Insights from humanitarian experts: Visa speaks with Elisa Gabellieri, GiveDirectly

At the United Nations organised Humanitarian Networks and Partnerships Weeks event in Geneva, Visa presented the findings of a report, Reimagining Aid in a Digital Age, published alongside Devex Services , the humanitarian news agency.??

During the event, Visa was able to sit down with fellow attendees, panellists, and influential figures in the sector to discuss their careers, challenges, goals, and aspirations for the sector.

This series of interviews is based on those conversations. Questions and answers have been paraphrased for brevity.

The views expressed herein are those of the interviewee.

Q: Can you tell us about your role and career in the humanitarian sector?

I’m the Humanitarian Partnerships Director at GiveDirectly, a nonprofit organisation that allows donors to send money directly to people in poverty with no strings attached – otherwise known as cash transfers. I oversee our relationships with partners, donors, stakeholders, and governments active in the humanitarian space.

I’ve spent my whole career in the humanitarian sector, starting with the World Food Programme (WFP), where I worked mostly on the program team across different countries in Africa and Latin America. I specialised in cash-based programming for emergency response, which then ultimately led me to join GiveDirectly about two and a half years ago.

Q: Can you explain the concept of cash transfers in a humanitarian context?

Cash transfers are a form of humanitarian aid where money is given directly to people in need, allowing them to make their own choices on how to best meet their needs. It's a way of empowering people to pave their own path out of poverty and vulnerability.

Just giving people money was once a controversial idea in this space. Donors used to be concerned about funds being misspent or stolen, and attitudes toward humanitarian giving were much more paternalistic. But today there’s a large body of evidence to show that cash transfers can have a positive impact on multiple outcomes, including food security, health, education, and income.

Q: What are some of the challenges in adopting cash transfers in the humanitarian sector?

One challenge is the fact that many traditional organizations were built around the idea that in-kind assistance – where people affected by a crisis receive goods or services – was the best way to help them. That means today they often don’t have the structure or processes in place to just distribute cash.

There’s also a mindset shift required. Traditionally, organizations specialise in giving people food, or they’d specialise in tents, or wash kits, so on and so forth. It’s very sector specific. But giving people cash is different. Cash can be used to address whatever the recipient decides.????

Cash transfers can also still be perceived as riskier than other forms of aid, even though the evidence shows they are not in practice. However, this perception alone can still lead to more caution from donors.

Q: How do cash transfers compare to in-kind assistance in terms of impact and efficiency?

Cash transfers have been shown to have a positive impact on multiple outcomes and can be more efficient than in-kind assistance. For example, a?study?by GiveDirectly in Kenya showed that for every dollar delivered as a cash transfer, there was a value of two and a half dollars being created in the economy. Basically, cash transfers also have a multiplier economic effect, creating economic opportunities and supporting the growth of local small businesses.

Q: Are there any concerns about the potential for inflation or other negative economic impacts from cash transfers?

It’s a good question. Inflation is obviously a major issue in many economies around the world right now. When it comes to cash transfers, the evidence suggests that so long as the market has the space and elasticity to grow, cash transfers do not create inflation. In fact, they can have a positive economic impact, creating a multiplier effect and supporting economic growth.

So, in most of the contexts we operate in it is not so much of an issue - including in many humanitarian contexts, markets are often more elastic than we’d expect. However, we have a rigorous process in place to ensure that cash transfers are delivered effectively and efficiently. We monitor markets to ensure cash transfers aren’t causing inflation and conduct research to assess the impact of our programs.

Q: Can you share some examples of the impact of cash transfers on individuals and communities?

We've seen many examples of the transformative impact of cash transfers on individuals and communities. In one village, we saw the structure of houses change from mud-based to safe, sturdy buildings after receiving cash transfers. We've also seen the uptake of education, with children returning to school, and the growth of small businesses. In humanitarian contexts, we've seen people use cash transfers to rebuild their homes after natural disasters and invest in livestock to increase their income.?

It may seem obvious, but the real underlying benefit of cash transfers is that people know what they need to spend money on. They don’t need someone else to make that decision for them. And in fact, when that decision is made for them, often it’s not the choice the aid recipient would’ve made.

That can lead to all sorts of inefficiencies, such as secondary markets selling goods or services for much less than the donor originally paid. All that cash could’ve just gone directly to the person who needed it, but instead, a large portion of it has been taken out of the system to pay the manufacturer or provider or whoever it is.

Q: What is the current funding gap in humanitarian aid and how can cash transfers help to address this gap?

The funding gap in humanitarian aid has been increasing, with needs growing faster than funding. Last year, the gap between funding requirements and humanitarian needs reached an unprecedented level of $35 billion, according to the UN.

Cash transfers can help to address this gap by making each dollar go further and maximizing the impact of aid. Research shows that up to 50% of international humanitarian assistance could be delivered as cash, but the uptake of cash transfers has been slowing down.?

Q: What is the future of cash transfers in the humanitarian sector, and how can organizations and donors support their adoption?

Organizations and donors can support the adoption of cash transfers by prioritizing their use, investing in the necessary structures and processes, and shifting their mindset to embrace the potential of cash. Of course, it’s vitally important to ensure there is transparency and reporting on the use of cash transfers to fully understand their impact and potential.?

We have the potential to transform the way that aid is delivered and empower people to make their own choices. The world faces a huge range of very difficult challenges, but the future of cash transfers in the humanitarian sector is really promising, and I really believe it’ll play a key part in helping us meet those challenges.

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Stay tuned for the next interview in our Digital aid dialogues by following?Visa Government Solutions?or reading our previous dialogue with?Melker Mabeck, IRFC.