HPG COMMISSIONED REPORT
Sarah Bailey, Kevin Savage and Sorcha
O'Callaghan
A report commissioned by World Vision International September 2008
Executive summary
For the past several decades, assistance strategies of humanitarian aid agencies such as World Vision have focused on the direct provision of goods and services to meet basic needs and rebuild livelihoods. Meanwhile, cash transfers are increasingly accepted as an alternative way to assist people reeling from the impact of crisis.
The terms 'cash-based response' and 'cash transfers' cover a wide range of activities across various sectors, including using unconditional cash grants, conditional cash grants, Cash for Work and voucher fairs to meet basic needs, provide shelter, rebuild livelihoods and promote reintegration. Cash transfers are not a sector in their own right, but simply tools that can be used - when appropriate - to meet a variety of objectives.
While the topic of cash-based responses in emergencies still provokes debate, discussions among humanitarian agencies have evolved from whether they may be an appropriate tool to how organisations, donors and governments can best use cash transfers, given their missions and mandates. Cash transfers are not a panacea; nor are many of the 'fears' about using cash transfers, including the potential for anti-social spending and disadvantaging women, necessarily justified in practice. Ultimately, listing theoretical advantages and disadvantages of cash transfers in comparison to in-kind relief is not a helpful framework for discussion; the appropriateness of cash transfers depends on needs, market functionality and other key factors, which vary from context to context.
This study is born of a commitment to understanding cash transfers as a tool for providing emergency relief and the subsequent implications for World Vision. It draws on the growing volume of evidence on the use of cash transfers in emergency contexts. It argues that cash-based responses are likely to be increasingly used as one of a range of options in emergency response and that World Vision needs to secure the skills and capacity both to decide when cash is appropriate and to programme it when it is. Other agencies have been leading this innovative work and World Vision is catching up, led particularly by their Food Programming Management Group. World Vision's pioneering Cash and Food Transfers Pilot Project in Lesotho is a strong step in this direction; however, it should not be the only one.
Developing the capacity required for cash transfer programming should not be overly complicated. World Vision has already implemented numerous cash and voucher projects throughout the world. As World Vision's experience in Lesotho shows, an agency does not necessarily need 'cash specialists', but rather experienced programme staff willing to consider the possible use of cash within their analysis of the situation and an appropriate response. Detailed guidelines on cash transfer programming are readily available and may be adapted by World Vision and included in its own decisionmaking and programming frameworks. While programming cash transfers may not be unduly complex, there nonetheless will be a need for increased experience and skills. A crucial area is assessments, which should include a focus on markets and systematic analysis of possible cash delivery mechanisms.
There is a growing recognition among public donors that, in certain contexts, cash transfers can meet project objectives more effectively than in-kind assistance, and it is likely that this overall - though limited - trend in favour of cash-based responses is set to continue. Yet few donors have established dedicated guiding criteria for the consideration of cash-based responses in emergencies. In order to access funding, organisations need to make very strong cases that cash transfers are an appropriate response, using robust assessments that incorporate analysis of needs, livelihoods, markets and risks. This underscores the need for World Vision to refine capacities in assessment and monitoring. World Vision Support Offices should increase dialogue about cash transfers with donors who are currently funding or exploring funding of various types of cash interventions.
These include the UK Department for International Development (DFID), the European Commission Humanitarian Aid department (ECHO), the Swiss Agency for Development and Cooperation (SDC), the Swedish International Development Cooperation Agency (SIDA), the Canadian International Development Agency (CIDA) and the Office of Foreign Disaster Assistance (OFDA) of the US Agency for International Development (USAID).
A bottom-up process is driving the change from a 'default' position of providing in-kind assistance to one that calls for a consideration of the most appropriate option. Agencies using cash-based responses are learning and pursuing innovative strategies, and the evidence base related to cash transfers in emergencies is growing as a result. World Vision has already made contributions to this evidence through the strong research, monitoring and evaluation components of the Lesotho pilot project.
Change of any sort in an organisation the size of World Vision is always going to be difficult. It is a ship adjusting its course - not a swerving speedboat - and cash represents particular challenges. First, it is perceived as a challenge to the role of food aid, which carries great significance in World Vision's overall resource envelope and in the way the organisation structures itself. Second, cash disempowers the benefactor and increases the freedom of beneficiaries to use assistance according to their own decisions. Distributing money to people and letting them decide how they want to spend it can require fundamental shifts in attitudes, both within World Vision and among its supporters, towards the people they wish to help. While the use of cash transfers still provokes passionate debate, discussions among humanitarian agencies have evolved from whether they can be an appropriate tool to how organisations, donors and governments can best use them, given their missions and mandates.
