Giving cash is key to alleviate humanitarian crises, report finds

The government of Tamil Nadu supports Sri Lankan refugees with a monthly grant of Rs 1,000 to every individual. (EC/ECHO Arjun Claire)

It is almost a given after major disasters that we see op-eds touting the value of donating cash rather than goods. The Average Joe is told to keep his old socks and pony up money. It is more effective, they would argue. And they are right.

The advice to give cash is making the rounds again, but the target isn’t Average Joe, it’s humanitarian aid groups. Proponents say more cash should be given by aid groups to people affected by humanitarian crises, including natural disasters and conflict.

A report by a High Level Panel on Humanitarian Cash Transfers and convened by the London-based think tank the Overseas Development Institute says it is not only a more efficient and effective way of providing assistance, it holds the potential to change the entire humanitarian sector.

“Done right, cash transfers could make a huge difference,” said Owen Barder, senior fellow at the Center for Global Development and chairman of the panel, at a launch event for the report. “And if we introduce it the right way, we can use their introduction to bring along long-needed reforms in humanitarian aid.”

The panel makes a dozen recommendations on cash transfers. The bottom line is that aid agencies, governments and the U.N. need to give more cash. Barder produced the report with a group of humanitarian leaders and academics. It leans heavily on the academic research proving the benefits of giving people cash and the experiences of organizations carrying out the programs.

The report bases its case on the fact that the nature humanitarian crises have changed dramatically over the past few years. Most money now goes to long-term problems, from the refugees living in Kenya’s Dadaab camp to the nearly 12 million people displaced by Syria’s civil war. In total, conflict forced the of 60 million people to leave their homes, as of 2014. Natural disasters add an average of 218 people per year.

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At the same time, Barder pointed out, the amount of money available is not keeping up with the demand. Reports come out on a near-regular basis where an aid group or U.N. agency says it has to make changes or stop providing assistance due to a shortfall in funding. It is vital that every dollar is spent as effectively as possible.

“I think we have the opportunity to put the beneficiary at the center of what we are doing in a way we’ve never done before,” said panel member Michael Faye at the event. He is co-founder and executive chairman of GiveDirectly and CEO and co-founder of Segovia Technology.

Currently, cash transfers and vouchers represent only 6 percent of humanitarian spending. The panel does not set out a target for spending, but there is not necessarily agreement on the decision. David Miliband, CEO of the International Rescue Committee, urged for a spending target during a recorded commentary. The group is one of many that are using cash transfers and vouchers to support Syrian refugees.

(ODI)

(ODI)

As cash emerges as a humanitarian trend, the practice has fallen in and out of favor depending on the decade. Giving people money was popular in the 1970s. It fell out of favor over the ensuing decades because it was believed that it created dependence among recipients.

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When the aid group Adeso tried to give Somalis affected by hunger cash in the early 2000s, nobody would fund the small program except Oxfam. The belief was the money could help fund terrorists and it would not help people long term. The program succeeded and Adeso started giving more cash as opposed to goods, said Executive Director Degan Ali.

“It should not be the responsibility of the refugee to navigate the system and figure out who gives what and where,” said Ali. “I see cash as not only doing the right thing, I see it as an opportunity to change the architecture as we see it now.”

In recent years, cash took off thanks to better evidence. Research conducted in Western Kenya on Faye’s GiveDirectly showed that people given money improved income and assets. And they did not waste the money on things like cigarettes and alcohol. For Faye, giving cash should be the benchmark against which programs are compared. Is doing X better than cash?

There are times when the answer is no. And also cases where it is yes. Giving vaccines or providing security are the types of things that cash cannot really solve. In some circumstances certain food or goods are not available to people. Aid groups can help fill that gap.

Giving people money is alone not the solution to humanitarian crises around the world. But doing it more often can lead to positive advances, especially when budgets are tight.

“We need as humanitarians to balance the social interventions we’ve always done with economic interventions,” said Miliband.

 

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.

  • Jonathan Scanlon

    You need to distinguish between the call for donors to donate cash (as opposed to goods/commodities/SWEDO) and the programs that give cash to recipients. It’s two different things. Both are good. A donor could give cash to an NGO that gives SWEDO and a donor could give SWEDO to an NGO that gives cash. Let’s do both: donors give cash to NGOs that give cash.

    • I made a minor tweak to make that more clear.