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Cash Transfers: An Innovative Solution to Humanitarian Challenges

In Khokana, Nepal, cash assistance increased food security and stimulated the local market post-earthquake. World Vision/2015

This article was written by Thabani Maphosa, by Vice President for Food Assistance at World Vision International


On May 23-24, world leaders will meet in Istanbul at the first ever World Humanitarian Summit (WHS) to to discuss the greatest humanitarian challenges facing our world. With an estimated US $20.3 billion needed to serve the 89.4 million people in need of humanitarian assistance – and only US $3.8 billion (19%) received as of April – the world is experiencing a historic level of human suffering and a growing funding gap.

UN Secretary-General Ban Ki-Moon is hosting this unprecedented summit of world leaders to look at how to fill this gap and better deliver safety, dignity and the right to thrive for all humanity.

These challenges demand innovative solutions. One innovative method that World Vision is promoting and advancing is the use of cash transfers to better deliver food and other humanitarian assistance to the world’s most vulnerable. Cash transfers are one of the most significant innovations in humanitarian assistance in recent memory. They offer greater dignity, choice and flexibility to disaster-affected peoples. For the world’s hungry, they also provide the means for people and communities to become hungerfree by supporting the opportunity to access the right food for today, enough food for tomorrow and sustainable food resources for the future.

Cash transfers are immediate assistance in the form of physical cash, e-money or vouchers. Until recently, using cash transfers as a development tool was met with skepticism. Conventional development and response programmes preferred to deliver goods, like food and medicine, and services like agricultural training. However, with countries like Mexico, Brazil and Peru establishing national (conditional) cash transfer programmes, and evaluations proving effectiveness, this has shifted.  The international community is now focused on figuring out the ‘nuts-and-bolts’ of how and when to leverage cash effectively to make real positive change for real people.  

What progress looks like

In FY15, 30% of World Vision’s global food assistance was distributed as cash transfers – up from 5% just 5 years earlier. Major food assistance donors have committed to ‘increasingly provide untied cash-based food assistance, whenever possible and based on needs’ in the modernised 2012 Food Assistance Convention. Similarly, a number of high profile reports for the World Humanitarian Summit, including the Report of the UN Secretary General One humanity: Shared responsibility support a ‘cash-first’ approach to humanitarian assistance. This is an approach that World Vision is committed to, pledging that by 2020, 50% of our humanitarian programmes will adopt a cash-based approach, where contextually appropriate.

A model, not a silver bullet

Cash transfers offer a significant opportunity to increase the effectiveness and efficiency to food assistance as well as other humanitarian aid. However, cash transfers are still only part of a long-term solution. The ability of cash transfers to deliver their promise fundamentally depends on whether or not they are calculated at a fair value and for a sufficient duration to accomplish the programme objectives. In short, cash transfers are not a band-aid for the global humanitarian financing gap, nor a long-term solution to ending conflict, where 80% of humanitarian resources are currently directed.

cashphoto2.pngImage: Veronica collecting her vouchers. Alex Pritz and Will Miller/2016

Cash transfers cannot effectively link to longer-term development or build resilience if the assistance does not arrive early enough to help vulnerable people mitigate the impacts of a crisis, or are not sustained long enough to help families recover. However, we have seen the transformational potential of cash transfers in our own programmes when undertaken in a way that is sensitive to market forces, respectful of affected populations’ preferences and needs and, to the greatest extent possible, are leveraged to support people to invest in their long-term food security and livelihoods.

Invest in humanity

The World Humanitarian Summit is an unprecedented moment for the global humanitarian community to demonstrate its commitment to invest in humanity and leave no one behind. Increasing the proportion of humanitarian aid that is delivered as cash transfers is an important part of delivering on this commitment. World Vision calls all humanitarian actors – governments, private sector, academia, civil society, etc. – to invest in humanity by increasing the proportion of humanitarian assistance through a multi-purpose cash first approach, where contextually appropriate.

Take action: Take the Humanitarian Challenge and then ask leaders to commit to action.

Learn more: Read about World Vision’s cash programming and food assistance in South Sudan and Lebanon.