Evidence
Issues in existing international development practice and how we address these:
| Issue | How we address this |
| Decision making and allocation criteria: Decisions regarding development finance are often made and priorities set by donors according to their own interests as opposed to those of the beneficiary (Moon & Omole, 2017; T. Ottersen et al., 2017). Aid allocation criteria commonly used by donors include broad country-level measures such as population size or Gross National Income (GNI) per capita and having political, economic, linguistic or geographical linkages to the recipient, including colonial ties, when they allocate funds, and less frequently indicators of need or sub-country level criteria such as whether key and vulnerable populations will be reached (Alesina & Dollar, 2000; Mishra, 2012; Ottersen, Kamath, Moon, Martinsen, & Rottingen, 2017; Steele, 2017). | We directly fund community-driven initiatives that address self-identified key needs. We directly target some of the most vulnerable members of society in one of the world’s poorest countries: Smallholder farmer women and their children in villages in Côte d’Ivoire. |
| Rationale: The rationale behind donors giving development assistance may be unclear, or it may be used as a foreign policy tool to address perceived issues of national security, as a means of international diplomacy, or as an investment furthering the donor’s business interests (Darcy & Hofmann, 2003; Moon & Omole, 2017). | We give grants to support smallholder farmer women in their fight against poverty, to empower them and to help them provide for themselves and their families, including their children’s healthy development and education. |
| Proportion of funds reaching target population: A significant proportion of development assistance never leaves the donor country (Moon & Omole, 2017). This is known as “phantom aid” and may be due to e.g. administrative costs, grants to donor-linked NGOs or counting debt relief as aid (Moon & Omole, 2017; T. Ottersen et al., 2017). When international development organisations account for their spending, some may group their core activity expenditures, i.e. not for administration and fundraising, in one category e.g. “program services”, “field operations” or similar terms, which often includes staff expenditures (salary, travel, accommodation etc.), equipment (cars, phones etc.) and offices in program countries. It is rarely clear, exactly how much reached the target population as goods and services received. | At least 85% of your donation goes directly as grants into the hands of members of the recipient community. We stay lean and volunteer-based, and our core activity is cash transfers directly to women living in extreme poverty, so you can always be sure how much has reached them – minimum 85% of your donation. |
Cash transfers
In a 2016 review of 165 studies of 56 cash transfer programs across 30 countries, the Overseas Development Institute (ODI) made the following key findings (Overseas Development Institute, 2016):
“· Monetary poverty: Cash transfers reduce monetary poverty.
· Education: Cash transfers raise school attendance, but do not always lead to improved learning.
· Health and nutrition: Cash transfers stimulate health service use and improve dietary diversity, but there is less evidence that they affect the height and weight of children.
· Savings and investment: Cash transfers can help foster beneficiaries’ economic autonomy.
· Employment: Cash transfers are associated with a reduction in child labour. Most show either no effect or a positive effect on adults working.
· Empowerment: Cash transfers increase women’s decision-making power and choices, but do not always reduce emotional abuse.” (Overseas Development Institute, 2016).
While cash transfers may not be a global development panacea, in terms of NGO practice one has to weigh it against the alternative of providing goods and services to people, sometimes referred to as "in-kind donations". The evidence base for this type of international NGO practice has historically been notoriously weak, with one main exception being medical interventions underpinned by randomized, controlled trials. This type of work may be subject to a number of issues such as absence of fungibility (i.e. school books do not feed a hungry child), complicated logistics and resource intensive administration, high requirements for human resources and necessary expertise, wear and tear, staff and products coming from donor countries undermining the recipient country’s own people and their products, building parallel and temporary systems in the recipient country, etc.
Direct comparison studies have shown generally favorable results for cash transfers as compared to in-kind donations primarily in the area of food security in various settings (Cash transfers vs. food and food vouchers in Ecuador, Uganda, Niger, and Yemen (Hoddinott et al., 2013), cash transfers vs. food donations in Mexico (Cunha, 2014), cash transfers vs. food and non-food vouchers in the Democratic Republic of Congo (Aker, 2015), cash transfers vs. food security cards in India (Gangopadhyay, Lensink, & Yadav, 2015)).
The growing body of literature on cash transfers has helped lead a number of organizations to endorse and/or use cash transfers in their programs. These include among others: UNICEF (UNICEF, 2019), World Food Programme (World Food Programme, 2018), BRAC (BRAC, 2017), International Rescue Committee (International Rescue Committee, 2019), GiveDirectly (GiveDirectly, 2019), World Bank (World Bank, 2009), Overseas Development Institute (Overseas Development Institute & Center for Global Development, 2015), Center for Global Development (Overseas Development Institute & Center for Global Development, 2015) and GiveWell (GiveWell, 2012).
We aim to be at the forefront of this move away from traditional donor-driven charity work towards evidence-based global financial redistribution to the world's poorest, driven solely by their needs and priorities.
Further resources:
· “Give People Money” by Annie Lowrey (2018) provides a substantive case for cash transfers for poverty eradication, as well as for universal basic income (Lowrey, 2018).
· The international NGO GiveDirectly provides a concise overview of the literature on cash transfers here.
References
Aker, J. C. (2015). Comparing Cash and Voucher Transfers in a Humanitarian Context: Evidence from the Democratic Republic of Congo. The World Bank Economic Review. doi:10.1093/wber/lhv055
Alesina, A., & Dollar, D. (2000). Who Gives Foreign Aid to Whom and Why? Journal of Economic Growth, 5(1), 33-63. doi:10.1023/a:1009874203400
BRAC. (2017). BRAC’s Ultra-Poor Graduation Programme: An end to extreme poverty in our lifetime . Retrieved from https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2017/04/Lamia-Rashid-BRAC-Ultrapoor-Graduation-Paper-for-UN-Expert-Group-Meeting-May-2017-25Apr17.pdf
Cunha, J. M. (2014). Testing Paternalism: Cash versus In-Kind Transfers. American Economic Journal: Applied Economics, 6(2), 195-230. doi:10.1257/app.6.2.195
Darcy, J., & Hofmann, C.-A. (2003). According to need? Needs assessment and decision-making in the humanitarian sector (HPG Report 15). Retrieved from
Gangopadhyay, S., Lensink, R., & Yadav, B. (2015). Cash or In-kind Transfers? Evidence from a Randomised Controlled Trial in Delhi, India. The Journal of Development Studies, 51(6), 660-673. doi:10.1080/00220388.2014.997219
GiveDirectly. (2019). Operating Model. Retrieved from https://givedirectly.org/operating-model
GiveWell. (2012). Retrieved from https://blog.givewell.org/2012/12/26/the-case-for-cash-2/
Hoddinott, J., Gilligan, D., Hidrobo, M., Margolies, A., Roy, S., Sandström, S., . . . Upton, J. (2013). Enhancing WFP’s Capacity and Experience to Design, Implement, Monitor, and Evaluate Vouchers and Cash Transfer Programmes: Study Summary . Retrieved from http://www.ifpri.org/event/cash-food-or-vouchers
International Rescue Committee. (2019). Cash Relief. Retrieved from https://www.rescue-uk.org/outcome/cash-relief
Lowrey, A. (2018). Give People Money: Crown. ISBN: 9781524758769
Mishra, T. (2012). International Development Aid Allocation Determinants. Economics Bulletin, 32(1), 1385-1403.
Moon, S., & Omole, O. (2017). Development assistance for health: critiques, proposals and prospects for change. Health Econ Policy Law, 12(2), 207-221. doi:10.1017/S1744133116000463
Ottersen, T., Elovainio, R., Evans, D. B., McCoy, D., McIntyre, D., Meheus, F., . . . Rottingen, J. A. (2017). Towards a coherent global framework for health financing: recommendations and recent developments. Health Econ Policy Law, 12(2), 285-296. doi:10.1017/S1744133116000505
Ottersen, T., Kamath, A., Moon, S., Martinsen, L., & Rottingen, J.-A. (2017). Development Assistance for Health: What Criteria Do Multi- and Bilateral Funders Use? Health Economics, Policy and Law, 12(2), 223-244.
Overseas Development Institute. (2016). Cash transfers: what does the evidence say? A rigorous review of programme impact and of
the role of design and implementation features . Retrieved from https://www.odi.org/sites/odi.org.uk/files/resource-documents/11316.pdf
Overseas Development Institute, & Center for Global Development. (2015). Doing cash differently: How cash transfers can transform humanitarian aid . Retrieved from https://www.cgdev.org/sites/default/files/HLP-Humanitarian-Cash-Transfers-Report.pdf
Skjødt, S. U. (2017). Dansk Flygtningehjælp: Vores stab er broget - bare ikke i toppen. (Danish). Retrieved from https://www1.dr.dk/nyheder/indland/dansk-flygtningehjaelp-vores-stab-er-broget-bare-ikke-i-toppen
Steele, C. A. (2017). Public Goods and Donor Priorities: The Political Economy of Development Aid for Infectious Disease Control. Foreign Policy Analysis, 13(4), 986-1002. doi:10.1093/fpa/orx002
UNICEF. (2019). Topic: Cash transfers. Retrieved from https://www.unicef.org/topics/cash-transfers
World Bank. (2009). Conditional Cash Transfers. Retrieved from http://siteresources.worldbank.org/INTCCT/Resources/5757608-1234228266004/PRR-CCT_web_noembargo.pdf
World Food Programme. (2018). Cash Transfers Factsheet. Retrieved from https://www.wfp.org/content/2018-cash-transfers-factsheet