Money! Money! Money! Cash is Invading Humanitarian Action

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 of cash-based programming. Yet, a recent Overseas Development Institute (ODI) report describes mixed results for cash programming.[1] This begs the question of whether the humanitarian community knows enough about cash to set it at the centre of humanitarian action?[2]

Monitoring Performance: From the Simple to the Complex

There are six fundamental issues related to cash programming that we need to analyse:[3]

1.     Targeting: Do we target those who can use cash to decrease their vulnerabilities, especially when cash is provided in a fast moving and complex crises?

2.     Transfers: Did the intended recipients receive the right amount of cash at the right time?

3.     Expenditures: Did cash recipients spend the money in ways that reduced/stabilised their vulnerabilities?

4.     Diversion: Did recipients need to pay a “tax” or a “commission” or suffer any other type of diversion?

5.     Market Dynamics: Are there any effects on local markets/pricing?

6.     Social Dynamics: How do cash transfers affect household and community-level power dynamics, especially when targeting the most vulnerable?

Targeting is generally based on common standards and approaches. Yet, these may still neglect certain individuals and groups or miss people during a highly dynamic emergency. Research coming out of Somalia shows that there have been some clans and marginalised groups that have been perpetually miss-targeted and that these people are the ones most at risk to conflict and climate related shocks.[4] 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 change unexpectedly.  We’ve seen this in relation to the Syria crisis where different groups’ needs can change quickly and in places like Iraq where there are repeated and devastating conflicts.

Part of targeting in these complex, fast paced, humanitarian contexts involves supporting people who can use cash to stop an escalation in their vulnerabilities and/or decreasing their vulnerabilities overall. (Some hope to use cash to make the links to broader ‘safety nets’ and yet this seems to really push against the boundaries of reasonably expected results.”) Cash can address vulnerabilities in many different ways, from debt management to health care costs. This includes decreased levels of stress migration that signal livelihood stabilisation and, by being able to stay in the community, intact familial/communal networks, capacity to keep children in school, and less acute stress associated with the horrors of abandoning your home and community.

Effective targeting depends on having an understanding of what peoples’ vulnerabilities are at the time of a cash transfer and then a fairly complex understanding of how people’s choices and opportunities change because of having such cash. To do this, vulnerability assessments need to be much quicker, direct, and take samples across different populations at repeating intervals. They can’t rely, as is most often the case, on vast and complicated vulnerability assessments conducted annually, at best.

Transfers can be confirmed through direct beneficiary surveys and often through the modality itself, e.g. mobile payments or the WFP SCOPE platform.  The SCOPE platform is a promising modality. It enrolls 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 enrollment 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 use the card. People become frustrated, jettisoning the card into the nearest bin.

Call centres have the best opportunity for assessing whether people got the right amount of cash at the right time. DFID used a call centre to monitor cash disbursements during the 2017 food security crisis, conducting up to 800 surveys a day amongst cash recipients. The survey was highly focused, simply checking to see see if they got the right amount of cash, whether they suffered any form of diversion, and how they used the money. This could then pinpoint people/groups/areas where there were problems and DFID partners could take immediate action.

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 is 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 presents a myriad issues. Firstly, one needs to make a distinction between “fraud” and “malfeasance” and common ‘social capital’ payments.  Fraud occurs when a person or persons from an implementing partner ‘charge’ people for their cash or otherwise exploit them for the cash disbursement. Less clearly, cash recipients are often forced to pay extra ‘rent’ in IDP camps or exaggerated prices in stores. All of these are intolerable and yet they happen more often than we’d like. Social capital payments are different. Cash recipients often pay a percentage to village elders or others who then ‘redistribute’ the money. Sometimes this works well, with communities using their standard structures to ensure that all people in need are helped, at least a little bit. Of course, this complicates targeting and other issues important to the international community. How do we know that these ‘redistributions’ reach those most in need and do not fall along ingrained social patterns that keep some vulnerable? How do we know if male heads of households actually use the money in ways to support everyone in the household? These and other dynamics are very difficult to assess and yet cash makes all such distribution permeations possible. 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 and tertiary actors who are not considered in formal targeting strategies? 

Market dynamics can have an impact on housing costs for entire communities, as seen in Lebanon, or food prices, or exaggerated prices for basic commodities that are essential for one’s security. 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 rigorous 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 analysis. Will certain groups become more vulnerable because of their outside assistance or will they be able to position themselves more favourably in a 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 given to refugees for housing. The market adapted quickly to cash payments, to the detriment of those we are there to serve.

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, in the first instance, on transfers, expenditures, diversion, and targeting. A simple sample survey is provided below. This. of course, leaves social and market dynamics to other analytical tools. Yet, these should be treated separately and later because to try to do these, in addition to the most direct issues, would make overly cumbersome, expensive, and ineffective surveys. Keep it simple, to begin with and then expand once a solid foundation of data exists. 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. For cash, especially in complex, fast moving, humanitarian contexts, it is all about having solid monitoring architectures in place that include electronic data collection and on-line real-time dashboards to monitor results.

Evaluations come later and, if the monitoring data is good, especially in being statistically rigorous and tracking results over time, then evaluations can build on this rather than trying to assess everything on their own. Evaluations can be used to understand why certain problems emerge and what might be done to address root causes. They can consider qualitative questions and deploy 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.


[1] 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.

[2] For a brief on the subject, see: Dorian LaGuardia, “Cash: Do We Know Enough?” Humanitarian Analytics, May 2016.

[3] These would largely apply for cash-for-work and similar programmes although these require a wider set of indicators.

[4] Current research being conducted by Third Reef Solutions and the Centre for Humanitarian Change in relation to the current food security crisis.

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