What Canada can learn from successful cash aid programs in war zones

Irina looked to the camera as she described what it’s like to flee your home as bombs detonate around you.

“When bombs are falling,” she said in Ukrainian, “at that moment, you pray, and you do not know what will happen to you in a second.”

In 2022, Irina, her husband, and her daughter fled their home in Kyiv, Ukraine, with little.

“I woke up at half-past five in the morning and heard dull explosions,” she said. 

“When the bombs are falling, you’re all squeezed, I don’t know, like a fist.”

When she and her family arrived as refugees in Poland, it was cash, not aid or goods, that helped immediately.

“I come here in the winter, and I have no change of clothes, no shoes… [an aid group] provided us with the funds that will help us a lot for the most necessary expenses.”

The aid group is the Community Organized Relief Effort (CORE), an American-based aid organization that focuses on Cash and Voucher Assistance (CVA) as a way to help communities in need. 

Groups such as CORE, a member of the Cash Learning Partnership Network (CALP), say cash or vouchers are an empowering way to help families dealing with disasters and preserve recipients’ dignity in times of crisis.

“I prefer to get cash because then I can go to the market. And the whole sitting together and making the food keeps my family unit intact,” said a man in Gaza, Palestine.

The man received CVA after the onset of the war in October, said Manal Shehade, deputy regional representative for the Middle East and North Africa at CALP.

CALP advocates cash transfers to “enable people to overcome crises with dignity by exercising choice and their right to self-determination.”

With more than 90 members and funded principally by German, Swiss and Norwegian governments and development bodies, CALP is a leading implementer of global CVA. 

CALP members responded to the war in Ukraine as part of the Ukraine Cash Working Group. The network has also been active in Sudan and Gaza for the past year to respond to the mass displacement, death, and hunger caused by the civil war and the Israeli invasion, respectively. 

Cash best for putting power in people’s hands: experts

CVA has been part of their aid efforts in Sudan for a long time, said Sara Elgieli, executive manager at Sudanese Development Call Organization (NIDAA). NIDAA, as the local partner of CORE, helped deliver a seven-month pilot project in 2023 to help 600 families with CVA in two neighbourhoods in Khartoum.   

Elgieli, who had to evacuate the Sudanese capital of Khartoum two months after the start of the conflict, said CVA has become integral to her work. 

“For years, we were doing what the international community told us to do. They would tell us to distribute seeds and tools to farmers, that this was the humanitarian approach. But, we realized from experience these approaches were not appropriate.” 

“We never asked farmers what they wanted,” she said. 

“We discovered there is much more to aid than what agencies tell you,” said Elgieli. “We started thinking about new approaches and found the cash model.”

CVA is about “shifting power dynamics,” from the powerful to the vulnerable, said Tenzin Manell, senior advisor for cash and markets at CORE.

“You are talking about localization and decolonization, right? CVA centres the affected family to be the actor in their recovery,” she said. 

What’s “important to understand, especially at the beginning of a crisis, is that the households you’re targeting aren’t 100 per cent reliant on you,” said Luca Sangalli, the NORCAP cash expert and ACF national cash coordinator in Palestine.

“Houses have their capacity and resources. You’re contributing to their capacity to meet basic needs,” he said. 

“Traditional humanitarian aid focuses heavily on in-kind donations,” added Manell.

While CVA is not a replacement for conventional aid, what differentiates it from other forms of assistance—and makes it a great alternative or complement—is that cash “facilitates purchasing power,” Manell said. 

Shehade said people from Gaza have talked about being able to choose what they want to eat; if they had enough rice, they could buy lentils, for example. 

What is CVA?

“CVA in a humanitarian context is essentially a resource transfer,” said Manell. 

There are two ways to deliver CVA: multipurpose cash assistance and group cash transfers. Both methods are currently being used in Gaza and Sudan.

Multipurpose cash assistance is a transfer of money designed to partially or fully cover a household’s basic needs, according to CALP’s definition. 

For the cash transfers to be multipurpose, they must be “explicitly designed to address multiple needs,” according to CALP. 

The monetary amount of multipurpose cash transfers depends on the area’s minimum expenditure basket, which calculates the average costs of a vulnerable household’s needs in their community. 

A notch below the minimum expenditure basket is the survival minimum expenditure basket, which is similar but is for short-term, basic survival needs only, according to CALP.

Unlike multipurpose cash transfers, group cash transfers are not indexed and they provide money “for selected groups to implement projects that benefit … the community at large,” according to CALP.

In Palestine, CVA has been in place for more than a decade and now forms more than 30 per cent of humanitarian aid in the occupied territories. 

In Sudan, The Sudan Cash Working Group was formed in 2015 and is chaired by the United Nations Office for the Coordination of Humanitarian Affairs, Mercy Corps, and the International Rescue Committee. 

By April 2024, the group had distributed US$3.2 million in CVA, reaching more than 200,000 people across 10 states in Sudan in response to the ongoing war between two factions. 

Markets remain despite the destruction

Since multipurpose cash transfers are unconditional, recipients can spend it on any item they may find available. 

In Khartoum, CORE’s post-distribution survey cited a 65-year-old widow who said her family could buy food and an electric stove.

“We benefited a lot from the amount of money, and we were in dire need of it with the cessation of work and the war conditions.” 

While buying food and drinking water remains a priority in Gaza, post-distribution monitoring results show recipients spent the money on medicines, hygiene products, bedding, and fuel. 

This demonstrates that cash transfers help maintain the “structure of people deciding their needs and wants,” said Shehade. 

According to Manell, other expenses in Khartoum besides food include hygiene products, medication, transport, rent, and utilities.

However, there needs to be a functioning market for cash to be effective. 

Despite the destruction in Gaza, a semblance of markets remains, said Sangalli.

“The formal market infrastructure collapsed, and everything moved to the informal market,” said Sangalli, adding that the current market consisted mainly of street sellers, many of whom were shop and supermarket owners previously. 

The current market functionality in Gaza is survival-level, he said.

According to a Gaza market monitoring report in March by the World Food Programme (WFP), the reasons behind the formal market’s collapse include “damage to the shops, displacement of shop owners and employees, and inability to replenish stocks.” 

The “informal vendors typically specialize in the sale of few items, generally foods with more durability, such as canned foods, rice, pulses, and other food items, whereas very few offer vegetables, wheat flour, eggs, bottled water, dairy, and non-food items,” according to the report. 

Market conditions vary significantly between the south and north of Gaza, said Sangalli, calling the north “a black hole.”

The United Nations’s famine warnings have been the highest in the north of the besieged strip. 

“The daily average of trucks entering Gaza since the onset of the conflict [was] 90, which is only 18 per cent of what entered prior to the crisis with 500 trucks per day,” as of mid-February, according to the WFP.

“Out of these 90 trucks, 60 trucks on average carried food items, a considerable decrease from the pre-crisis figure of 150 trucks carrying food daily,” the report added.

Gaza’s market depends on this supply line, which passes mainly through Rafah and Karim Abu Salem crossings in the south. Sangalli said small local productions, such as bakeries, are also present in Gaza. 

A WFP survey shows that goods families can’t immediately use are sold to vendors, sometimes for cash. 

“Eighty-seven per cent of surveyed informal shops and 71 per cent of surveyed formal shops reported restocking items through the purchase of goods from households,” the report noted.

CALP said 60-88 per cent of CVA recipients in Gaza reported meeting some of their urgent needs thanks to the cash transfers. 

“Nobody said they could not spend the money, which highlights there are places where you can spend,” said Sangalli. 

In Sudan, markets have also remained functional in Khartoum, and cross-border flows have continued, said Manell.

“The obstacle is on the purchasing side as households are unable to meet their basic needs as opposed to the supply side since vendors have been able to restock,” she said. 

Reliance on existing local knowledge and infrastructure is necessary to implement a CVA program.

“We did not create anything new after Oct. 7,” said Sangalli. 

After the Israeli assault, “authorities in Gaza and Ramallah started compiling lists of displaced people,” he said. 

The master database of CVA beneficiaries includes the list of internally displaced persons compiled by the Palestine Ministry of Social Development and the National Social Registry, based in Ramallah, and lists sourced from Gaza-based agencies and referrals. 

The cash response in Gaza started on Oct. 13 and involves 17 agencies. So far, CVA has been delivered to 172,619 households, making up 1,176,750 individuals. The total distributed amount is $58 million. 

Before the war, the CVA transfer value was 60 per cent of the survival minimum expenditure basket. 

However, the price escalation of basic goods following the war meant the value had to be increased. It’s now at 80 per cent. The payments were made to recipients in one round of transfers, but CALP intends to increase the frequency. 

You have the cash, but how to get it to those who need it?

Cash distribution has been the trickiest part, Sangalli said. 

“Normally, you have a good number of financial service providers in Gaza, but many of them stopped working” after the war began, said Sangalli.

However, PalPay (similar to but not to be confused with U.S.-based PayPal), linked to the Bank of Palestine, proved to be a stable partner because the service “relies on the financial infrastructure of the Bank of Palestine, which is the most solid one in Palestine,” Sangalli said. 

Once the list of beneficiaries—consisting of names and phone numbers—is shared with the bank, the company runs its verification checks to ensure accuracy. 

Then, an SMS containing a unique code and a list of available PalPay agents is sent to the recipient. The recipient can then go to an agent, who double-checks the ID and the code using a point-of-sale (POS) machine and hands over the cash to the beneficiary. 

Before Oct. 7, there were more than 250 PalPay agents, but according to Sangalli, the figure is now down to 30-50 on a good day or 20 on a bad day. 

Despite the dwindling number of PalPay agents, “they are spread all over Gaza, covering many locations,” Sangalli said, adding that POS machines add mobility as “agents can take the machines with them when they are displaced or can take the machines to camps and shelters” to be closer to recipients. 

The breakdown of Gaza’s telecommunication system due to targeted Israeli attacks adds to the challenge. 

“We have to stop when communication is completely shut off,” Sangalli said. 

However, not all is lost. Crucially, cash transfers rely on SMS and not the internet. 

“As long as there is a minimal level of connectivity, the SMS can be delivered. You don’t need continuous connectivity. You just need a second to get the message and a second for the agent to verify,” Sangalli said.

In addition, recipients have up to three months to retrieve the money, he added.

“If a person doesn’t get the SMS today because he’s off the grid, maybe he will find a connection in a month, receive the text, and find an agent to get the cash,” he said. 

Moreover, PalPay sends text messages several times to help ensure reception. As a result of these attempts, the cashout rate has been 72 per cent.

In Khartoum, CORE and NIDAA have relied on Cashi, one of Sudan’s leading fintech companies, to distribute cash. 

The company continuously added new agents, called Cashi Points, nearer to the recipients’ location to reduce the distance the latter travelled to collect cash. They also provided up-to-date information about the available agents so that recipients did not go to an area where the agent was offline. 

Manell said that such measures improve civilian safety during the war. 

Communication and power blackouts were also challenges in Khartoum, but RedRose, the beneficiary data management and analytics platform the project relied on, helped circumvent them. 

“The benefit of using RedRose is that you can register beneficiaries offline into the system,” Manell said. 

Logistical feasibility and, more importantly, community preference determines how the cash is delivered.

Bank deposits, prepaid cards, mobile money, e-wallets, and cash envelopes are the many modes of distribution worldwide in similar situations. Still, Manell said there was no singular preference in Khartoum. 

“Many preferred receiving transfers via e-wallets. This had the added benefit of them not having to expose themselves going out to collect cash,” she said. 

Others wanted to receive payment over the counter, especially if they did not have bank accounts, she added. 

“The best practice is to have a minimum of two ways of delivering cash,” she said.

From the household to the community

While multipurpose cash assistance targets households and individuals, group cash transfers target a wider group and can fund community projects, increasing the impact of cash transfers in several ways. 

In Gaza, group cash transfers have been used to target people with disabilities as a community instead of individuals. This helps maintain “linkage to the community,” said Shehade, by facilitating people to come together.

For Manell, multipurpose cash assistance “is key in supporting households to meet their basic needs, but there are other services critical to protecting lives.” 

This is true in Khartoum, where neighbourhood-level emergency response rooms have anchored the pilot program, said Elgieli. 

“Most of them have history, but some were formed after the conflict,” she added. 

With the government absent, “different community structures came together and became service-based organizations. The aim was to provide services to communities. They became like the government. They provide everything: health services, food, protection, and security,” Elgieli said. 

The emergency response rooms were part of consultations with NIDAA and CORE from the start and were “well positioned to help identify those who are most vulnerable,” said Manell.

The emergency response rooms might comprise “unregistered, emerging groups that are less eligible for formal funding” due to their lack of extensive track record, said Manell. 

However, support for the emergency response rooms is based on “the logic that community members know their most pressing needs, and they have a conception of the solutions to the problems they face,” she said. 

“The cash model has helped support organizations that are not registered and don’t have a formal presence,” said Elgieli. 

In doing so, group cash transfers become “enablers of localization,” said Manell. 

For example, within the emergency response rooms are women’s response rooms “with an office and dedicated volunteers who work on women’s needs,” Manell said. 

“As you can imagine, there’s an enormous imperative not to overlook women’s needs,” she said. 

Manell’s organization listened to local knowledge and preferences to determine those needs. Local partners “proposed activities they wanted to continue or start. And then, we supported the training and the transfer of funds,” she said.

CORE worked with 11 women’s response rooms in Khartoum and transferred US$500 to $8,000 per group, depending on each group’s activities, for a total of $39,400 during the seven months. Additionally, CORE contributed $30,000 to multi-purpose cash transfers, bringing the total amount to $69,400 for the entire pilot. 

While CORE helped with project management training, financial reporting, and monitoring, the women’s response rooms delivered the services to those in need. 

These included legal aid, assistance to gender-based violence survivors, and transferring pregnant women to special care units that ensured timely medical intervention and many safe deliveries. 

“Training provided to the volunteers helped women know the right ways of acquiring their rights,” said one volunteer in CORE’s post-distribution survey.

“These are amazing results for a small investment,” Manell said. 

Canadian contribution is small

Despite their success, CVAs aren’t necessarily the first line of aid in Canada, with most organizations working to provide goods and services internationally rather than sending money.

However, CVA does make up a small part of the Canadian government and some non-profit organizations’ aid packages. 

The Humanitarian Coalition comprises 12 major national NGOs and is a critical organization that coordinates the Canadian CVA.

CVA is part of the coalition’s aid package for small and medium-scale emergencies, supported by Global Affairs Canada’s Canadian Humanitarian Assistance Fund.

According to the government, the assistance fund supports 25 ongoing humanitarian aid programs, with funding ranging from $255,000 to $700,000. The programs are generally for flood and earthquake relief in Asia and Africa. Cash transfers are part of the response in all these cases. 

Additionally, CVA is a feature of the coalition’s current work in Gaza, albeit a small one. Islamic Relief Canada, one of the coalition’s members, has distributed more than 4,000 food vouchers in Gaza.

Around the world, US$7.9 billion in cash assistance was transferred to those in need in 2022, a 41 per cent increase from the previous year, the biggest year-on-year on record, 

The trend has been consistently upward since 2015. According to the CALP, CVA totalled 21 per cent of international humanitarian assistance in 2022.

Obstacles remain in Gaza for CVA

Liquidity remains a massive challenge in Gaza. 

“Banks are unable to move cash between branches,” Sangalli said. 

Most of the cash was in the north, and shifting it to the south, where Gaza’s population has taken refuge, has been difficult, he added. It is also challenging for PalPay agents to retrieve cash from ATMs and ensure the availability of beneficiaries’ funds.

The lack of authority in the area also complicates matters, with reports of gangs stealing cash and consistent reports of Israeli forces allegedly seizing millions from Gazan banks and moving the money to Israel, said Sangalli.

However, solutions are being sought.

“We are discussing the digitization of payments,” Sangalli said. 

“It might sound strange since we are in the middle of such a crisis, but we see the possibility of doing that. Some bureaucratic requirements have relaxed, and we have a pilot that seems to be working,” he added. 

“The idea is to move to digital payments so that whatever little (physical) cash we have is enough.”

Over in Khartoum, CORE is working to scale up from its successful pilot and “raise funds to be able to do multipurpose cash assistance at scale to reach tens of thousands of households that need assistance,” said Manell. 

They also plan to continue collaborating with the emergency response rooms. 

“We are going to support them again with another round of group cash transfers so that the activities during the pilot that worked well can be expanded,” she said.

“My key message is cash is doable and effective,” Sangalli said, reflecting on his lessons from Gaza. For Manell, the learning from Khartoum is that “equitable partnerships with local organizations is the special sauce” for success. 

Elgieli is unequivocal: “We have piloted a program. There is no excuse for cash transfers not to be done.”

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