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Cash 101: Cash and Voucher Assistance Explained

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As Cash and Voucher Assistance scales up, can quality keep pace? Four systemic changes needed.

26 October 2020 — By Ruth McCormack

A decade ago, the use of cash and voucher assistance (CVA) was a fringe activity limited to small, scattered projects.  Five years ago, CVA was still viewed with scepticism by many and comprised less than eight percent of international humanitarian assistance (IHA). Today, while critics remain, cash is an essential component of almost every response, and in 2019 accounted for nearly a fifth of IHA. The volume of CVA has doubled between 2016 and 2019, reaching a total of approximately US $5.6 billion.

Within a humanitarian system where the pace of change can often be glacial, this massive growth in the use of cash marks a significant evolution. As the State of the World’s Cash 2020 (SOWC2020) report highlights, we also know more now about what makes cash an effective component of humanitarian programming, what is valued by recipients, and how to deliver better. But more remains to be done to increase both the scale and quality of CVA. As the volume of CVA increases we need to continue to consider how we can best work at scale without losing quality? How can CVA not only help recipients, but also go further to help fundamentally reshape a divided and inflexible humanitarian system? The following highlights some key findings from the report and ideas about how to address them.

  1. CVA is on the rise – but we still need to scale it up further

While CVA is increasingly mainstreamed, it is still far from being used to its full potential, including as part of a broader integrated approach to programming incorporating different modalities of assistance. Let’s not forget that a 2016 GPPI report estimated that if CVA was used wherever it’s the best tool, it would account for around 40 percent of IHA – more than double the current proportion. This means that whether because of policy or funding restrictions, sectoral preferences and mandates, lack of experience, and/or a tendency towards ‘business as usual’ in programme design, opportunities to deliver CVA are often still missed. Given the benefits cash can provide in terms of access and choice for recipients, and the potential efficiency gains that can be accrued through CVA, these can be missed opportunities to improve humanitarian programming. This points to greater recipient satisfaction when CVA is used within a humanitarian response. By putting a greater emphasis on response analysis, the chances of missing CVA as an effective response tool are much reduced.

  1. With needs growing and funds shrinking – cash must be used to enable greater agility and efficiency

The world, and the humanitarian system, are facing profound challenges including escalating climate change, COVID-19 and rising inequalities. In some countries we are also seeing damaging shifts in terms of the norms, principles and political discourse that would have been unthinkable only a few years ago. With needs soaring and funding shrinking, the status quo is no longer tenable. The need for a more agile, efficient, effective, and accountable humanitarian system has never been more urgent. As Heba Aly (@hebajournalist) noted during the launch of the SOWC2020, CVA could offer some answers to the challenges faced, but

“is it the latest tool to do the same old thing or a radical rethinking of aid?”.

Cash can help shift more decision-making power to recipients, to determine for themselves which needs to address. The report underscores the requirement for a fundamental shift in the way we do things so that the priorities of people in crisis – and their assessment of value – defines success. Listening to affected communities and recipients should form the basis for evaluating how effective programmes are, but in practice this is still primarily informed by the benchmarks of donors and aid agencies. Changing this will require a perhaps unprecedented degree of collective commitment and engagement from stakeholders across the humanitarian system, and a willingness to cede areas of influence to others.

  1. More CVA is being delivered by fewer agencies: we must remain collaborative to maintain and improve quality for recipients

The SOWC2020 highlights a range of new collaborative approaches to providing CVA. At the same time, there is a trend towards a smaller number of larger actors delivering a higher percentage of CVA globally. In 2019 63 percent of CVA was programmed by UN agencies and their partners, carrying with it the risk of reducing opportunities for greater collaboration and localization of CVA and wider programming unless – of course – stakeholders are open and willing to actively counter these risks. This includes ensuring we build on the best of what we know to embed quality, inclusion and accountability, driven by evidence of what works for recipients. This in turn requires agencies to be more transparent in assessing different approaches to delivering CVA and agreeing common measures to enable fair comparisons between them. For example, it has so far often proven very difficult to access the financial and programmatic data required to undertake independent cost efficiency and cost effectiveness analyses, even while the value of being able to do so is widely recognized. Having a better understanding of what does and does not work, why, and where, would also be useful in acknowledging where there are likely to be trade-offs between quality and scale and deciding which of those trade-offs are acceptable.

  1. We need to harness cash as a tool for system-wide transformational change

The ongoing pandemic continues to drive an increase in the use of cash as a means of addressing multiple needs and shoring-up and restoring livelihoods. This presents more opportunities to develop joined-up and coherent approaches across the humanitarian-development nexus in the longer-term, for example through better linkages between humanitarian CVA and social protection and incorporating cash in risk reduction and resilience building. Cash is and remains a tool, but one that can facilitate further positive change if used more broadly and wisely.

Looking ahead, our hope for the next edition of the State of the World’s Cash report is that we will be able to reflect upon more plural, local and people-centred CVA responses, in which international humanitarian actors have ceded some control while retaining a sharp focus on ensuring principled, needs-based and equitable response.


Cash 101: Cash and Voucher Assistance Explained

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