Undoubtedly you have given cash to someone in need but later wondered, “Did that person buy something to eat or just spend the money at the nearest liquor store?”
You are not alone. However, organizations such as GiveDirectly (www.givedirectly.org) have found that charitable cash transfers give the poor the flexibility to pursue their own goals and have long-term positive impacts.
In his article “The Three-Word Question That’s Changing What Charities Do With Their Resources” (The Atlantic, December 2016), Benjamin Soskis explores the study Doing Cash Differently: How cash transfers can transform humanitarian aid from the Overseas Development Institute (www.odi.org) and the Center for Global Development (www.cgdev.org). Indeed, with the growing number of digital payment systems, worldwide cell phone ownership and greater access to financial services, cash transfers can be an option to humanitarian organizations, and the study’s authors offer several recommendations.
- Give more unconditional cash transfers. Always ask two questions: “Why not cash?” and “If not now, when?” Invest in readiness for cash transfers in contingency planning and preparedness.
- There should be more efficient cash transfers, delivered through stronger, locally accountable systems. There are several ways to do it. Measure how much aid is provided as cash transfers and explicitly distinguish this from vouchers and in-kind aid.
- Systematically analyze and benchmark other humanitarian responses against cash transfers. Leverage cash transfers to link humanitarian assistance to longer-term development and social protection systems. Capitalize on the private sector’s expertise in delivering payments.
- Where possible, deliver cash digitally and in a manner that furthers financial inclusion. Improve aid agencies’ data security, privacy systems and compliance with financial regulations. Improve coordination of cash transfers within the existing system. Implement cash programs that are large-scale, coherent and unconditional, allowing for economies of scale, competition and avoiding duplication.
- Wherever possible, make humanitarian cash transfers central to humanitarian crisis response as a primary component of strategic response plans, complemented by in-kind assistance if necessary. Finance the delivery of humanitarian cash transfers separately from assessment, targeting and monitoring.