An ABC for MPC: What multipurpose cash can and cannot do
From cash coordination workshops in Dakar to market-based programming sessions in Geneva, anyone who has ever discussed cash and voucher assistance (CVA) in a meeting can tell you that terminology is a challenge – especially when it comes to multipurpose cash. However, speaking the same language is crucial to build a common understanding of operational implications, and to harmonize standards for quality programming. Let’s take a step back and look at the different terms.
A Cash Transfer refers to the provision of assistance in the form of money to recipients (individuals, households or communities). It can be provided either in physical currency or through e-cash, for example through mobile money, cards, or other electronic transfers such as cryptocurrencies . Cash transfers are, by definition, unrestricted – because cash can be spent on anything. In this way, it is distinct from other types of aid modalities such as in-kind assistance and vouchers, which give recipients less or no choice. The terms cash transfers, cash or cash assistance can be used interchangeably. But they should be used only when referring specifically to cash transfers (i.e. they should not be used to mean cash and voucher assistance ).
So far so good. It gets more complicated if we look into the more recent concept of Multipurpose Cash Transfers (MPC), mainly because the term has been used in different ways in the past years, and there are different understandings of what constitutes MPC in the humanitarian sector.
Often we hear questions like, “Since cash can be used by the recipients as they choose and for any purpose they like, isn’t any cash transfer automatically a Multipurpose Cash Transfer?” But as explained in the latest edition of the CaLP Glossary, while MPC is one particular form of cash transfer, but not all cash transfers are MPC.
According to the Glossary, which was developed by the 25 members of CaLP’s Technical Advisory Group:
“Multipurpose Cash Transfers are transfers (either periodic or one-off) corresponding to the amount of money required to cover, fully or partially, a household’s basic and/or recovery needs. The term refers to transfers designed to address multiple needs, with the transfer value calculated accordingly.”
What differentiates MPC from other forms of cash assistance is that MPCs are designed to cover basic needs  (the essential goods and services required on a periodic basis by households to ensure survival and minimum living standards without compromising dignity) through an appropriate transfer value.
While the transfer amount of other forms of cash or voucher assistance is usually calculated to cover one or more sector-specific needs (e.g. as equivalent to a food basket; as equivalent to a (minimum) salary; as equivalent to rental costs etc.), MPCs are intentionally designed to cover – fully or partially – a household’s basic needs.
Tools and guidance exist to guide actors through the technical challenges associated with designing MPC programmes, as well as for Basic Needs Assessments and Minimum Expenditure Baskets (MEBs). But the biggest challenge associated with implementing MPC is that it requires a new mindset when it comes to programming. It is a mindset which requires implementing organisations to look beyond their sectors and mandates, and consider all the basic needs of a household – as a holistic picture rather than a pile-up of specific sector needs. For MPC to work most successfully, organisations representing different sectors and mandates need to work together, decide to do joint programming from the outset, and consistently coordinate their work throughout the whole programme cycle, from assessment to monitoring and evaluation.
MPC is not a silver bullet
The immediate effect of cash assistance is that it increases the purchasing power of a household, which allows families to cover their most urgent requirements. As a result, the consumption of available goods and services increases – but we can only make assumptions about what households will purchase. Paul Harvey and Sara Pavanello have shown that cash “is usually spent according to a hierarchy of needs – most immediate needs first (food, basic shelter, primary or emergency health care) and other needs later (investment in livelihoods, secondary and tertiary health care, less essential goods),” but context and programme design influence how beneficiaries prioritize spending.
While the transfer amount is an important factor, household decisions depend on a variety of factors. These can include the current household situation (a disease or death could result in ad-hoc expenditures), the household’s size and age (whether children require diapers, school fees or a bus to school), the social and cultural background (some may prioritize debt repayment), internal power dynamics (gender and intergenerational relations) and others. But cash is not able to solve all the problems and cover all the needs.
As Harvey & Pavanello state, even though cash “can be more efficient and effective in meeting a wide range of needs” it is “not the only form of assistance needed… Support for protection and sector-specific programming will remain vital for the supply of quality services and goods to affected populations, including displaced groups, and for the technical knowledge, training and behaviour change needed to achieve particular outcomes.”
Working together for quality programming
According to OCHA’s 2018 Global Humanitarian Overview, more than 135 million people are in need of humanitarian assistance, and 97.9 million people are targeted to receive aid. The financial requirements to cover these needs is 25.2 billion USD. In 2018 only 60% of these funds were covered. While the humanitarian community and donor countries work towards increasing the funding coverage, we must also look into more cost-effective ways to support people in need while upholding humanitarian principles and humanitarian standards. To ensure this, the humanitarian community should focus on promoting quality programming.
CVA is most effective and achieves better outcomes when it complements, not necessarily replaces, other types of humanitarian assistance such as technical assistance, sensitization, service delivery, in-kind, or vouchers. As mentioned above, MPC is not a silver bullet that would replace sector-specific interventions (including sector-specific cash transfers). At the same time, technical and protection experts should endorse cash assistance as a powerful tool, to cover some of the most urgent needs of affected people.
According to Grand Bargain: field perspectives 2018, a recent publication from Ground Truth Solutions, recipients consider cash to be their main unmet need, followed by food, shelter and medical assistance. As suggested by Harvey & Pavanello, “there is huge scope for greater complementarity between cash and sector-specific programming in ways that can create synergistic impacts.”
This requires that cash and sector specialists find ways to work together constructively and strategically throughout the whole programme cycle. The focus should be on integrated programming,  where different transfer modalities (service delivery, technical assistance, in-kind, vouchers, and cash) are combined to achieve the best outcomes for people in need. In its role as facilitator, CaLP is planning to take this quality programming conversation forward, with practitioners coming together in the first week of December for CaLP’s Cash Week, and to continue this discussion on MPC and related concepts in different formats at global, regional and national levels. As such, CaLP is currently developing an MEB tip-sheet that should be published in the coming months. We look forward to collecting your views on this – do not hesitate to reach out to CaLP’s regional teams to engage in this conversation!
 “ Cryptocurrency refers to a math-based, decentralised convertible virtual currency that is protected by cryptography.” See full definition in FATF, Virtual Currencies, Key Definitions and Potential AML/CFT Risks, June 2014
 CVA refers to all programs where cash transfers or vouchers for goods or services are directly provided to recipients. In the context of humanitarian assistance, the term is used to refer to the provision of cash transfers or vouchers given to individuals, household or community recipients; not to governments or other state actors. This excludes remittances and microfinance in humanitarian interventions (although microfinance and money transfer institutions may be used for the actual delivery of cash). This term has several synonyms such as Cash Based Interventions, Cash Based Assistance, and Cash Transfer Programming. Cash and Voucher Assistance is the recommended term.
 For the sake of brevity, we will focus only on basic needs, and not recovery needs. According to the Facilitator’s Guide for Inter-sector Response Options Analysis & Planning, the concept of Basic Needs “refers to the essential goods, utilities, services or resources required on a regular, seasonal, or exceptional basis by households to ensure survival and minimum living standards, without resort to negative coping mechanisms or compromising health, dignity and essential livelihoods assets.”
 As opposed to cash plus, that tends to put cash at the centre of the response and build complementary activities around it
Main image: Jeppe Schilder/Oxfam Novib