Scaling up Cash-Based Assistance with ECHO: Common principles for multi-purpose cash-based assistance
The global humanitarian context continues to present donors with a challenging environment as the intensity and range of crises and levels of vulnerability take on new forms and magnitude. The displacement of large swathes of populations, combined with an unprecedented number of system wide crises and their protracted and often forgotten nature results in some of the most difficult and tragic contexts seen in recent years.
The EU is committed to responding to humanitarian crises in the most effective and efficient way possible, tailoring its response to the individual context. Increasingly a response that addresses needs across sectors is required and the manner in which assistance is delivered can either facilitate or hinder this. A multi-sector cash-based response has the potential to provide assistance across sectors and to contribute to meeting the basic needs of those affected by a crisis, whatever they may be, with flexibility and dignity. However, providing assistance in this way challenges current practice – it demands inter-agency coordination and cooperation with different partners, improved and harmonised targeting, robust indicators and a monitoring and evaluation system.
The EU, together with some of its Member States has been at the forefront in the development and the use of cash-based responses in humanitarian contexts. In June 2014, DG ECHO convened a meeting of European donors in Brussels to discuss approaches to multi-purpose cash transfers, both from an operational and policy perspective. It had a twofold objective: on the one hand, to hold a Lebanon specific reflection on the use of cash transfers by way of a response to the influx of refugees in the wake of the Syria regional crisis and on the other hand to look at multi-purpose cash transfers from the wider policy development angle.
One of the outcomes of the June workshop was an agreement to draft together a concept paper outlining common top line principles. Between September 2014 and March 2015, EU Member States, Switzerland and Norway, ECHO colleagues, with contributions from a wide group of humanitarian actors and stakeholders (NGOs, the UN, international organisations and other donors) drew up a set of principles that should apply to cash-based assistance. The principles aim to guide donors and humanitarian partners alike on how best to work with multi-purpose assistance.
The Common Principles – a summary
Common Principles for Multi-Purpose Cash-Based Assistance to respond to Humanitarian Needs were developed to guide donors and humanitarian partners alike on how best to work with multi-purpose assistance. They stress the efficiency and effectiveness aspects and recall key issues such as the need to uphold the humanitarian principles and to ensure accountability. They recognize the importance of context specific solutions and the need to select the delivery modality that suits best. The principles introduce the notion of a humanitarian response across sectors to address basic needs, with dignity, flexibility and choice for beneficiaries. They note the implications of such an approach for programme design, which should be joined up, with enhanced coordination among actors and improved targeting. The principles also make the link with longer term resilience building and national social protection systems.
Box 1 – The 10 principles
|§1.Responses to a humanitarian crisis should be effective and efficient, responding to the most pressing needs of affected people and representing the best value for money
§2.Humanitarian responses require needs to be met across multiple sectors, assessed on a multi-sector basis and provided to meet basic needs
§ 3.Humanitarian assistance must be provided in a way that enhances protection and upholds the safety, dignity and preferences of beneficiaries
§ 4.Innovative approaches to meeting needs should be fostered
§ 5.Multi-purpose assistance should be considered alongside other delivery modalities from the outset – we need to always ask the question “Why not cash?”
§ 6.A combination of transfer modalities and delivery mechanisms may be required depending on the nature and context of the crisis and used at various stages of the crisis – an optimum response may require them to be used in combination
§ 7.An appropriately detailed assessment of the capacity of markets and services to meet humanitarian needs must be carried out at the outset of a crisis, integrated within the overall assessment and regularly monitored and reviewed
§ 8.Agencies involved in responding to a crisis should establish, from the outset, a clear coordination and governance structure and streamline assessment, beneficiary registration, targeting and monitoring
§ 9. Linkages with national social protection systems need to be exploited whenever possible
§ 10.Accountability considerations require the use of robust impact and outcome indicators, which should be limited in number and which will be a combination of agency specific and broader indicators
Council Conclusions were adopted in June 2015 and provided political endorsement for the common principles, paving the way for greater advocacy with other donors and ECHO’s partners, as well as in view of the World Humanitarian Summit.
In endorsing the common principles, EU Member States focused on the innovative nature of multi-purpose cash-based assistance and its potential to achieve greater effectiveness and efficiency. They saw cash-based assistance and the ideas highlighted in the principles as central to the World Humanitarian Summit discussions.
The Council conclusions recognise that despite a compelling and ever-increasing evidence base, only a small percentage of humanitarian assistance is currently cash-based. There is therefore significant scope for increasing the use of multi-purpose cash-based assistance in humanitarian responses, depending on the context.
The example of food
One example of how the international community is evolving towards multi-purpose assistance is the shift from a food aid to a food assistance approach. The Principles apply to humanitarian assistance as a whole, but take food assistance as the starting point. This is due to the scale of food assistance in humanitarian contexts, the perception by beneficiaries of food assistance as a means to meet other basic needs and to policy developments, which have changed the approach to food assistance and how it can be delivered.
Whereas cash was initially seen as a substitute for food and a means to buy it, it quickly became apparent that cash is an efficient way to meet basic needs, whether food, non-food or services. Cash intended to meet food needs will in effect be used by beneficiaries to respond to a variety of their most pressing needs, of which food will certainly be one. A shift to cash-based assistance has been supported by the development of reliable delivery mechanisms – telecommunication and other technologies that have greatly improved the efficiency and security of cash delivery.
These principles are expected to complement existing guidance on cash-based assistance and policy positions on those thematic areas which lend themselves to a multi-purpose approach. ECHO’s guidance on cash and vouchers is one such tool. Food assistance is perhaps the natural starting point, but the thrust of the principles is precisely to move away from a one-dimensional response and towards one that uses the tools at the disposal of donors and humanitarian partners alike to address basic needs, whatever these may be. Multi-purpose assistance requires donors and partners to design responses that look at the totality of needs and not to divide these needs into sectors, which may fit neatly into the way humanitarian assistance is delivered today, but is not so meaningful for beneficiaries. Multi-purpose assistance puts the needs of people first, designing a response that suits people, not the humanitarian system.
The principles urge donors to provide assistance to their partners in a form that allows them to respond to the needs of beneficiaries with flexibility and in the most appropriate way possible. Recipient countries, on the other hand, should ensure that government policies are modality neutral and that levies or taxes are not applied to the assistance received by beneficiaries, regardless of how it is delivered.
Donors and their partners are encouraged to take these principles into account in designing and implementing their responses to humanitarian crises. The principles should also be used to reassure host governments that assistance provided in this way is not only effective and efficient, but is a way to meet needs responsibly, while helping to foster recovery and resilience.
The principles have already been widely disseminated – ECHO has engaged with the donor Community through the Food Assistance Convention, through policy statements delivered during the regular sessions of the World Food Programme Board and through ad hoc events such as field missions and seminars, ECOSOC, etc.
The principles have also been referenced in the work of the High-Level panel on Humanitarian Cash Transfers, which was convened by DFID to examine the transformative potential of cash transfers for humanitarian responses and the humanitarian system. The panel has looked at the blockers to scaling up humanitarian assistance and the implications for the current humanitarian assistance architecture of scaling up cash and its final report is to be launched mid-September.
The principles are seen as a practical contribution to the World Humanitarian Summit – cash-based responses are seen by the EU as innovative and as promoting efficiency.
On a practical level ECHO, through the Enhanced Response Capacity budget facility, has supported WFP, the CALP Network and UNHCR in boosting their capacity to deliver cash-based responses. Should more innovative work on multi-purpose responses be needed, the EU is ready to support this.
There is good evidence to show that cash is an efficient means of delivery, particularly when it is at scale. Cash is also good at stimulating markets and perceived risks, such as diversion and misuse or potential negative intra-household effects or protection risks have not materialised. Evidence on effectiveness is less clear and sometimes specific outcomes are better achieved through the use of in-kind or vouchers – this should be taken with the caveat that outcomes and impacts are difficult to assess. The evidence base is already significant and ECHO will contribute to it with the publication, before the end of the year, of an evaluation of the use of different Transfer Modalities in ECHO Humanitarian Aid actions 2011 – 2014.
 Members are Australia, Austria, Canada, Denmark, European Union, Finland, Japan, Luxembourg, Russian Federation, Slovenia, Spain, Sweden, Switzerland and the United States of America
Main image: Allan Gichigi/Oxfam