ISSUE 54 May 2012

Humanitarian Exchange Magazine

‘More than just another tool’: a report on the Copenhagen Cash and Risk Conference

by Erik Johnson, DanChurchAid

Caroline Berger/Oxfam
An emergency cash transfer programme run by Oxfam in Turkana, Kenya
 

This article reports on the key conclusions and outcomes of the Cash and Risk conference held in Copenhagen in December 2011. The aim of the conference was to take stock of the rapidly changing debate around cash-based responses in emergencies, address outstanding questions and further the discussion on areas of controversy.[1] As the largest gathering of policy and practice experts on cash transfer programming to date it was an important meeting, bringing together individuals from a broad range of perspectives, from practitioners to donors and independent researchers.

The state of cash transfer programming

While global statistics are not available on the funding of cash compared to in-kind responses, the number of projects has surged in a relatively short time. The World Food Programme (WFP) has rapidly increased cash programming in recent years, having financed $368 million in 2010–2011, and has set ambitious targets for expanding the volume of its cash-based assistance. Likewise, ECHO has rapidly increased the amount of cash transfer programming that it is funding, with 40% of ECHO-funded NGO projects including a cash component in 2010, compared to 20% in 2007.

The increasing use of cash and vouchers has been a quiet revolution in humanitarian assistance. The discussion is no longer about whether cash transfer programming is a legitimate intervention type, but about how best to use cash assistance, with increasingly sophisticated approaches being applied in various contexts, including some of the most dangerous and risky environments. Not that long ago, cash transfer programming was seen as a viable instrument in some circumstances, but concerns about security and corruption still dominated the debate. Research and project experience in Somalia, Chechnya and Myanmar have shown that cash programming is not only viable in conflict and high-risk environments, but that it can sometimes be a more effective, safer and less costly option than in-kind assistance. In settings where governments or armed movements oppose other interventions, cash may be the only method possible, as in Somalia, where Al Shabaab has banned the distribution of food aid in areas it controls.

‘More than just another tool’? Recent experiences with cash programming

At the Copenhagen conference, some posed the bold question of whether cash transfer programming promises to turn the prevailing paradigm of humanitarian assistance on its head by challenging the assumption that aid agencies know best what people affected by crisis need. Others described cash transfer programming as ‘just another tool’ to address basic needs, often with a focus on food security. Like food for work, school feeding or in-kind assistance, cash transfer programming is simply one possible approach; whether it is used depends on the circumstances.

There is a strong case to be made that cash is more than ‘just another tool’. The debate at Copenhagen went beyond the now well-established benefits of cash programming, such as flexibility, choice, supporting local markets and dignity for beneficiaries, to discuss topics related to emerging areas of practice. Throughout the conference, speakers shared experiences from the field and from research. Among the themes presented and discussed at the conference were the possibility of addressing malnutrition through cash transfers, gender in cash transfer programming, preparedness to implement large-scale cash transfers in sudden-onset disasters, how to use cash in urban emergencies, market assessments and analysis and coordinating cash-based responses. (All of the presentations are available on the conference website at www.cashconference.org.)

The debate on many of these areas is still new, and in some cases much research remains to be done in order to draw concrete conclusions. For example, gender is a highly nuanced and difficult factor in the household economy; the simple assumptions that women in highly marginalised societies are hard to reach or that distributing cash to women will necessarily empower them are now being challenged. Experiences presented at the conference from Pakistan and Indonesia, by Church World Service and Oxfam GB respectively, put both of these assumptions into question. Their experience showed that simply ‘including’ women is not enough. One needs to have a detailed and nuanced understanding of gender dynamics, and how they may change after a cash intervention.

Another emerging area of research is urban cash transfer programming. Using cash to respond to humanitarian crises in urban areas is often thought to be difficult due to targeting challenges, insecurity and the perceived risk of theft. New research from the Danish Refugee Council suggests that cash-based programming in urban emergencies can help to restore livelihoods more quickly by increasing recipients’ purchasing power and their capacity to restore productive assets, and in many ways may not only be more relevant, but also may be easier to implement than in rural contexts. Cash transfers can also provide incentives to collaborate more closely with local government actors and private sector actors, as well as to align cash programmes with municipal priorities and longer-term urban development plans.

While cash used to be labelled a programme innovation, it is now considered a means to enable innovative programming. The question is not either cash or in-kind assistance, but how the two may combine to achieve programme objectives or stand on their own, depending on the circumstances. One of the most revolutionary uses of cash presented at Copenhagen involved unconditional grants to communities. This approach was pioneered in Myanmar after Cyclone Nargis in 2008, and has since been used again in Myanmar after Cyclone Giri, and in Côte d’Ivoire.[2] Communities recovering after disasters were given grants of several thousand dollars to purchase whatever they needed. The only condition was that the purchase somehow be related to disaster recovery. Typically, communities bought food immediately after the disaster, and agricultural assets later. Called ‘Pang Ku’, the project in Myanmar was led by Save the Children UK and funded by DanChurchAid, Christian Aid and others at a time when civil society in Myanmar was just starting to form and the vast majority of post-Nargis assistance was being provided in-kind.

The Pang Ku approach found that community grants fostered social cohesion after disaster, rather than reinforcing or fuelling social divisions, as typically happens following targeted distributions of in-kind items. The unconditional community grant approach also led to more timely and effective targeting. By ‘crowd sourcing’ needs identification, communities were consistently two to three weeks ahead of agencies in identifying the next phase of needs. In one example, Pang Ku project staff announced at an inter-agency coordination meeting that communities no longer needed rice, but buffalos for cultivation. It was several weeks later, after completing their distributions and subsequent needs assessments, that other agencies verified the same needs, and made the same shift from in-kind food to agricultural assets.

This and many other examples in the debate and discussion at the conference reinforced the idea that cash transfers are pushing the boundaries of humanitarian response, as new programme approaches challenge many of the assumptions underpinning aid. In particular, cash transfers can shift decision-making power from the aid agency to the recipient. This raises questions around how much humanitarian actors typically trust recipients, defer to local knowledge and are willing to respect the agency of conflict and disaster-affected people, and who can best determine where these boundaries lie. For all of the rhetoric about putting affected populations in charge, we are often still reluctant to relinquish power for fear that cash will be spent in ‘anti-social’ ways, despite all the research and experience to the contrary.

Moving forward

While the current state of global discussion around cash transfers might suggest that there is widespread acceptance of the use of cash in emergencies, there is still a great deal of work to be done in practice. Despite the growing body of evidence, cash transfers are still a new modality in many parts of the world. Like many INGOs, DanChurchAid works primarily through partners. Cash transfer programming is a relatively new approach for us and many of our partners, and building our capacity to use cash transfers will require training, awareness raising, pilot projects and a tolerance for mistakes. Although there is progress in policy-level discussions, there is a need for continued donor support of initiatives like the Cash Learning Partnership (CaLP), to ensure that more humanitarian actors have the tools and shared practice they need to implement cash transfers effectively.

The wide range of experiences and contexts discussed during the Copenhagen event demonstrated that it is impossible to make generalisations about how cash transfers will play out in any given context or community without detailed local analysis and understanding. In this regard, cash is like other types of assistance; international agencies need in-depth local understanding and presence, in addition to some basic knowledge about the tools to implement cash transfer programmes.

The development of tools and skills for cash transfer programming needs to be supported by continued debate and sharing of practice, as is currently taking place in the CaLP D-group online discussion forum.[3] This type of broad, evidence-based discussion is what eventually led to the development of the Humanitarian Charter and Minimum Standards in Disaster Response. We also need to ensure that the tools developed are simple, easy to use and few in number. A plethora of tools may have a harmful effect on uptake and application, and make it more difficult to capture best practice and ensure effective coordination. Donors should continue to fund research and initiatives that promote good practice and summarise what works in accessible and appropriate tools.

Many of the systems that underpin prevailing approaches to humanitarian assistance are not necessarily geared to cash transfer programming. For instance, unconditional cash transfers throw a spanner in the works of the logical framework. When filling out a log frame, how can project managers provide clear indicators of a SMART change when they do not control what that change will be? Some affected people will be most in need of food, while others will need to buy medicine or pay off debts. Many will need cash to meet a combination of needs. Given these uncertainties, measuring impact – and convincing donors to fund proposals – will require a different set of policies and tools than the ones we have now, which are geared to specific objectives and outcomes, focused on targeting the most vulnerable. We certainly cannot give up on trying to achieve a specific change, but if we continue to insist on presupposing what that change will be, rather than letting communities take ownership and leadership themselves, then we will not exploit all the benefits that cash transfers offer. This is where cash transfer programming offers a potentially radical new way of implementing humanitarian response, and the biggest challenge to the way we currently think and work. Unconditional cash grants – to groups or individuals – present both some of the biggest challenges to our current systems, but also the most promising potential for humanitarian response that is more effective and efficient. At the same time, however, cash transfers may not be relevant in every context, or the solution to every problem. One area where current research is yielding important findings – and where further research is needed – is in identifying where and how cash can play a complementary role, alongside in-kind assistance.

While donor representatives at the conference expressed their willingness to fund large-scale unconditional cash transfers as long as they felt that the potential risks had been evaluated and transparently communicated, the reality is that cash transfer programmes are often still subject to conditions, either pre- or post-transfer, and implemented with disproportionately high levels of control to mitigate the perceived risk of misuse, diversion or fraud. The reluctance of donors to fund cash transfers early on in the response to the famine in Somalia – despite the availability of reliable market data, recipients’ preference for cash and the existence of a proven payment mechanism – shows that donors are still cautious. Addressing this is going to take champions – including at agencies like my own – to promote cash transfer programming internally and with partners, as well as to act as repositories of knowledge and expertise. At the field level, some ECHO Technical Assistants are asking why cash was not considered for a particular operation. I expect that we will be hearing more of this in the future.

More than ever before, there is an established consensus amongst humanitarian policy-makers and agency staff that cash can be an effective tool of humanitarian assistance, and cash programmes will continue to expand in number and scale. This has repercussions for NGO capacities; we need new skills, systems and tools, and above all a change of mindset. But the revolution has started, and it will not be turned back. Events like the Copenhagen conference are a key part of this change. Whether individual aid agencies and aid workers join the revolution now or later, one thing is certain: cash transfer programming is here to stay.

Erik Johnson is Head of Humanitarian Response at DanChurchAid, a member of the ACT Alliance.


[1] The Cash and Risk meeting was co-hosted by DanChurchAid and Danish Red Cross, sponsored by the Cash Learning Partnership (CaLP), funded by the Danish government and facilitated by the Overseas Development Institute. For more on the Copenhagen Cash and Risk Conference, including the programme, presentations and Conference Report, see www.cashconference.org.

[2] Information on the Myanmar project can be found in the CaLP D-Group library. See http://www.cashlearning.org/resources/library.

[3] See http://next.dgroups.org/groups/CaLP/join.

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