. However, such solutions must be designed and implemented with significant planning and expertise.

Devex and Visa explore these themes in a new report titled Reimagining aid in the digital age: Building global capabilities to serve local needs. Informed by a survey of nearly 1,000 aid professionals, along with in-depth interviews and innovative examples, the report examines how digital tools and capabilities can best be leveraged to develop more flexible and inclusive approaches to aid delivery.

 “Continuous innovation in humanitarian aid is essential to global and local recovery and growth, as our world responds to ever more complex challenges. At Visa we are committed to supporting the creation of more responsive and flexible aid delivery ecosystems through our payments network and our many global and local partnerships.”

— Louise Holden, global head of government partnerships, Visa

Here are five key findings from the report:

1. People-centered approaches should prioritize choice and flexibility

Prioritizing choice and flexibility are key to ensuring aid programs deliver people-centric solutions that are designed around communities’ evolving needs and adapted to local circumstances.

Direct aid is increasingly viewed as the least prescriptive form of humanitarian assistance. But there are pros and cons to each aid delivery method, and no solution is best for every person or context. Digital transfers to wallets, for example, offer beneficiaries choice and dignity, but can exclude those without digital and financial skills. And while distributing food or clothing as in-kind assistance is often the fastest way of meeting people’s basic needs early in a crisis, it can lead to communities being offered items that are unsuitable or culturally inappropriate.

Some 94% of humanitarian aid professionals polled for the report believe that beneficiaries and the organizations serving them should be offered a suite of aid delivery options to choose from. Where digital payment solutions are employed, beneficiaries should as much as possible be able to choose how to receive and withdraw funds. For example, the World Food Programme’s plugPay solution allows recipients to specify which bank account or mobile wallet payments should be transferred to.

Comprehensive but flexible needs mapping and feedback exercises are also vital for identifying which options to offer beneficiaries. For example, World Vision has developed a rapid needs assessment tool that field officers are trained to deploy in rapid-onset disasters.

2. Inclusivity and accessibility should be central to program design

There is an urgent need for more inclusive programming. Humanitarian aid delivery should be customized to reach groups that are marginalized or particularly vulnerable, and designed to overcome barriers they face in accessing aid.

Lack of formal identification documents, for example, can limit the aid delivery options available to women and refugees in particular. Difficulty obtaining digital IDs contributes to 84 million forcibly displaced persons struggling to access banking or mobile money services — both important channels for digital aid delivery. Innovative workarounds to this problem include Crown Agent Bank’s use of a biometric payment solution to enable beneficiary ID verification.

However, improving marginalized groups’ access to digital aid or financial services also requires sensitivity to the risks they face. Robust protection of beneficiaries’ data and privacy is essential, especially in conflict zones or contexts where the identification of an individual could endanger them. The UN Refugee Agency, for example, commits to undertake data protection impact assessments.

3. Rapidly evolving crises require fast, efficient, and scalable responses

Delivering effective and scalable responses to rapidly evolving humanitarian crises requires rapid program rollout in challenging contexts. Direct aid can often be deployed more quickly and flexibly than indirect aid. Digital payments can further streamline delivery, with 61% of humanitarian aid professionals surveyed viewing increased speed and flexibility as key benefits of digital payment systems.

Anticipatory approaches to aid delivery can help accelerate responses and maximize impact. For example, households in Bangladesh that received mobile money transfers ahead of peak flooding through a government scheme were 36% less likely to go without food for a day. Working with payment aggregators — organizations that act as a single point of contact for humanitarian partners looking to contract financial service providers in programs — can also speed up aid distribution.

However, each form of aid delivery has advantages and disadvantages, and some are better suited to certain contexts or different phases of a crisis. For example, in-kind assistance, such as the distribution of food and shelter, can be the most effective first response following a natural disaster such as an earthquake, but digital payments might offer more flexibility once local markets have reopened and digital infrastructure has been restored.

The ability to switch nimbly between aid modalities as crises evolve is therefore essential, argued Kathryn Taetzsch, global director of humanitarian partnerships and cash-based programs at humanitarian organization World Vision International. “We cannot just say ‘Always use cash vouchers.’ You need to be ready to go back to in-kind if you have inflation.”

4. Designing programs for the long term will produce more sustainable outcomes

Designing interventions for the long term can lead to increased resilience and more sustainable outcomes. For example, investing in cell towers, digital payment infrastructure, and digital and financial literacy programs can improve populations’ financial inclusion, help them engage in the digital economy, and strengthen their livelihoods. And with humanitarian experts viewing limited digital payment infrastructure and lack of digital and financial literacy as the top two barriers to the widespread adoption of humanitarian digital payments, such investments can also support communities’ ability to access humanitarian aid in future crises.

Integrating humanitarian aid payments into existing social protection programs can also increase the reach of aid interventions and sustain their impact. For example, Colombia’s Ingreso Solidario emergency program had by April 2021 delivered payments to 4 million households via bank accounts or mobile wallets.

“The best type of program is one that touches on both short- and long-term needs,” said Kaitlyn Scott, cash and voucher-based interventions program specialist at the United Nations’ Food and Agriculture Organization. “Having a social protection system of monthly payments for a long period of time, and then adding in a shock response or crisis modifier is a way to incorporate the emergency into what’s essentially a development project.”

5. Diverse, equitable, and well-coordinated partnerships are key to tackling interconnected challenges

Complex and interconnected challenges require input from a diverse variety of partners, ranging from international aid agencies to private sector technology providers. Solution networks can marshal these parties’ diverse capabilities and expertise into one space, helping facilitate equitable knowledge sharing and creating opportunities for longer-term holistic interventions. The Collaborative Cash Delivery Network, for example, creates a space for local NGOs to collaborate and share best practices.

Well-coordinated partnerships are key to harnessing such abilities and focusing them on shared goals. For example, a project to distribute blockchain-based payments in Ukraine was only possible due to a multistakeholder partnership that combined and coordinated the unique capabilities of UNHCR, the International Rescue Committee, the Stellar blockchain network, stablecoin creator Circle, and wallet provider Vibrant.

Humanitarian groups should view financial service providers and other private sector players as partners rather than simply service providers, said Michael Belaro, Asia-Pacific regional representative at The CALP Network, a global network of organizations working in humanitarian cash and voucher assistance. “There’s so much expertise from the other side of the fence. The private sector can offer so much that humanitarian actors don’t necessarily have.”

For more insights and recommendations on how to deliver next-generation humanitarian aid, read the full report here.

More reading:

How is a shift to cash changing the aid sector? (Pro)

How fast is cash assistance growing?

Opinion: Cash transfers should be the default, not just the benchmark