A new report reveals that direct cash transfers to people in need can make aid programmes significantly more efficient, especially at a time when international aid budgets are shrinking. The analysis, commissioned by the CALP Network, examined $11.4 billion (£8.5 billion) in aid spending across 1,203 programmes and found that cash assistance can enable up to 38 per cent more aid to actually reach those who need it. This finding comes as funding per person in need has dropped by 35 per cent between 2024 and 2025, according to the latest available statistics.
Efficiency Gains Through Cash Assistance
The report, released ahead of the Global Partnerships Conference in the UK, argues that direct cash transfers—especially when delivered through local organisations and at significant scale—can help the humanitarian sector reach more people within the shrinking pool of aid funding. Instead of using aid to fund specific programmes like food or water relief, putting cash directly into the hands of recipients allows them to prioritise their own needs.
“At a time when humanitarian needs are rising and aid budgets are under intense pressure, this is not a debate about efficiency for efficiency’s sake,” said Cate Turton, director of the CALP Network. “Greater efficiency means more families receiving support, more dignity for crisis-affected people and fewer impossible trade-offs in humanitarian response. This report gives donors and agencies concrete evidence for reforms we already know work—prioritising cash assistance, investing in locally led delivery, and delivering cash at scale—so aid can reach more people within existing funding.”
Local Leadership and Scaling Up
Gideon Rabinowitz, director of advocacy at the NGO network Bond, emphasised the importance of locally led cash assistance. “Today's report highlights that cash assistance works to meet humanitarian needs among communities impacted by conflict and crisis, and works best when led and delivered at scale by local organisations. As international aid budgets shrink, there is a need to consider how remaining funds can deliver the best value for marginalised communities worldwide, and for taxpayers. Donors including the UK government should now heed the report's evidence and take action to implement reforms that will facilitate locally led cash assistance delivery, and make every penny of international aid count—and reach the people who need it most.”
Direct cash transfers have already been adopted by major humanitarian organisations, including the World Food Programme (WFP), a UN agency and the world's largest humanitarian organisation. The WFP uses cash as part of its ‘Anticipatory Action’ programme, which aims to mitigate the impact of predictable climate shocks. In Ethiopia, for example, the WFP provides cash transfers to pastoral communities ahead of drought periods, enabling families to purchase food, animal feed, and cultivate crops, rather than losing their livestock to the climate shock.
“The goal is really to reduce the impact on vulnerable populations by saving lives and protecting livelihoods ahead of the shock,” Robert Ackatia-Armah, acting deputy country director for WFP Ethiopia, previously told The Independent. “The idea is that we cannot prevent the shock from happening, but we can prevent the humanitarian cost and caseload by intervening in advance.”
Despite these benefits, there is a risk that cash assistance programmes may be deprioritised as NGOs are forced to cut back on everything except the most critical humanitarian work, such as food relief in famine-prone areas. Last month, the WFP in the Democratic Republic of the Congo (DRC) confirmed to The Independent that cash assistance has been reduced there as the agency focuses on other life-saving activities.
This article is part of The Independent’s Rethinking Global Aid project, which explores innovative approaches to international development in an era of funding constraints.
