Deciding between cash-based and in-kind distributions during humanitarian emergencies

Abstract

PurposeThe purpose of this paper is to provide an analytical model to decide between cash-based and in-kind distributions during emergency responses considering the needs of beneficiaries and market conditions. To allow the switch between modalities, a preparedness framework for humanitarian organizations (HOs) is provided.Design/methodology/approachA mathematical model is proposed to help humanitarian responders make quantitative decisions on the type of programs to implement in emergency responses. The model was applied to a field response by an international HO during the COVID-19 emergency in Colombia.FindingsCash-based and in-kind distributions are not mutually exclusive response modalities during emergencies, and the real needs of beneficiaries and market effects should be included in the modality selection decision to improve program effectiveness.Research limitations/implicationsThe research is focused on short-term immediate response to emergencies; the proposed model assumes favorable market conditions and limits the aid options to direct in-kind and multipurpose cash assistance, excluding other types of cash transfers.Practical implicationsThe research outlines practical preconditions to operationalize switching between programs during an emergency. The study provides evidence that HOs should consider dynamics decision tools to select aid modalities and evaluate their response depending on market conditions.Social implicationsConsidering aid modality as a dynamic decision and including the needs from beneficiaries in the choice can have profound impact in the dignifying of humanitarian response to emergencies.Originality/valueThe quantitative model to decide between aid modalities is a novel approach to include beneficiaries' needs and market dynamics into humanitarian supply chain research. The preparedness framework closes the gap between the emergency preparedness literature and the operational constraints that organizations face for fast program implementation.

Guest editorial: The COVID-19 impact on humanitarian operations: lessons for future disrupting events

“…Though recently multiple studies have been witnessed (Chakraborty et al , 2021) applying technological solutions towards secure transportation during pandemics, further literature building on “How the technology could play the role for quick, safe, and secure transportation of man and materials to the epidemically affected terrains” is an awaited challenge to address. Also, as an emergency response, cash donations, charities or in-kind aids proved to be effective reliefs to protect beneficiaries from market externalities (García Castillo, 2021). Therefore, the role of ICT mediums such as television, e-mails and social media must be pitched upon to re-frame CSR and NGO’s fundraising policies and supply emergency relief operations during pandemics.…”

Cash and voucher assistance along humanitarian supply chains: a literature review and directions for future research

“…Consequently, inflation at the macro level is a concern for HAs as it diminishes the real value of cash assistance. CVA may also cause inflation in areas of implementation by disrupting the supply and demand balance in local markets, to the disadvantage of beneficiaries (Sabates‐Wheeler and Devereux, 2010 ; Castillo, 2021 ). In some situations, CVA may serve as a supply‐side intervention to provide temporary assistance to the unemployed or to assist in economic development through cash‐for‐work programmes (Kelaher and Dollery, 2008 ).…”

“…Preference may depend on beneficiaries' characteristics as well, such as their residential location, gender, race, culture, and age. Increasingly, beneficiaries prefer CVA to in‐kind assistance when both options are feasible (see, for example, Maxwell, 2007 ; Doocy et al, 2011 ; Castillo, 2021 ). Women seem to be better managers of cash (Kelaher and Dollery, 2008 ) and sometimes opted for in‐kind assistance over CVA if the source was more secure (Ryckembusch et al, 2013 ).…”

“…Second, CVA programmes involve coordination among actors to manage and monitor visibly the flow of cash and information among the network of actors along the supply chain, creating an audit trail (Castillo, 2021 ). Building trust among all members of the CVA supply network is also vital for the reception of cash donations, contracting of service providers, and the facilitation and distribution of cash to beneficiaries.…”

Reverse supply chains of non-profit organizations for textile reuse

“…Financial support is crucial for the NPOs' charitable work. In response to acute emergencies and long-term humanitarian projects, NPOs use donations to provide cash-based or in-kind aid for the target population in need (Castillo, 2021;Piotrowicz, 2018). To stabilize their funding situation and decrease their dependency on monetary donations, NPOs actively grow commercial activity to generate additional revenue streams (King, 2017).…”