The use of cash is now accepted, though not by all, as one of the tools in the humanitarian toolkit. However, how it is used in humanitarian action and how it fits within the humanitarian actor’s toolkit in 2025 will probably look very different than today. This is due to changes in the larger humanitarian environment as well as the natural evolution of the modality as its uptake increases. In light of this, as part of a project commissioned by The Cash learning Partnership (CALP), HFP held a Trends Analysis Meeting in order for cash transfer experts and other stakeholders to discuss how global drivers and transformative factors likely to affect humanitarian action might influence cash transfer programming’s (CTP’s) evolution in the future. Below is a summary of the most critical issues raised.
Global financial crises are likely to result in increased demand for more effective tracking of cash transfers and challenges to current norms for measuring impact. In addition, as the tendency to provide cash transfers via small scale, monitored interventions is likely to give way to larger interventions that are monitored less closely. It is inevitable that there will therefore be more instances of diversion, security incidents and corruption, adding to the drive for greater scrutiny of both cash donations and greater emphasis being placed on “value for money” approaches.
The expansion of what is thought of as humanitarian action, and the blurring of boundaries within and between the spectrum of humanitarian aid and development, will likely see calls for responses to cut across sectors and bridge across the increasingly artificial divides of preparedness, response, resilience and development. This could lead to an increase in national platforms or consortia that bypass UN agencies and facilitate cross-sector coordination.
Because cash as a tool “does not care”, CTP could be used to achieve aims across sectors and the disaster management spectrum, but opportunities and challenges arise to how this would be operationalised. There will need to be an evolution of thinking around CTP: from tool-centric to objective-focused. Without this evolution, it will be difficult for organisations to justify CTP in the context of their mandates and objectives. In addition, funding streams will need to be flexible in order to allow for the full potential of cash to bridge the sectoral divides. But are donors willing to accept a much broader set of objectives for their funding?
Proliferation of involvement of non-traditional actors, including non-western NGOs, national and local private sector, militaries, Diasporas, regional organisations, non-state actors, and non-western donors, will change perceptions about who should be leading and supporting which function in CTP. This could generate greater competition between ‘traditional’ and ‘non-traditional’ actors, and it is possible that local and national actors, including the private sector, military, and civil society, will be increasingly considered a ‘port of call’ for governments when it comes to using cash, rather than the international humanitarian system. In addition, as new actors continue to engage, current assumptions about the application and universality of humanitarian principles will likely be increasingly challenged, especially with the increasing role of the private sector.
The increasing use of country systems will likely result in increasing focus on national capacity to manage CTP, and less dependence on the international system. Several governments already distribute cash when responding domestically to disasters, including Pakistan, China, Sri Lanka and the US, and others may experiment with this approach, especially through national social protection schemes. Governments may explore what role (if any) international humanitarian actors should play in such responses, and international humanitarian actors will have to consider how best to engage with government-based systems and ensure impartial selection of beneficiaries.
With the emergence and expansion of funding streams such as pooled funding, private financing, and remittances, how funding of CTP takes place will evolve. For example, individual-to-individual transferring of cash may become more prominent with technological advancements such as crowd-sourcing. As beneficiaries increasingly have a more direct link to cash providers, will beneficiaries start pushing back against what donors feel is important in a crisis? Emerging donors may opt for more fluid approaches driven by mutual-interest rather than adherence to more long-standing ties to traditional humanitarian coordination mechanisms. In particular, INGOs will need to consider and identify what their added value is in specific contexts more carefully.
Following this meeting, HFP is currently examining whether the current and emerging actors who implement, coordinate, and fund CTP are prepared for these future issues. What changes will be needed in order for these challenges to be overcome and opportunities taken advantage of, and who should lead these actions? An update of the project’s findings will be available at a later date.
Lucy Pearson, HFP