question posed to aid worker Sarah Bailey in 2005 illustrates
how far the thinking about cash as aid has come in just
a few short years: “If a beneficiary
runs away with the cash, should we chase him?”
A local aid worker asked me the question above in 2005 as
we prepared to distribute US$ 70 to people affected by disaster
and fighting in Kindu, Democratic Republic of the Congo.
The cash grants were part of a study to see if those affected
would rather buy household goods in a local market than receive
a standard package of commonly needed items. Every single
person preferred the cash, and they mainly chose things it
had never occurred to us to provide: bicycle parts, mattresses
and radios to keep up on election news.
The ‘chasing’ question has stayed with me over
the years. We laughed about it at the time, but it also embodied
the scepticism and discomfort many of our team members felt
about trying this new approach.
Today, cash transfers are accepted as an integral part of
emergency operations and evidence is mounting that cash transfers,
properly handled, work. It is simple economics and human
nature. Aid agencies tend to provide people affected by disaster
with the goods and services they need. But where these are
available locally, why not give people money instead? From
paying school fees to choosing their preferred foods, cash
enables people to respond to their own priorities. For aid
agencies, cash transfer programming reduces the costs and
logistics of storing and transporting tents, rice and other
commodities. The potential advantages are obvious.
Giving people money is a straightforward solution, but still
a divisive one. Cash transfer programming challenges traditional
ways of delivering and organizing humanitarian response.
The inherent power associated with cash turns notions of
charity on their head. Most aid agencies would not hesitate
to deliver large quantities of food. However, the notion
of delivering large quantities of cash raises a series of
questions about the opportunities, consequences and risks
of giving money to vulnerable people during times of crisis.
An (almost) new approach
Cash as a form of relief is actually not a recent innovation.
Among other historical examples, Clara Barton, one of the
founding figures of the American Red Cross, organized cash
relief in the 1870–1871 Franco–Prussian war.
Numerous governments routinely provide cash to poor people
as a form of social protection and also to people affected
by disasters. In 2005, the government of Pakistan gave
cash to 270,000 families devastated by the Kashmir earthquake,
and partnered with the credit card company Visa to reach
nearly 2 million families hit by floods in 2010. The United
States government provided US$ 7 billion to people affected
by hurricanes Rita and Katrina to cover losses and expenses.
Cash transfer programming is, however, relatively new to
most humanitarian agencies, donors and Red Cross Red Crescent
societies. The response to the 2004 Indian Ocean tsunami
included several small projects giving cash instead of food,
sparking substantial discussion on cash in emergencies. Much
of the debate focused on risks: would cash be embezzled,
cause inflation and put people in danger? Some were concerned
that affected people might spend cash on frivolous, and even
harmful, products like alcohol and cigarettes, and that women
might be disadvantaged if men controlled they money. One
donor summed up fears about negative press if a cash intervention
went awry: “I can just imagine the headline, ‘Aid
groups throwing away cash’.”
No evidence of more corruption
These are valid worries. But in fact, numerous pilot projects,
studies and evaluations since then have all generally concluded
the same thing: that cash poses different — but not
necessarily more or less — risks than in-kind assistance.
In Somalia and the Russian republic of Chechnya, some aid
agencies found cash to be safer than food aid, as cash can
be delivered more discreetly and can disappear into a person’s
pocket once received. Also, there is no evidence that cash
is more prone to corruption or that it results in unmanageable
targeting challenges because it is so desirable. (Is it not
a good thing to provide desirable assistance?)
Fears that women would be disadvantaged by cash — along
with hopes that they would be empowered — have little
evidence to back them up. After all, the roles of men and
women are deeply embedded in our cultures, and cash alone
is unlikely to change them.
People receiving money by and large spend it responsibly.
Concerns that they would not reveals some troubling biases
about how aid agencies perceive those they assist. There
will always be a small number of people who are irresponsible;
disaster does not eradicate human failings that can be found
anywhere. But how can humanitarians support the dignity of
vulnerable people if they do not trust them to look after
their own needs?
Countless interventions have confirmed the main advantage
of cash: that people affected by crisis can respond to their
own priorities in a flexible and dignified way. Cash also
means that people do not sell aid to buy the things that
they need most.
Raising the bar
Aid agencies are using more in-depth analysis to justify
cash — both to themselves and to donors — compared
to other responses. They are looking at markets, what affected
people prefer and how families make decisions in times
of crisis. These are important issues that they do not
always consider when providing other forms of aid. Responses
using cash have also been subject to intensive monitoring
in terms of how the money is spent and its impact. In short,
cash transfers are more scrutinized than more traditional
ways of helping people.
This could be seen as an ‘unfair’ double standard,
but it’s a good thing. The scrutiny given to cash transfers
actually might raise the bar for how humanitarians plan,
implement and monitor their responses — regardless
of the type of assistance provided. The very fact that cash
exists as an option encourages analysis of the likely impact
of different responses, rather than automatically opting
for tents or food aid.
A change of mind
In-kind assistance remains by far the dominant form of humanitarian
aid. However, it is difficult to find any recent major
disaster response where cash transfers have not been used
by aid agencies. No crystal ball is needed to know that
the rapid increase in cash transfer programming will continue.
Aid agencies therefore need the skills and systems to routinely
consider and deliver cash responses when they are appropriate.
This includes having the skills, and incentive, to better
understand markets. Achieving this is not overly difficult:
aid agencies have tools and experiences to share and resources
on cash programming and market analysis abound. Perhaps
most importantly, a change in mindset is also required,
whereby those providing assistance give some of their control
to people affected by disaster and crisis.
In less than ten years, humanitarians have moved far beyond ‘testing’ cash
to reaching hundreds of thousands of people annually. They
are even using new technologies like mobile phone transfers
in places where banks do not exist. Cash programming is arguably
one of the most radical, yet simple, developments in humanitarian
aid in decades. Change is happening — and in this case,
it’s change we should keep.
By Sarah Bailey
Sarah Bailey is an experienced humanitarian aid worker and an expert on cash