Value for Money for whom? Insights into the recipients’ perspective

Typically, Value for Money analyses focus on how we can improve ‘the system’ to make the most of scarce resources. But what do the people who receive assistance think?

In the context of humanitarian cash and voucher assistance, this usually happens by increasing the scale of delivery to improve efficiency and economy. But one perspective is often not included when we evaluate Value for Money in these programmes: That of the people who receive aid.

So, our research team was wondering what Value for Money looks like from the point of view of crisis-affected households. How do beneficiaries perceive the process of receiving humanitarian cash grants? And does it matter to them which operational model is used to deliver the assistance?

Our recently completed UK FCDO-commissioned research engaged with these questions in the context of Colombia, Jordan, Kenya and Turkey. The study suggests that aid agencies have to take a range of considerations into account, such as:

• the level of development of the financial service system in-country,
• the location of the crisis (rural/urban),
• a gender gap in (financial) literacy, and
• the general security environment.

As always, context matters! Yet, some common themes emerged:

1. The transfer value is key

The highest priority for recipients, unsurprisingly, is that the assistance is enough to meet their essential needs. That seems straightforward but can be tricky in reality.

In Turkey, for instance, the government was understandably concerned about refugee grants exceeding the amount of social assistance for Turkish citizens, especially since the allowance was distributed (though not financed) via the same national social protection system.

While linking with social protection systems might make aid delivery easier and cheaper for humanitarian actors than building parallel structures, it can challenge the definition of grant sizes, particularly when political concerns are at play. From the recipients’ perspective this can considerably reduce effectiveness of the transfer.

To compensate for the lower transfer value, aid organisations consequently introduced a range of top-up payments, for example for educational purposes or disabilities, to ensure the transfers met actual needs.

In Turkey and Jordan recipients spend less time and have lower travel costs because ATM are widespread and banks partly allow withdrawals from another bank’s ATMs free of charge.

On the flipside, in rural Colombia many recipients travel up to three hours in order to access their assistance. To reduce travel time, some take local transportation, which can negatively impact on the money available to households.

This said, Syrian women in Jordan who might live closer to ATMs, told us that they depart early in the morning to beat the queues at the local mall when the assistance arrives, so that they won’t spend too much time in line.

While some costs are easily quantifiable, such as transportation fares, others can be indirect and can include the loss of income for not being able to work, or organising and paying for childcare while collecting the assistance. For aid agencies, this poses some challenges on how to reflect these costs. Yet, all costs need to be included in the transfer value to ensure geographical equity.

This means that organisations have to coordinate their distribution timing, so recipients can cash out the assistance from multiple organisations at once. The coordination of a single consolidated payment is as important as the use of a single payment instrument. Both should go hand in hand. Yet, assistance delivered through a single payment mechanism can also carry some risks to beneficiaries.

Interviewees told us about their concerns of losing ATM cards or accidentally blocking them, as – in some cases – waiting for a replacement card could take up to two months, leaving them without access to their assistance.

4. Get communication right

So, what if bank cards get lost or payments don’t arrive when they are expected? Aid recipients’ most common answer was that they don’t know who to contact. In Kenya, only 16% of them knew where to inquire about it or the timing of their assistance.

It is not surprising that our focus groups showed that effective communication with aid agencies is one of the key needs of recipients. And although aid agency staff interviewed assume that consolidation of transfers or using a unified delivery platform enhances effective communications because it simplifies and limits the number of interactions, often recipients had to be in contact with multiple organisations or did not know which organisation to contact. Investment in an effective communication system should be at the core of any programme design decision.

The main takeaway is that, from the recipients’ perspective, there is no inherent 'Value for Money of scale'. While scale can improve economy and cost-efficiency by helping aid agencies reach more people, it does not necessarily increase effectiveness or equity, particularly if scale limits flexibility.

For households, the primary determinant of effectiveness is the ability of the transfer to meet their needs. This includes both the size of transfer value, and the predictability and timeliness of its delivery. From their point of view, how the aid bureaucracy organises itself matters less than how accessible, equitable and well-communicated the assistance provided is.

There is no one-size-fits-all to achieving value for money in cash and some smaller, more agile models will be needed too. Thus, maximising quality for recipients will include drawing on the comparative advantages of a range of different actors and a series of operational models.

These are some key findings of the report “Cash assistance: how design influences value for money”. You can also have a look at a corresponding policy brief for international donors.