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Cash donations more useful than others after disasters

Categories : Cash is efficient
October 26, 2017
Tags : Cash-based assistance, Demand, Disaster, Social cohesion
Following Hurricane Harvey, organisations on the ground are overwhelmed with material donations and encourage people to donate cash instead.
Communication Team / Equipo de Comunicación

Hurricane Harvey’s landfall in Texas left numerous cities severely damaged, with thousands of houses destroyed. Many NGOs, charities and volunteers went to help the victims on the ground and people from all around the country are sending tonnes of goods such as water, clothes and groceries. Yet, because of the overwhelming amount of donated goods, organisations on site have started to encourage people to offer cash rather than in-kind aid.

Basic commodities such as drinking water, food and temporary shelters are undoubtedly necessary in the wake of natural disasters, but not over the long term. Indeed, many communities hit by Hurricane Harvey are progressively resuming operations, providing victims access to basic products. As a result, the United States Agency for International Development (USAID) and many charities now recommend giving money rather than goods. One of them, the organisation GiveDirectly, have been providing afflicted families with Visa prepaid debit cards loaded with $1,500. The Red Cross is also giving $400 cash grants in the Houston area, along with other goods and services.

Cash-based assistance is extremely useful as it enables victims to buy exactly what they need, when they need it: be it medicines, warm clothes or kitchen supplies. As a result, cash donations accelerate the resumption of businesses in devastated regions, thus relaunching the economy. What’s more, cash is easier to transport and store than material goods such as furniture, which require time and money to transfer to destroyed areas. Organisations deplore the amount of money spent on the delivery of goods stating that cash transfers would be more efficient and effective for both their activities and the victims. In addition, the storage and sorting of goods require a lot of energy that could be used more efficiently – for reconstruction purposes, for example.

Cash grants are flexible and durable, contrary to food, and can be easily distributed between victims for any use they might need, including elsewhere within the country. Indeed, many families were left without anything after the hurricane and simply wish to start a new life somewhere else. Cash assistance also allows victims to pay for services – often more urgent than goods – such as to restore electricity or to rent a car.

Cash aid is a subject of debate across governments but it is actively promoted by many organizations present in poorer countries. Indeed, even the OECD encourages such practices through its recent practical guide of humanitarian professionals. Studies led in refugee camps in Lebanon demonstrated that giving money rather than stuff not only contributes to creating a market economy, but also helps restore human dignity by enabling people to choose what they need and meet their own priorities.

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