In recent years, the use of cash transfer programming (CTP)1 in humanitarian assistance has grown significantly.
In 2016, we estimate that $2.8bn in humanitarian assistance was disbursed through cash and vouchers, up 40% from 2015 and approximately 100% from 2014. As this report describes, the move to CTP has strong roots and is set to continue. CTP is widely recognised as one of the most significant areas of innovation in humanitarian assistance, with huge potential to meet more needs, more efficiently and more effectively.
This has never been more vital. The gap between humanitarian needs and available funding has increased to over 40%4 . In recognition of CTP’s potential, many humanitarian actors, through the Grand Bargain5 and independently, have made public commitments to increase its use. These political commitments are welcome. But, they are not enough on their own. Despite the significant increase in CTP, it accounted for only 10% of humanitarian assistance in 2016, up by 2.5% from 2015.6 Realizing the transformative potential of CTP requires significant changes to established ways of working within institutions and collectively.
The change process is already under way. This report identifies specific steps that have already been taken, good practices to learn from and the priority actions necessary to accelerate progress. For example, donors, coordinating bodies and implementing agencies are actively integrating CTP into humanitarian programming.
They are updating their systems, skillsets and processes to make the best use of CTP. With the volume of CTP already measured in billions of dollars and still growing, the stakes are high.
The benefits of cash-based assistance have been shown to cut across multiple sectors. And many opportunities have been identified to align CTP with major reforms at every level, from achieving the Sustainable Development Goals and the 2030 Agenda for Sustainable Development,7 to strengthening social protection systems and realizing the UN’s New Way of Working.8 CTP has been actively linked to a host of other reforms such as: financial inclusion, the digital revolution, evolving coordination mechanisms, strengthening local leadership, enhancing dignity and accountability to affected populations, and improving monitoring and reporting of results.
At the same time, CTP is not a silver bullet capable of solving all the problems associated with aid. Rather it is one factor, among many, driving a wider set of reforms across the sector. However, the increasing scale of CTP is driving disruptive innovation by raising strategic questions for organizations about their role and function, and how different humanitarian stakeholders best work together. Answering these questions cuts across established ways of working and interests.
Different actors have overlapping goals and ambitions for CTP. Whether CTP is seen as a tool to realize wider reforms, an integral component of a related set of reforms or a straightforward good in its own terms, it is clear that the increasing scale of CTP is inextricably linked to the future of the humanitarian aid sector. The case for CTP has been made. It now remains to ensure the hard work is continued across humanitarian actors to realize the benefits and opportunities it offers.