Refugees and Relocated Workers Prefer Holding CashMoney in physical form such as banknotes and coins. More in Their Hands

In the first months after the Russian invasion, Ukrainian refugees in the European Union faced exorbitant commissions when attempting to exchangeThe Eurosystem comprises the European Central Bank and the national central banks of those countries that have adopted the euro. More their funds for local cash. In April, the Council of the European Union recommended that E.U. member states allow refugees to convert up to 10,000 hryvnias ($272.11) without charges at the official exchange rates of the National Bank of Ukraine (NBU).

Since then, the Narodowy Bank Polski, the Deutsche Bundesbank, the National Bank of Belgium, the Sveriges Riksbank, De Nederlandsche Bank, the Bank of Italy, the Swiss National Bank, the Central Bank of Malta, and the Latvijas Bank signed agreements with the NBU. Most had ended or are coming to an end, as “such transactions have been declining in amount and number compared to when they first occurred,” said the NBU.

Cash has also proven valuable for companies relocating operations outside of Russia. In December 2021, Natalie Kaminski (the owner and CEO of software developer JetRockets) started creating cash reserves for salaries in case SWIFT payments stopped working. After the invasion, Kaminski relocated two-thirds of her staff from Tver (Russia) to Batumi (Georgia). Kaminski collected $1,000 in cash from different ATMs to take to the company’s new office.

Multipurpose Cash AssistanceThe term cash assistance refers to direct cash transfers to individuals, families and communities in need of humanitarian support in lieu of in-kind commodities or direct service delivery. The term can be used interchangeably with ‘cash-based interventions’ (CBI), ‘cash transfer programming’ (CTP), ‘cash and voucher assistance’ (CVA), and ‘cash-based programming (CBP)’. It does not include fund transfers from donors, payment of incentives to the staff of local authorities, paymen... More (MPC) Remains Critical

“Our fridge is empty, so we need to buy food. Some people have tried to give us food, but I feel ashamed. I want to buy it myself.” – Rozalia, Ukrainian refugee in Poland

Humanitarian and non-governmental organizations distribute cash assistance in Ukraine and other countries, as this relief is most effective during crises.

• “When we give people blankets or plastic sheeting, what we often have seen over the years is that people just sell them to get cash. Just giving them the cash enables them to make their own decisions. Giving vendors the opportunity to make moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More, and they pay their staff – there is a virtuous cycle of investment when we give people cash,” said Bob Kitchen from the International Rescue Committee (IRC).
• “From our previous experience with cash assistance, we know it is a dignified approach to providing aid as quickly and efficiently as possible,” said Jagan Chapagain, secretary general of the International Federation of Red Cross and Red Crescent Societies (IFRC)
• “Unlimited and unconditional access to cash is a crucial part of the response to the ongoing war – both in Ukraine and in the neighbouring countries. […]. Cash arrives immediately, can be turned into what people really need and respects the choice of refugees,” said Dominika Arseniuk at the Norwegian Refugee Council (NRC). In Poland, 79% of NRC’s assistance recipients withdrew cash from their cards.

In Ukraine, the United Nations High Commissioner for Refugees (UNHCR)  distributes cash grants to families at branches of the country’s postal services. In Poland and Moldova, UNHCR officers disburse funds on ATM cards. To distribute micro-grants in Ukraine, Boston-based nonprofit Cash For Refugees (CFR) uses PayPal, credit cards, bank transfers, and good old ATM withdrawals.

• “Cash puts the decision-making about what is most needed into the hands of the people being assisted,” said Andrew Hopkins, chief of the UNHCR’s digital identity and registration section.
• “It’s better that people get the cash and can buy what they want,” says Karolina Lindholm Billing, Ukraine representative for the UNHCR.

Digital Alternatives?

International donors have sought alternatives to traditional relief charities to support Ukraine.

• “People have this desire to cut out the intermediary – the middle man – and go directly support those in need,” said Brian Mittendorf, an accounting professor at Ohio State University who focuses on nonprofits.
• To give funds to Ukraine, donors have used the crowdfunding platform GoFundMe and Miles4Migrants, a site for airline miles donation. American Express, hotel chains (Hilton and IHG), and several airlines (Delta, United, JetBlue) set up dedicated sites to donate rewards, points, and miles to Ukraine.
• Some people booked short stays in Ukraine through Airbnb without the intention of going. “More than ten bookings came in today. This was surprising, it’s very supportive at the moment,” said Volodymyr Bondarenko, 36, owner of a one-bedroom rental.
• Other customers bought digital products from Ukrainian sellers on Etsy, an online marketplace. “I never thought so many people who don’t know me would like to help me and my family,” said Olena Shevtsova, who sells woven goods on Etsy.
• In March, PayPal allowed Ukrainians to send and receive money in foreign currencies and transfer funds from their PayPal Wallet to Visa and Mastercard debit and credit cards. Previously, PayPal users could only send money internationally, not receive it.

Cash Remains the Most Efficient Way to Help Ukraine

While these alternatives might appeal to donors in developed countries, Ukrainians might not use these donations due to the war’s destruction.

• “When stores have been closed for weeks, communication infrastructure damaged, and a city is being bombed, it is unclear whether those affected can even access the cash from these [digital] transactions, let alone use it to address these urgent needs,” said Katherina Rosqueta, the founding executive director of the Center for High Impact Philanthropy at the University of Pennsylvania.

Those with dire needs and the digitally excluded might not get help.

• “People who are injured or elderly, who have mental health issues, or who are not tech-savvy would be left behind if most of us donated directly to victims’ bank accounts rather than to efficient charities working in the region that are more equipped to provide help equitably to everyone who needs it,” said Laurie Styron, executive director of CharityWatch.

This post is also available in: