Unlocking the power of cash to help those who risk being left behind
The World Food Programme at the World Humanitarian Summit
By Kenn Crossley, Deputy Director, Policy and Programme, UN World Food Programme
The bold new Sustainable Development Goals set last September challenge all of us to work and think differently so that everyone on the planet has the chance to thrive.
Governments, businesses, international organizations, civil society, individuals all need to be more joined-up - better at sharing information, expertise and solutions. To do that we must re-wire our thinking to put people – particularly those furthest behind – at the heart of our efforts.
I believe part of the re-wire must include a long hard look at the potential of cash transfers, instead of in-kind assistance such as food, clothing or shelter to assist people in need.
Many major humanitarian organizations including the UN World Food Programme (WFP), have increasingly been using cash-based transfers for the past decade, reaching 3 million people in 2010 to 9.6 million in 2015.
But many of us agree that cash, currently just 6% of humanitarian organizations’ annual spend, isn’t being used to its full potential and we must remedy that.
At the first World Humanitarian Summit in Istanbul this month, cash programming will be high on the agenda as one of the agents of transformative change.
In many contexts - including sudden disasters like earthquakes or typhoons or where conflict drives displacement – cash-based transfers can achieve better results than traditional forms of assistance.
Cash solutions can also be more cost-effective – which is alluring for donor governments with shrinking aid budgets. We must never lose sight of the fact that our programmes must improve the lives and resilience of those in need. Without this, any savings are pointless.
While cash options should be front of mind for all humanitarian and development responders, there is no getting away from the importance of context. Determining how to best meet the needs of the most vulnerable people on the planet is context specific. And with food in particular, we cannot afford to cut corners on the solid market analysis and local knowledge that are vital to make the right call in each case.
WFP has had cash-based transfers as a major tool in its toolbox for some years – in the form of actual banknotes, bank transfers, vouchers, electronic cards, mobile phone credits and more – and we are monitoring the outcomes in more than 50 countries.
We’ve seen what it does for families - it gives choice, independence and a sense of normality. It can work preventively too; for people living in flood or drought-risk areas providing a cash injection at the right time can guard against crop failure forcing them into hunger.
But experience has taught us not to take lightly the decision to use cash.
Cash won’t work in a country with no food to buy or where the traders aren’t able to maintain stock flows. Nor if the food supply is suddenly cut off by flooded roads or conflict.
And just as there are transport costs and practical hurdles to delivering bags of rice, there are set-up and infrastructure costs in distributing money. Do the local banks function for bank transfers? Is there mobile phone coverage and ownership if you are using phones? Are the people you plan to reach able to use an ATM card?
And programmes that provide cash transfers to meet food or other needs require the same rigorous monitoring as those distributing actual food or other in kind supplies. Digital systems, like those WFP has invested in, can make some of that work easier. Tracing the expenditure and impact on families of actual banknotes is more complicated.
There are other more subtle issues to consider – research shows women are more likely than men to spend money on food for their children but could giving those women cash expose them to gender-based violence? If the threat is real, how do we mitigate it?
It is fashionable to dismiss as ‘old-fashioned’ delivering staple food commodities. But in the real world, there will always be occasions where the only solution is to put food on a ship or truck. To put people first during Yemen’s civil war when inflation was skyrocketing and markets disrupted by embargos and conflict, the right choice was in-kind assistance. Yet in other challenging contexts, in Somalia and Iraq, we are finding ways to provide people with cash to buy their own food
As the largest organization working to end hunger, we have tested each approach and are expanding the use of cash solutions within our overall portfolio.
We firmly believe that through new deeper partnerships and innovative thinking, we can continue to unlock greater benefits.
For instance, WFP works with retailers to improve their efficiency by itemizing retail point-of-sale data which can have a flow on effect of lower prices for the entire community.
Through increasingly digital transfers, we can also trace what food people spend their cash on. When there are precise nutrition objectives, we can switch to in-kind food if we see money is not spent on nutritious items.
This holistic approach to hunger involves partnerships with a wide range of local organizations.
WFP’s OneCard system has all these agencies loading money onto a single e-card, allowing Syrian refugees to purchase the goods and services they need. The cards can be used at automatic teller machines to withdraw money or like debit cards in shops. In Lebanon, contracting different actors in the food value chain provides seven percent extra purchasing power to beneficiaries.
But the savings don’t stop there. For aid organisations and recipients, a shared cash system can mean a single call centre and feedback mechanism, common training sessions and shared data management to better tailor programmes.
This is exactly what the Secretary-General is calling for at the World Humanitarian Summit: a new way to address today’s needs in a way that will give people what they require to end those needs. It is about partnership, cooperation and a policy that puts people first.