“Don’t Send Coats”: How Cash Aid is Transforming Humanitarian Response

A view of the Za’atri camp in Jordan for Syrian refugees as seen on July 18, 2013

You know that friend who is so clearly, concretely superior to you in every way that you can’t even bring yourself to resent them for it? Mine is Alexa Swift, a friend from high school who, after getting her law degree, promptly decamped overseas for positions in international humanitarian aid. She has lived in South Sudan and Lebanon, and most recently worked both on the ground and in her headquarters in London to support Syrian refugees. Her programs focus on cash aid, a concept with which I was totally unfamiliar, so she recently took the time to talk to me about cash versus in-kind donations, how to manage personal finances in a refugee crisis, and why no one wants your old winter coat.

Meghan: So, Alexa. Could you tell me what exactly it is that you do?

Alexa: I work for an INGO as a technical program advisor in Early Economic Recovery. That basically means that I work on capacity building, learning, and program support for our field teams.

My specific area of focus is cash and markets programs in emergencies, and very early economic recovery.

M: That sounds FASCINATING and GOOD and IMPORTANT. Which geographic areas are you working in right now?

A: I have just wrapped up supporting our refugee programs in Europe where one of our activities is to provide vulnerable people with prepaid debit cards. It looks like I’ll next be in West Africa.

M: So in Europe, were you working primarily with Syrians?

A: Sort of. When we designed the cash program, we felt that we really wanted to target based primarily on need, rather than on their passports. We designed a program that was nationality neutral and instead focused on access to economic resources. That said, the majority of the recipients ended up being Syrian, in part because they were often the most vulnerable group, and in part just because they are the predominant group in that region right now. Also, we could only provide the cash cards to people who were locally registered, and after a while the Greek and Serbian governments limited the nationalities they would give registration papers to.

M: What do you mean by “economic resources,” exactly? Is that just actual cash, or are we talking about food, shelter, etc?

A: What we tried to do (and the level of success is still a bit uncertain) was identify people with limited access to funds. Everyone that arrives receives the same basic shelter and food support from agencies working in the area, but there were still a lot of ad hoc goods they needed to buy. We focused on things like how long it had been since they’d earned an income, whether they had lost their belongings en route, whether they had access to bank accounts while they were traveling, what type of employment they had before they left Syria, how they had financed their trip, and whether they had someone at a final destination supporting them.

During this time, our organization (and many others) was also providing shelter in local hotels to any families with young children, female-headed groups, or people with disabilities. That was in addition to regular meals while on the Greek islands or in the camps, and we also often donated warm clothing.

M: This is a question that will show my limited understanding of this refugee crisis, and is probably too broad a question to answer easily, but what kind of financial situation do most refugees find themselves in? For example, do refugees come with cash? Is it in the currency of their home country? Do they have bank accounts? What happens to that money in a country where the system itself is collapsing? Or do they prefer to carry goods with monetary value? Or or or…

A: It’s really diverse. The cost of getting across the water from Turkey ranges from about $1200–3000 USD per person depending on the type of boat and weather. (This was in January, so those numbers may have changed.)

M: !!!!

A: For some people, that represents everything they have. They might have taken out loans from loan sharks or smugglers. Others might have sold assets, wrapped up a business, or have middle class wealth to fund themselves. People may carry jewelry to sell.

Typically in a refugee context like Somalia or South Sudan, the refugees will arrive with a fairly similar background and resource profile; here it is massively diverse. I talked to families who bought plane tickets off the islands in Greece, and others who were stuck sleeping on the roads for weeks because they couldn't afford a ferry ticket.

M: Is there a functioning financial system in Syria right now? If I was a Syrian refugee with a debit card, would I be S.O.L.?

A: Definitely. With the current sanctions, you couldn’t withdraw from a Syrian account abroad, but you could have family wire you money — if they had it.

M: What kind of financial system exists in the camps? Is there massive price gouging happening for essentials? Or a barter economy?

A: It’s hard to say, since I haven’t been to the ones that are cropping up now, but typically prices will be inflated if people don’t have freedom of movement. Often there will be a significant market for the sale of distributed goods (there are camps and markets all over the place full of WFP or other donor-branded food). More established camps tend to have a lot of small businesses popping up that are owned or operated by industrious refugees, but the ones in Europe are basically overwhelmed transit sites so I imagine the markets there are more local businessmen who are taking advantage of the situation.

Alexa waiting for the plane in South Sudan

M: Okay, so your organization provides cash aid — in this case, prepaid debit cards. What does that mean? How much is on these cards? How do recipients access the funds?

A: So this is a fairly new and unusual project for us. When we provide cash, the amounts to provide and how we provide it are very dependent on the local context and program objectives.

In Europe, we provided prepaid debit cards that can be used in any ATM or at any store that accepts debit cards (anywhere in the world, actually). If you were traveling as a family we gave you 250 Euros, and 90 if you were an individual. The numbers came from surveys and assessments about typical needs and expenditures when people first arrived, particularly things they needed to buy that weren’t being provided by the NGOs. So the Greek numbers were basically the cost of ferry tickets off the islands, plus enough for a couple of days of food, or some additional warm clothes.

M: How did you arrive at using cards instead of cash? I assume there’s less potential for theft or fraud?

A: A few reasons. We tend to consider having our staff hand out physical cash a last resort, as it is a process that is open to all kinds of additional security issues. Increasingly we are opting for electronic processes (mobile phones, ATM cards, etc) because they provide so much additional security and tracking. They also can provide us a lot of data on how the funds are spent. So in this example, we are able to see what stores money is spent in, as well as the locations of each transaction.

M: This kind of work is something you’ve been doing for a long time (because you are a very good person), and I’ve been curious about this ever since you explained it to me: why do you think cash aid is better than donating or distributing more traditional items, like food or warm clothes?

A: So many reasons!

First, cash donations puts some of the control, power, and dignity back in the hands of the recipient. And as an individual experiencing trauma, you tend to know much better than any NGO what you actually need.

Also, this system lets you decide for yourself how to spend the money, even in choosing the brands you prefer or clothing sizes you wear. In that sense, it also cuts down on waste. When we distribute actual goods we are approximating the needs based on an average sized house, and providing the same package to everyone — so it won’t be perfect for anyone.

It’s also better for markets. When a crisis happens and NGOs show up and distribute stuff, we are overriding local market actors. This means that we can put them out of business (because no one is shopping anymore), or in cases where there is longer-term aid, we have even undermined local production — people basically stop farming because they are given food for free.

Really, for a local area and for the local population to recover from a crisis, we need to be looking at ways to support both the markets and individuals. Cash tends to do this much more effectively and efficiently than providing (often inappropriate) in-kind aid.

M: You’ve convinced me! So why do so few NGOs do it?

A: Well, it’s becoming more popular, and this year especially there’s been a lot of attention on scaling the use of cash. That said, it’s still only about 6% of humanitarian programming.

Some donors are still nervous about cash programs. There are also a lot of ongoing attitudes like “we know better,” or believing people will waste the cash. Additionally, a lot of the humanitarian infrastructure is set up to deliver goods.

Also, since cash aid programs are still relatively new (they only emerged in the last 10 years), they are held to a higher standard than in kind. For example, to get a cash proposal approved, we have to understand local markets, and need to have much stricter monitoring and targeting than in kind distribution, so often immediately after a crisis, it’s simply easier to push goods out the door.

There is also a bit of (I am ashamed to say this) a resistance to cash because it really does challenge the humanitarian structure in some ways. When there is a big disaster, the UN and INGOs have a system of coordination based on what we call sectors — there’s a food sector, and a shelter sector, etc. Cash is inherently multi-sectoral and so has long been a coordination point of confusion for humanitarians. This shouldn’t matter, but it impacts jobs and funding allocations, so programs like these have been stuck in the middle of a political fight.

M: How have you found cash aid is received on the ground?

A: By beneficiaries? Very well. Most strongly prefer to receive cash than any other kind of aid, with the exception of areas where markets aren't functioning or it is perceived as too dangerous to travel to the market (and then in-kind is more appropriate anyway).

M: So do you think this is a trend that will continue? Towards cash aid?

A: Definitely. Donors are starting to push for more programs, and cash aid is going to be a major topic at the World Humanitarian Summit due to a recent report by the Center for Global Development.

M: So, for those of us who want to donate to crisis events, is it best to search out an organization that is doing this kind of work? Rather than sending an old winter coat or texting the Red Cross?


Sorry. I would always, always say to give money to a well-respected agency that has the ability to leverage it, rather than any in-kind donations. Those coats undermine local markets and are often not that appropriate. As an example, in Greece so many people were sending stuff like that to some of the local organizations and volunteer groups that refugees ended up with coats basically thrown at them haphazardly. There were store rooms full of piles of random coats that no one had been able to inventory.

I think cash and market support programs (in the appropriate contexts) are the most effective, efficient, and appropriate way to deliver humanitarian aid.