Humanitarian cash assistance at a crossroads, warns new report

Humanitarian cash assistance at a crossroads, warns new report 

Unlocking the potential of cash assistance to meet people’s humanitarian needs will require greater effort and change. 

• In 2022, $7.9 billion was transferred as cash or vouchers to crisis-affected people – a 41 % increase from the year before. 
• However, as a percentage of overall international humanitarian assistance the growth of Cash and Voucher Assistance (CVA) is relatively small. CVA accounts for 21% of international humanitarian assistance, an increase of 7% since 2017. 
• There remains huge potential to increase the volume of CVA and to make it more people centred, but it will require concerted effort and change across the humanitarian system. 

The latest State of the World’s Cash report, published by the CALP Network, highlights that the volume of cash and voucher assistance has grown dramatically, but it could be at risk of stalling. 

Providing people with Cash and Voucher Assistance (CVA) during disasters and emergencies means that they can decide for themselves how to meet their needs in the face of crises. And a growing body of evidence supports the fact that people usually prefer to receive aid in this way. 

The use of CVA has been widely hailed as a key component of more people-centred aid. In 2022, $7.9 billion dollars was transferred as cash or vouchers to crisis-affected people – a 41 % increase from the year before.  

This is a huge change in humanitarian action given CVA as a form of humanitarian assistance is a relatively recent phenomenon. CVA only gained attention in the wake of the 2004 Tsunami, and then seeing a major increase in use following the World Humanitarian Summit in 2016.  

CALP’s Director, Karen Peachey explains some of the reason behind this growth; “One – people prefer it. Cash in a crisis can mean the difference between getting what you want, or what someone else thinks you want. Two – humanitarian policies have gradually changed to support its increased usage. Three, it’s effective and can be rolled out relatively quickly, and efficiently: which is why we saw so many governments and humanitarian agencies around the world turning to cash as a central part of their response during the COVID-19 pandemic.” 

However, looking at the growth of CVA in dollar terms alone doesn’t provide the full picture: It’s true that CVA volume has increased, but so too has overall humanitarian assistance. In percentage terms the growth does not look so impressive. Currently CVA accounts for 21% of international humanitarian assistance, an increase of 7% since 2017.  Yet, research shows that if used whenever and wherever appropriate it could form up to 50%. 

So why does CVA not make up a larger proportion of overall aid? According to the report the answer lies in standing back and looking at the whole picture – the CVA ecosystem is large and complex – every percentage point increase in the use of CVA needs multiple changes within organisations, with changes to systems, skillsets, and ways of thinking. Added to that, there are changes needed between organisations – who does what, how they work together and how they coordinate.  

CVA is not an island – it exists as part of the wider humanitarian system which itself sits within financial, political and other systems, all of which offer incentives as well as barriers to change. What’s clear is that the use of CVA can increase, as research shows and, indeed, as the response during COVID-19 demonstrated. Yet, after the COVID-19 response its use slipped back – the reasons for that are harder to unpack. 

Peachey continues; “The truth is that systemic change takes time. After making the big commitments that offer a vision of change, it’s then about changing mindsets across many teams and altering a myriad of systems and processes. And this needs to happens not just in one organisation – but in every single organisation that makes up the humanitarian system. Translating commitments into system wide change is not simple.” 

The report also offers solutions towards a more rapid and decisive growth in CVA. For example, stronger linkages between CVA and other forms of financial assistance, including social protection, offer the potential for greater efficiency and effectiveness.  

Social protection systems, (which are normally led by governments), help people to cope with crises and shocks, find jobs, invest in the health and education of their children, and protect the vulnerable populations. The possibility to link CVA more closely to these mainstream systems represents huge opportunities for growth. The report stresses that it’s not a simple ‘fix’ and won’t be appropriate in all situations, but if investments are made this could lead to a break-through. There are gains to be made in many other areas too. 

The volume of CVA (i.e., the amount of money transferred to people in crisis) is not the only issue. Improvements are also needed in terms of quality. Peachey explains; “It’s no good providing vouchers if people prefer cash, or providing cash in a way people don’t like. We need to be thinking more about quality from the perspective of people on the receiving end of assistance not just the metrics of organisations.” The report highlights good practices around quality, such as co-designing programmes alongside people in crisis, and basing programme design on a robust understanding of the context.  It highlights that to reach the most vulnerable 20% of people, CVA must be specifically tailored to meet their needs and help connect them with other services as required. Peachey adds, “There’s need for flexibility – a one-size-fits-all approach does not work. People are different. Contexts are different. Preferences vary. As humanitarians we must remain willing to innovate and adapt programmes based on what crisis-affected people tell us. There is so much good practice already out there, but also much to reflect on”. 

Finally, the report sounds an alarm bell against the risk of complacency: There remains huge potential to increase the volume of CVA and to make it more people centred. Some feel that the use of CVA is now accepted and the ‘battle is won’. This is risky. CVA will not reach its potential unless further, substantive, changes are made to the underlying structures, mindsets, and day to day processes of the humanitarian system. This requires ongoing collective effort and commitment from all stakeholders. 

The State of World’s Cash 2023 provides a neutral, authoritative, and insightful picture of the humanitarian sector. It provides a compelling message to all humanitarians to work collectively towards an increase in the use and quality of CVA, to improve aid effectiveness, and increase choice and dignity for people in crisis.  

ENDS 

For further information or to arrange an interview please contact Jo-Anne Witcombe.