Cash and Vouchers assistance (CVA) is used to distribute cash or a cash equivalent (i.e. vouchers for goods or services) to populations affected by a disaster. A cash distribution can take many forms such electronic cash transfers or the distribution of vouchers. Each method comes with advantages and disadvantages; for example, vouchers can ensure that people spend their allocation of cash on selected goods only but in some cases, it can severely restrict what they can buy. Cash assistance allows individuals or households to prioritize their own needs. Being given the choice of what to purchase in times of need does not only make sense, it also plays a vital role in preserving people's dignity.
Following a disaster, distributing cash can be a quick way to reach people. Cash transfers can serve as a temporary source of income or, in an emergency context, can be complementary to in-kind distributions such as food aid or non-food items. In addition to meeting basic and immediate needs such as water, food, and shelter, CVA can also achieve long-term objectives such as restoring or protecting livelihoods. Althought food aid and in-kind responses are dominant in humanitarian and emergency response, CVA is quickly growing. The emergence of new technologies and the possibility to collaborate with the private sector open new possibilities to increase the effectiveness and efficiency of humanitarian aid. For more information visit the Cash and Technology section dedicated on the Cash Hub.
The list below summarises essential feature of cash transfer programming:
[Source: Guidelines for Cash Transfer Programming - ICRC and International Federation of Red Cross and Red Crescent Societies 2007].
For more information on cash guidance of the International Red Cross and Red Crescent Movement visit the Cash Hub platform.
Download the Cash in Emergencies Toolkit.
What do I need to know?
Cash transfers are a quick and effective mechanism for providing resources for all sectors - not only by the food security and livelihoods sector, but by water, sanitation and hygiene (WASH); education; nutrition; health; reintegration/relocation sectors (Adeso 2012). In humanitarian emergencies, cash transfer programming (CTP) provides affected populations with the flexibility and freedom to define and prioritize their short- and/or long-term essential food and non-food needs. By placing cash directly into the hands of beneficiaries, CTP allows people to establish, or re-establish, their livelihoods and productive capacity by purchasing essential goods and services of their choice from their local markets and service providers. Humanitarian organizations have implemented a broad range of cash-transfer programs to meet relief and recovery needs in various situations. In the context of a natural disaster, cash-transfer programming can be undertaken during the following stages:
Pre-disaster: In preparation for a predictable shock or as part of a disaster risk reduction program.
Initial stages of a disaster: To meet immediate, essential food, non-food and income needs and/or protect/re-establish livelihoods and provide shelter.
Recovery or transition period: To help re-establish/support livelihoods and/or provide shelter or short-term [Source: ICRC].
Before undertaking CTP, it is essential to conduct a market analysis and needs assessment to first determine if CTP is a viable option and if so, to identify the best delivery option using context-specific analysis. The assessment should weigh the benefits and drawbacks of different delivery options, from the perspectives of both the delivering agent and the recipient.
- A functioning market.
- Availability of products regionally and/or nationally.
- Surplus production available within a reasonable distance of the affected population.
- Traders willing to participate (in a voucher programme) and with the financial capacity to purchase goods and the logistical capacity to transport them into the region.
- Geographical accessibility of shops/markets to recipients and a certain freedom of movement.
- No excessive taxation of goods (which may lead to increased prices or hamper the ability of the market to provide necessary items).
- A functioning and reliable system through which payments can be made to traders (voucher programmes) and/or recipients.
- A reliable recipient identification system.
- Political acceptance.
- Clear communication with communities.
- Existence of a clear withdrawal strategy.
- Acceptable security levels and awareness of possible threats to staff and recipients.
Source: © ICRC and International Federation of Red Cross and Red Crescent Societies 2007.
The integration of cash training in disaster preparedness and contingency planning is critical to rolling out cash-based programs in a timely and effective way. Increasing capacity and cash preparedness requires investment and a sustained commitment to training and investigating new tools before a crisis hits. For National Societies, achieving this level of investment requires internal advocacy and buy-in from high levels of leadership. Click here for IFRC's guidance material for National Societies to facilitate internal advocacy regarding cash transfer programming.
Effective preparedness in cash programming includes i) Ensuring that CTP is included in response strategy and policy, ii) Planning to work with others in CTP, iii) Preparing to manage beneficiary information, iv) Planning for monitoring and exit strategies, and v) Setting up implementation mechanisms in advance. Response times for CTP implementation can be significantly improved by establishing pre-agreements with service providers, establishing clear criteria for CTP assessments and market analysis, and adopting cash-based elements more systematically into contingency planning. Moreover, as the number of actors implementing CTP in emergencies and the scale of the programs continue to increase, so does the need for coordination around implementers and programming.
Click here for a more detailed look at IFRC guidance material on cash preparedness.
The IFRC offers an "Introduction to Cash Transfer Programming" course, which has been developed in partnership with CaLP (Cash Learning Partnership). The aim of the training is to build basic awareness of the issues associated with cash transfer programs as well as cover the key principles and conditions required to support the appropriate use of cash and vouchers. Check this course and many other opportunities for training regularly published in the Training section of the Cash Hub.
If you are a staff member or a volunteer of the Movement you can also access the Movement Online Cash Community to learn from other colleagues.
The Cash Learning Partnership has produced a latest version of Cash terminology in order to provide clarity and encourage common understanding and harmonized use of terms and definitions for cash and voucher assistance. Here are some key terms for your referral.
Assessment: Action aimed at understanding a situation in order to identify the problem(s), the source of the problem(s), and the consequences of the problem(s).
Agent: An entity or retail outlet where an e-cash transfer can be spent or redeemed for cash, and/or where e-cash account holders can perform other transactions. Different Financial Service Providers (FSP) -shuch as banks, mobile network operators or remittance companies - can have agents. Agents are managed by an FSP, not a humanitarian agency.
Basic Needs: The concept of basic needs refers to the essential goods, utilities, services or resources required on a regular or seasonal basis by households for ensuring long term survival AND minimum living standards, without resorting to negative coping mechanisms or compromising their health, dignity and essential livelihood assets.
Assistance to address basic needs might feasibly be delivered through a range of modalitites, including cash, vouchers, in-kind and servicers.
Cash and Voucher Assistance (CVA): CVA refers to all programmes where cash transfers or vouchers for goods or services are directly provided to recipients. In the context of humanitarian assistance, the term is used to refer to the provision of cash transfers or vouchers given to individuals, household or community recipients; not to governments or other state actors.
This excludes remittances and microfinance in humanitarian interventions (although microfinance and money transfer institutions may be used for the actual delivery of cash. The terms 'cash' or 'cash assistance' should be used when referring specifically to cash transfers only (i.e. ‘cash’ or ‘cash assistance’ should not be used to mean ‘cash and voucher assistance’). This term has several synonyms (see Cash Based Interventions, Cash Based Assistance, and Cash Transfer Programming). Cash and Voucher Assistance is the recommended term.
Cash Assistance: The provision of unrestricted assistance in the form of money - either physical currency or e-cash - to recipients (individuals, households or communities). The terms ‘cash’ or ‘cash assistance’ should be used when referring specifically to cash transfers only (i.e. ‘cash’ or ‘cash assistance’ should not be used to mean ‘cash and voucher assistance’).
Conditional cash transfer: Receipt of the cash transfer is conditional upon the beneficiary providing a service of some kind (such as work); on using a service such as attending a school or health clinic; or spending the transfer on an agreed commodity or type of commodity, such a shelter or restarting a business.
Economic security: A household or community is economically secure when conditions allow it to meet its essential economic needs in a sustainable way, without resorting to strategies which are damaging to livelihoods, security and dignity.
Evaluation: The systematic and objective assessment of an ongoing or completed operation, programme or policy, its design, implementation and results. The aim is to determine the relevance and fulfilment of objectives, as well as efficiency, effectiveness, impact and sustainability.
Market analysis: Research intended to understand how a market usually functions, how it has been impacted by a crisis and to identify the need for and most appropriate type of support. Research can include information on supply and demand, price changes and income/ salary data.
Monitoring: The ongoing task of collecting and reviewing programme-related information. The data gathered during monitoring should allow for programmes to be adjusted as necessary. A monitoring plan should be established during the programme design and based on the programme goals, objectives and activities.
Unconditional cash transfers: Cash transfers from governments or non-governmental organizations given without conditions attached to individuals or households identified as highly vulnerable, with the objective of alleviating poverty, providing social protection, or reducing economic vulnerability (see conditional transfers above).
Types of Cash Transfer
- Unconditional cash transfer: Unconditional cash transfers are given with no conditions as cash to how the money should be used. However, it is assumed that if basic needs have been identified in the assessment, the money will be used to cover these needs; if support to livelihoods or productive activities has been identified as a need, the cash distributed will be used for this. Unconditional (and universal) cash transfers are often used immediately at the start of an emergency.
- Conditional cash transfer: Conditional cash transfers are given on the condition that recipients do something (e.g., rebuild their house, plant seeds, provide labour, establish/re-establish a livelihood).
- Commodity or cash vouchers: Commodity vouchers stipulate the items (and their amount/weight) or services for which the recipient can exchange their voucher. Cash vouchers have a specific value and can define a service and an item or a range of items for which the voucher can be exchanged. Alternatively the voucher can allow the recipient freedom of choice as to what to purchase with their voucher. Combined vouchers (cash and commodity values) also exist. Vouchers can be exchanged in pre-selected shops, with specified traders/service providers or at specifically organized fairs.
- Cash for work (CFW): Payment for work on community or public works programmes which will improve or rehabilitate community services or infrastructure.Wages should cover basic needs, but be slightly below market levels to avoid competing with the labour market.
- Social assistance transfer: Repeated, unconditional, predictable cash transfers provided to longer-term vulnerable or destitute households or specific individuals (e.g., the elderly, pregnant women). These are preferably implemented in conjunction with government agencies and with requisite political support.
Source: © ICRC and International Federation of Red Cross and Red Crescent Societies 2007.
Get the latest videos and photos, case studies, and training materials contributed by practitioners from around the globe. Visit our Resource Library for more.