Cash & Vouchers
An increasing number of humanitarian projects funded by DG ECHO include the distribution of financial support to beneficiaries. ECHO can consider funding the following financial support to beneficiaries :
- Unconditional cash transfers (grants): cash transfers given directly to the beneficiary to increase their purchasing power to meet their basic needs without the beneficiary having to do anything specific to receive the benefit;
To know more, see also the FAQs nr. 106;
- Conditional cash transfers (e.g. cash for work, cash for training, cash for repatriation, etc.): the beneficiaries are required to fulfil a specific obligation or activity to receive the transfer (such as attending school, planting seed, establishing a livelihood, demobilise, etc.). Therefore, conditionality refers to what beneficiaries are required to do to receive the transfer and not to conditions on how they subsequently use the resources. Cash transfers can be done through distributions of cash or value-based coupons;
- Vouchers, tied to a set of pre-defined commodities or services. If the vouchers are not tied to a set of predefined commodities or services, then they will be treated as cash payments.
- Multipurpose cash transfer assistance can be defined as a transfer (either delivered in several tranches regular or as an ad-hoc payment) corresponding to the amount of money that a household needs to cover, fully or partially, their basic needs that the local market and available services are able to meet appropriately and effectively.
Multi-purpose transfers demand greater coordination between humanitarian actors and donors to assess needs and to translate this into a single monetary value, the Minimum Expenditure Basket (MEB). Realistically, humanitarian assistance will contribute to this figure. Beneficiaries will be faced with the need to prioritise how best to use the assistance received so as to ensure that their basic needs are covered.
We refer to “Cash-based” when speaking about both cash and not-tied voucher transfers.
Conditions of eligibility
Article 8.2 of General conditions for NGOs enumerates the financial support to beneficiaries among the Direct costs that can be considered eligible provided that the conditions that are established in the Article 11 of the General Conditions are respected.
Cash and Vouchers in the Single Form
The financial support to beneficiaries, including financial support distributed in cash and the costs of its distribution, is eligible if the following elements are defined in the Single Form:
- The purpose of the cash-based transfer;
- The amounts of cash transfer that will be paid per beneficiary and the criteria for determining the exact amount ;
- The definition of the persons or categories of persons which may receive such financial support and the criteria to give it. The criteria for giving financial support means that the partner needs to explain why certain categories of persons should be given financial support. For example categorical targeting of Pregnant and Lactating Women or returnees, or use of criteria such as Food Consumption Score or lack of access to water, etc.;
- The specific controls, as well as the monitoring and the reporting procedures;
- A comprehensive risk assessment of the chosen modality or modalities. For each of the major risk factors the proposal must indicate
- The specific measures to be taken during implementation to minimize the risks (security corruption inflation and/deflations);
- The arrangements to monitor whether these risks develop, and
- If so, the response measures to mitigate the consequences (e.g. switch to another transfer modality);
- The maximum amount of cash transfer that can be paid to a beneficiary, which shall not exceed EUR 60 000 (except where the financial support is the primary aim/modality of the action, in which case, the amount paid to each beneficiary could exceed EUR 60.000.);
- The net amount actually transferred to the beneficiaries per modality used (i.e. total amount transferred in cash vs. total amount transferred in voucher vs. other).
- In addition to the elements above, in case of conditional cash transfers, the partner shall define the conditionality (e.g. such as attending school, planting seed, building shelter, demobilizing, etc.) and the reasons for opting for conditional cash.
In case the financial support takes the form of a prize, the Partner shall give such financial support in accordance with the Single Form, which shall at least contain: the conditions for participation; the award criteria; the amount of the prize; the payment arrangements; the conditions and criteria for the appointment of an independent jury awarding the prize.
These infromation should be provided in the following section of the Single Form
- Assessment: in particular, inclusion of a market assessment;
- Logic of intervention under Results: in the Transfer Modalities tab, under each result;
- Beneficiaries: definition of the persons or categories of persons which may receive financial support;
- Activities: different type of activities that may receive financial support in case of conditional financial support and criteria for giving the financial support;
- Assumptions and risks: the monitoring and supervision mechanisms;
- Financial report: The net amount actually transferred to the beneficiaries per modality used (i.e. total amount transferred in cash vs. total amount transferred in voucher vs. other);
- Monitoring and evaluation.
Finally, if financial support to beneficiaries is not agreed at proposal stage, or if financial support was agreed to, but some of its features are modified during the implementation of the Action (amount of financial support, the criteria, the purpose of the financial support, the definition of the persons or categories of beneficiaries, the possible conditions, the monitoring or supervision mechanisms), the partner shall ask ECHO's prior approval through the amendments by mutual consent procedure.
Please refer to DG ECHO Decision Tree.
References & useful links