What is the future for cash transfers?

Cash transfers have gradually become more and more popular in the world of development. In 2022, about 23% of all humanitarian spending was delivered directly to aid recipients via cash transfer — more than $10 billion. Even in development, where cash transfers are far less widely used than in the humanitarian sector, there was a positive body of evidence pointing to their effectiveness. But even before the second Trump administration, there were signs that the sheen was coming off, with reports showing steep drops in 2023 and 2024. Nonetheless, Isabelle Pelly, the senior policy director at GiveDirectly, one of the world’s biggest cash transfer organizations, said the case for cash is increasingly strong. “Cash transfers have had a strong body of evidence, building over the last couple of decades,” she said, “showing that it’s not only effective, but also efficient, transparent and, crucially, dignified.” Speaking at Casa Devex this week on the sidelines of the Fourth International Conference on Financing for Development, Pelly said that Tom Fletcher, the U.N. humanitarian coordinator, is already convinced — and cash advocates are working hard to frame the case for cash in a way that is compelling for the Trump administration. It’s a key issue, given that the United States funded around 40% of all humanitarian cash transfers last year. “We do feel that despite the headwinds, there’s really a window of opportunity now that we have to seize,” Pelly said. Up until this point, cash has primarily been used to tackle emergencies, but she said GiveDirectly is increasingly looking at how cash can be used for social protection. Large, one-off unconditional cash transfers have been shown to have significant long-term effects on the well-being of families, Pelly said. GiveDirectly is working with governments in countries such as Rwanda to use these methods to help move away from needing social protection in the long term. The organization is also working with governments to use mobile phone data to identify vulnerable individuals.