Enhancing our efficiency: Why we give cash

Why has giving people money become such a core part of humanitarian aid?

The evolution of humanitarian aid is fascinating. Ten to twenty years ago, the conventional wisdom held that aid providers knew what was best for the communities they served. We'd deliver a standard basket of goods—usually food. But we quickly learned that this approach fails to address the diversity of needs in reality.

If you give a parcel of rice to 10,000 people, what about the family whose higher priority is buying medicine for a sick child, or the family who desperately needs materials to repair their shelter? You can't meet diversity with a single type of aid.

The ability for people to choose how they meet their needs has proven to be highly effective. The whole rhetoric has switched, now donors are routinely asking, why aren't you distributing cash?

And this approach is also fundamentally about dignity, correct?

Absolutely. It’s hard to truly put yourself in the position of someone receiving assistance, but with cash, they can instantly plan and prioritise spending in accordance with their actual, immediate needs.

Receiving cash is significantly more dignified than simply queuing for a standardised parcel of aid. It’s much more empowering because it respects the recipient's ability to make decisions for themselves.

Is there evidence that cash assistance positively impacts local markets?

There is extensive evidence of positive impact. Studies from Pakistan to Haiti show how money filters down through the local economy as people spend it on goods and services—this can also create employment opportunities.

However, we must be extremely cautious. Cash can have a devastating impact on a market if the market lacks the capacity to meet increased demand. If demand skyrockets and supplies can’t be restocked quickly, it can cause artificial inflation, making basic products unaffordable for people who didn't receive cash assistance. This is why we must always conduct a thorough assessment to determine if cash is the right form of aid for a specific context.

How do we ensure people spend the money on their needs and not, for example, on alcohol or weapons?

If you go back 20 years, cash was considered far too risky for precisely these reasons. However, it was heavily piloted after the tsunami response in 2004, and now we clearly understand the risks.

The evidence is overwhelming: if you correctly identify and target a population with high levels of genuine need, they will spend that money on their needs.

If the money is not spent in accordance with the project objectives, then the fault lies with the agency's targeting process, not the recipient. Furthermore, even if you give people a non-cash item, they can easily sell it for cash to buy what they need. You will sometimes find humanitarian aid being sold in local markets.

What changes have you observed in the lives of people who receive cash?

There is always a very visible, immediate impact. If you support a household with cash for six months, you will see a clear improvement in food consumption and health.

I'm a "cash person," so this might sound strange, but I have to say: the idea that we can just throw cash into a community for three months and expect the world to stop spinning is naive. That is why we view cash as a complementary form of assistance. It must be paired with other, more sustainable, long-lasting interventions in livelihoods, education, and rehabilitation of health facilities.

At People in Need, we have a dual mandate—humanitarian assistance and development cooperation—which enables us to connect emergency relief to long-term development. We also increasingly focus on Anticipatory Action: providing assistance before a crisis fully unfolds, enabling people to take the necessary measures for their own survival, which promotes a more dignified response and reduces suffering.

How do we decide whether to distribute cash or use vouchers?

We generally choose vouchers only when we are concerned about the circulation of cash in a particular area, often due to insecurity. There are places where people cannot safely keep money i.e. because of an increased risk of theft.

In such cases, people receive vouchers with set monetary values that they can redeem at specific, pre-engaged local shops. We then pay the vendors, thus controlling the flow of cash and providing greater security for the recipients and our team too.

We usually distribute cash in several rounds. Why not give people the whole amount at once?

We do sometimes give lump sums—in Ukraine, for example, we gave people money for up to six months. The amount is calculated using what we call the Minimum Expenditure Basket (MEB), which is the amount of money an average family needs for a month in that specific context.

We also conduct gap analyses to calculate the difference between current resources and survival needs. The number of rounds depends heavily on the context; sometimes, you don't want to repeat a distribution every month because of insecurity, but other times, smaller instalments help ensure sustained support over time.

What if a family saves the money and invests in their livelihood—like buying a cow—instead of spending it on immediate shelter or food?

I don't have a problem with that at all. Ultimately, they have the money to spend on what they need to recover. We and the donor have to accept that they preferred a cow over a new roof. If the family comes from a pastoral community, this is entirely understandable—that cow might provide milk, butter, and some income.

If this happens, it doesn’t mean the people misspent the money; it means the agency misunderstood their priority needs.

What do you consider when deciding whether to give cash to women or men in the community?

The principle of "Do No Harm" is paramount. Before we start, we must explore the existing gender dynamics. If we give cash to women in heavily patriarchal societies, it can unintentionally change power dynamics and, in the worst cases, lead to gender-based violence (GBV). Thus, we must be extremely careful.

It is important to remember that context dictates approach. When I worked in Ukraine, most recipients were female-headed households, and there were no issues at all. In parts of Somalia, however, that same distribution mechanism would never be appropriate.

In which countries is People in Need delivering cash assistance?

While the list has been shortened following recent funding cuts, we maintain significant cash programmes in Syria and Ukraine. We also provide cash assistance to people displaced by conflict and natural hazards in Ethiopia. In Moldova, we supported Ukrainian refugees with cash-for-education vouchers. We are also distributing money in Afghanistan and piloting this approach in Nepal.

Increasingly, we are working with local partners who often have superior knowledge of the local context and needs. Given our roots and expertise in strengthening civil society, we prioritise locally-led action—outstanding examples of this work can be found in Ukraine.

What message would you share with donors and partners?

Donors must be stronger in insisting on the use of cash when safe and feasible. They must also be more accepting of financial risk when requesting that agencies promote localisation, and implement cash-based programmes through local partners.

If we only hand out non-food items, many recipients won’t use them simply because they don’t need them—and that’s a form of lazy aid. Cash assistance, on the other hand, is much more demanding. It requires setting up financial service providers, building strong delivery systems, and maintaining far stricter monitoring. Donors must hold agencies accountable for managing this complexity.

The reality is that sometimes we slip into repetitive, easy forms of aid because we know they’ll get funded. My message is simple: don’t be lazy. Take the harder path—the one that genuinely empowers people and respects their choices.