Unicef Cash Grants in Emergencies

UNICEF CASH GRANTS IN EMERGENCIES

Summary of Guidance and Lessons Learned

Drawing from a study of field experience, UNICEF-EMOPS has developed a draft guidance note on the use of cash grants to affected populations in emergencies. Based on this draft, EMOPS is offering technical support to design a cash grants programme in Haiti. The modalities of support are flexible and will be adjusted according the needs of the CO team.

Contact: MadsOyenand Claire Mariani, , Humanitarian Policy Section, EMOPS

What is a Cash Grant Programme?

Cash grant programmesare a means of ensuring that basic needs are met and thus reduce suffering and save lives. Theyprovidedirect purchasing power to vulnerable and crisis-affectedhouseholds. They do so byproviding assistance in the form of cash grants with no obligation to repay the grants. They can be either unconditional grants with no requirements on how the cash is used, or they can be provided based on certain conditions defined in the programme.

Why should UNICEF use this Approach?

Because of its versatility, cash can be an appropriate intervention in all stages of an emergency – from pre-crisis preparedness, during relief and early-recovery, through to recovery.

Cash grants can offer tangible benefits for children in the following ways:

Lead to direct expenditure on children’s health and education, and contribute to household spending on food, fuel, water, and shelter
Increase the purchasing power of households, promoting dignity and empowering them to make their own decisions, adapting assistance to their individual needs and cultural requirementsin keeping with UNICEF’s commitment to promote active participation of affected populations.
Transfer large resources directly to children and women in a short period of time
Prove responsive to the changing priorities of affected households.

For effective use of cash grants, strongprogramme communicationsis a necessary complement.

Challenges and Opportunities for UNICEF

As a relatively new form of intervention for UNICEF, the provision of cash grants presents both challenges and opportunities. Some of the challenges might include:

Gender: some critics fear that cash may disadvantage women if they have little say in how it is spent. Cash is often most effective when directly targeted and placed under the control of women, and empower them within the household and community.
Security and corruption: providing cash to affected populations may make them vulnerable to being exploited, but might also be less visible than in-kind alternatives.And if captured by elites or armed groups, cash risks contributing to a war economy but when distributed directly to those affected, it may actually pose less of a risk than in-kind alternatives, which are subject to looting and corruption during procurement and transportation.
Emergency response and early recovery - cash schemes in emergencies may lay the foundation for conditional cash grant schemes in early recovery phases.

Examples From UNICEF’s Experience

Following the 2004 tsunami, UNICEF observed how cash transfers allowed households to make spending decisions according to their specific circumstances, and to address the diverse needs of children in the household.
In Indonesia after the 2004 tsunami cash was provided with a child protection agenda of preventing secondary separation, as families who were caring for separated or orphaned children often did not have the economic means to continue to care for additional children.
Cash grants were used as a response in Georgia in 2008, an example where cash was successfully used with no prior planning.
Cash has been used in DR Congo, showing that cash can be used effectively in countries with limited market opportunities.

How can UNICEF use this approach?

UNICEF has a role both in directly supporting cash grant programmesand in advocacy for the use of cash grants with a focus on children and women. In direct support to cash grant programmes, UNICEF’s primary role is to:

Contribute to program planning and design;
Monitor program implementation;
Monitor adherence to best practices in financial accountability and control; and
Evaluate the outcomes and impact of the program.

Partner selection, accounting and risk management

Evidence and supporting documents needed for accounting should be discussed with EMOPS and Audit, as the draft guidance is not sufficiently detailed on this point. However, the requirements are not an impediment for cash grant programming. Risk management strategies must be employed and documented in accordance with UNICEF's Risk Management Policy.

Principles for Using Cash Grants

The provision of cash grants needs to be guided by UNICEF’s humanitarian principles and CCCs. In addition, core principles for cash grant programmes include the following:

Households should be targeted based on vulnerability
Households should be targeted and not the individual child to avoid stigmatization and to foster a protective environment
Child headed households should be included, where appropriate
Ensure maximum simplicity in the design, especially in low capacity contexts
Ensure programme design and implementation are assessed through participatory approaches including a focus on the principle of “Do no harm”
Ensure that in the longer term, cash grant programmes are included in an integrated social protection approach
Where possible, implementation should be done through, or in close partnership with government, and should link with efforts to strengthen social service systems.

Necessary conditions

Cash grants are one option available to UNICEF to complement more traditional emergency response initiatives. For these, the following conditions should be in place:

Functioning markets;
Access to markets for the targeted population;
Adequate safety for implementation;
Sufficient quality of available goods; and
The ability of affected populations to participate in planning and design.

Coordination

To avoid duplication in administrative systems and in order to capitalize on economies of scale, coordination with national and local government, and other agencies and partners is essential.

Monitoring & Evaluation

Monitoring of cash grant programmes must include: monitoring of results consistent with CCC performance monitoring and requiring ultimately outcome level indicators; process monitoring to ensure that guidelines and procedures are being applied as intended which requires structured systematic field visits including consultation with affected populations; financial spot checks and audits. Given the high profile and perceived high risk of cash grant programmes, independent evaluation must be planned.

Inappropriate substitution

While cash grant programmeshave some distinct advantages, they should not substitute for the essential services described in the CCCs – such as the provision of protection and services. Cash grants should be used with caution where it replaces non-food items that help reduce public health risks.

Lessons Learned

General Lessons on Cash Assistance

In addition to the quantifiable benefits, cash can also enhance a sense of empowerment and dignity among recipients. Cash-for-work projects can produce additional psychosocial benefits as people go back to destroyed areas to mourn, to take stock and to think. The physical activity of clean-up can also be welcome. (DFID, 2005, p.15). It was found that 90% of respondents would have preferred cash to non-cash relief in the first three months after the tsunami. (Scheper et al., 2006, p.96)
Unconditional rather than conditional cash transfers can be better in states where services are weak, including in emergencies; monitoring may be required for conditional cash transfers and may be problematic in crises.In very low-income countries, the quality and delivery of social services are often poor, and could be further compromised in emergencies. The potential for conditionality to work effectively under these circumstances is weak. Reviews of unconditional cash transfers in emergencies, such as cash-for-work programmes, show that the household is better able to meet basic consumption needs with unconditional cash transfers.

Risks

Risks of cash assistance undermining informal or traditional support systems are low, even when formal social protection is lacking, and can in some cases actually aid government capacity building.
Targeted cash assistance can be divisive and community participation in defining criteria is therefore essential for mitigating tension. Cash targeting involves identifying a group of beneficiaries according to specified selection criteria. (SCUK, HelpAge International & IDS, 2005)
Misuse and corruption is no more prevalent in cash transfers than for commodities and in-kind aid. (Gore, 2006, p.28-29)

Targeting

A scheme does not have to target children in order to reach them or to have positive impacts on their well-being. In these programmes, two important defining factors are: the duration of the cash transfer and the child’s access to the cash transfer through a caregiver, i.e. the adult beneficiary. (SCUK, HelpAge International & IDS, 2005, p. 26)
Cash transfers targeted at women can have a stronger overall impact on development indicators, particularly on girls. For instance, studies from Brazil and South Africa report that when a woman received old age pension, the impact on nutritional status and school enrolments among co-resident children was stronger, particularly for girls (Barrientos & De Jong, 2004).
Targeting should not rely on purely technocratic or economic parameters, but rather use criteria that are in step with local culture and norms and use methods that are participatory. (Oxfam, 2005b)

Security

Security problems of cash transfers can be less serious than assumed and risk minimized by various distribution mechanisms such as bank or money transfers.The concern is that staff who implement cash programmes and the recipients of cash transfers may be exposed to increased level of threat. However, food may not be as easy to loot as cash, but food convoys are visible and easy to attack. Cash deliveries are less easy to see. (CretiJaspars, 2006)
In some cases, where local banks or money transfer systems are functional, cash may be the more secure alternative. In Afghanistan and Somalia, the local hawala (money transfer) system was used to distribute cash; in Ethiopia, SCUK sought insurance coverage against losses in transporting cash to projects in areas where there were no banks. (Harvey, 2005)

Timing

Cash transfer is most beneficial when being applied to the transitional phase between survival and livelihood rehabilitation. In the tsunami experience, a degree of sustainability will be ensured by transitioning from direct cash transfers targeted to children to income (livelihood) support for the most vulnerable households (UNICEF, 2005a), since agricultural and farming livelihoods and productive employment were greatly affected by the tsunami. The cash transfer project represented a transitional phase to fill the gap between a situation of survival to a more regular, normalized situation. (Gore, 2006, p.42)

Possible impacts on local population

In low-income countries, emergency cash assistance may only lift recipients from critical to moderate poverty. While cash transfers do raise incomes directly, this is often not enough to lift people above the poverty line, though it can help reduce the severity of their poverty. The pilot cash transfer scheme in Zambia provided a monthly cash sum which translated to a second meal for the household if the entire cash transfer is spent on maize. The transfer may not lift the households out of poverty, but rather assists in survival. (Schubert, 2004)
A potential result of injecting cash into the local economy is an increase in prices of goods. The cash transfer can cause a marked and sudden increase in the demand for goods, with the result that traders are encouraged to charge higher prices. This can hurt both beneficiaries and non-beneficiaries of cash transfers. Beneficiaries will get less for their money and non-recipients of the cash transfer will be worse off since they are faced with higher prices and no change in their income. In-kind alternatives do not cause inflation, though they may distort the market in other ways; for instance, food aid may depress the price of food, thus hurting local producers." However, the net result of cash assistance may be more food for families. "The key point is that inflation is not unequivocally a negative effect, and that under the right market conditions, the risk of inflation is low." (Gore, 2006, p.32)

Education Sector

Cash incentives for facilitators and teachers can be a crucial measure for ensuring teacher attendance in community-based schools. In Afghanistan, economic instability undermined efforts to improve education. Many teachers stopped working because the communities could not support them as intended. The introduction of cash incentives to teachers gave them more economic stability to perform their job. In addition, cash given to facilitators has improved education monitoring and reporting also. (Wirak, 2008)

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