Money! Money! Money! Cash is Invading Humanitarian Action
Cash based programming is assuming a prominent position in humanitarian action. The United Kingdom (UK) is a primary and early advocate for cash and this is becoming more widespread, especially after the Grand Bargain forged at the 2016 World Humanitarian Summit where countries agreed to increase the use and coordination of cash-based programming. Yet, a recent Overseas Development Institute (ODI) report presents wide ranging results in relation to cash transfers. This, amongst other considerations, begs the question of whether the humanitarian community knows enough about cash to set it at the centre of humanitarian action?
Monitoring Performance: From the Simple to the Complex
There are six fundamental indicators/questions related to unconditional and conditional cash programming:
1. Targeting: Is targeting effective in selecting those who best qualify according to programmatic goals?
2. Successful Transfers: Did the intended recipients receive the intended amount of cash at the right time?
3. Expenditures: Did cash recipients spend the money on what was intended?
4. Diversion: Did recipients need to pay a “tax” or a “commission” to anyone because of receiving direct cash support?
5. Market Dynamics: Is there any effect on local markets/pricing given cash transfers to communities/groups?
6. Social Dynamics: How do issues of social capital and social exchange change given cash distributions to select individuals and groups, especially for the most vulnerable and marginalised?
Targeting is generally based on common standards and approaches. Yet, these may still neglect certain individuals and groups. Research coming out of Somalia shows that there have been some clans and marginalised groups that have been perpetually miss-targeted and that these are the ones most at risk to conflict and climate related shocks. We need to ensure that cash is getting to the right people at the right time. Targeting should also account for the dynamism that occurs during a complex, large, and quickly changing emergency: different groups’ needs may increase unexpectedly whilst others may improve. We’ve seen this in relation to the Syria crisis where different groups’ needs can change quickly.
Successful transfers can be confirmed through direct beneficiary surveys and often through the modality itself, e.g. mobile payments or the WFP SCOPE platform. This can be assessed/confirmed through a simple survey. The SCOPE platform is the most promising modality. It enrols people and then actually gives them a “cash card’ that can be used with participating merchants. While the SCOPE platform hopes to provide more transparency and make the cash more conditional, e.g. can only be used on food during a food security crisis, it is still plagued by issues that dim the prospects for the end user. For instance, cash recipients are enrolled and then given a “cash card” that can be “topped-up” at enrolment stations. This two-step process is important for ensuring that the right people are registered and yet it leads to many people being confused by the card, going into participating merchants prior to “topping-Up” and thus unable to sue the card. People become frustrated, jettisoning the card into the nearest bin.
Expenditure levels can be assessed relatively easily. Some traditional economic models predict that people will spend money on things that are in their best interest. If they are facing food insecurity, they will buy food. If they are cold, they will buy blankets. Research Third Reef Solutions has undertaken shows that this not always the case, especially for communities under duress. Work in Gaza, Lebanon, Jordan, and Somalia, show that some people under severe duress will use money to buy sweets or toys for their children or tobacco/narghile or even new plates and cutlery, even when their food security is at risk. People are not always “rationale” with money. This is supported by behavioural economics that link human behaviour with economic choice. Given this, one must ask: Is the international community willing to let cash recipients use the money on whatever they want, even if it is not in their best interest?
Diversion can be similarly assessed and yet it presents a myriad of possible issues and variations. Firstly, one needs to make a distinction between “fraud” and “malfeasance” and societally common payments. Fraud occurs when a person or persons from an implementing partner “charge” people for their cash or otherwise exploit them given the cash disbursement. This is intolerable and yet happens more often than we’d like. Issues of social capital seem to run the full gamut from charges paid by IDPs in camps to paying stores a slightly exaggerated price. It includes sharing of money with other people in the community and village elders. These forms of “diversion” are so varied and common in different cultural contexts that it raises another compelling question: Is the international community willing to accept that cash based programming may imply that cash is spread amongst a range of secondary actors as a “tax” or “commission”?
The complications presented above pale beside the complexities associated with market and social dynamics.
Market dynamics can have an impact on housing costs for entire communities, as seen in Lebanon, or food commodity prices in a range of contexts. Sometimes this can be positive. The humanitarian community is being credited currently for stabilising food prices in Somalia during a food security crisis that threatens famine. As with the challenges associated with targeting, an effective analysis of these depends on fairly rigours macro-economic and demographic statistics. These are not often readily available nor up-to-date in the places of the greatest humanitarian needs.
Social dynamics present even more complexity. Given that the nuances of social exchange are poorly understood in most places, understanding how these change when certain individuals or groups receive cash assistance is currently beyond most evidence based analysis. Will certain groups become more vulnerable because of their outside assistance or will they be able to position themselves more favourably in the community? Will host communities and others react negatively to the support provided to newcomers in their communities, especially when coupled with higher prices for commodities and housing?
Third Reef Solutions’ research into this is mixed. In Gaza, cash recipients have both paid down small loans and assumed other loans from shops and community members; both of which better integrate these individuals/households with the community. In other places, there seems to be predatory behaviour against the most vulnerable who suddenly receive cash assistance from “outside groups.” For instance, the housing market in Lebanon has found every conceivable space, from damp, vermin infested basements, to shacks behind more permanent structures, all of which are rented at the standard amount paid to refugees for housing.
Start with the Basics. Develop the Evidence. Move on to the Complex
While the issues and complexities presented above should be considered, the humanitarian community should avoid two pitfalls: first, to do nothing at all; second, try to do it all and thus do it all poorly. The humanitarian community needs to develop sound evidence on the most basic elements of cash and then use this to move toward more complex issues. This means collecting data on transfers, expenditure, diversion, and maybe targeting. A simple sample survey is provided below. The most important point is to start collecting data as soon as possible, even if it only focuses on a few key indicators.
The humanitarian community should also be diligent in understanding the difference between monitoring and evaluation. Monitoring establishes mechanisms to signal delivery/performance issues in as near “real time” as possible. It is meant to prompt immediate action. As often described, monitoring rings the alarm bells; it is up to the implementers to put out the fire.
Evaluation is then used to understand why certain problems emerge and what might be done to address root causes. It considers qualitative questions and deploys a range of methodologies, data collection tools, and analytics to answer these questions. Of course, this becomes easier when there is a foundation of monitoring data that has been collected during implementation.
 Francesca Bastagli, Jessica Hagen-Zanker, Luke Harman, Valentina Barca, Georgina Sturge and Tanja Schmidt, with Luca Pellerano; “Cash transfers: what does the evidence say? A rigorous review of programme impact and of the role of design and implementation features.” Overseas Development Institute, July 2016. Pages 241 – 253 present summary results of the literature review.
 For a brief on the subject se: Dorian LaGuardia, “Cash: Do We Know Enough?” Humanitarian Analytics, May 2016.
 These would largely apply for cash-for-work and similar programmes although these require a wider set of indicators.
 Current research being conducted by Third Reef Solutions, Transtec and the Centre for Humanitarian Change in relation to the current food security crisis.