After years of being seen as a fringe approach in the development aid sector, cash transfer programs are having a moment. Amid the sudden and widespread changes caused by the COVID-19 pandemic, such as lockdowns and increased unemployment, no-strings attached cash transfer programs went mainstream. Seemingly overnight, they became a popular aid tool for governments to quickly provide flexible funding to people who lost their income or incurred sudden expenses.
Meanwhile, international agencies and NGOs like the United Nations and the International Rescue Committee have embraced giving cash. The UN Refugee Agency has said cash transfers “gives refugees the power of choice” on how best to use aid to meet their own needs. And the pandemic highlighted how cash transfers are a means of delivering funding quickly when access to other delivery systems is limited.
GiveDirectly, a U.S.-based nonprofit that sends cash grants to people living in poverty, is the biggest philanthropic organization behind the popularity of cash transfers. Its many fans include some of the wealthiest people in the world, such as MacKenzie Scott and former Twitter CEO Jack Dorsey, who have both donated to GiveDirectly over the past two years. Donations to GiveDirectly spiked from $42 million in 2019 to $303 million in 2020.