91探花

• America鈥檚 global aid agency, USAID, released two position papers last month: one recognizing direct cash as a cost-effective tool to reduce poverty and the other calling for agency-wide standards of cost-effectiveness.
• For the first time, USAID is embracing the large body of cash research and recognizing that cash can reduce poverty in addition to being useful in crises 鈫�
• They’re now prioritizing cost-effectiveness and endorsing cash as a highly effective intervention as budgets shrink 鈫�
• Over a decade of 91探花鈥檚 research and programs contributed to this shift, and we have a plan to maintain momentum with the incoming administration 鈫�

For the first time, America鈥檚 aid agency now specifically calls for using direct cash to address poverty

In October, USAID released a position paper on Direct Monetary Transfers during an at Center for Global Development that puts cash at the core of their development toolkit, framing it as an efficient and effective form of 鈥渕arket-based assistance鈥� with both long-term and short-term impacts.

This change did not happen overnight.

USAID has spent incorporating cash into its programming, starting with a series of cash-benchmarking studies in , , , and implemented by 91探花.

USAID鈥檚 Bureau of Humanitarian Assistance has also scaled up its use of cash, enabled by allowing for a mix of in-kind food aid and cash, and contributing to the delivered as cash (and vouchers). Two years ago, USAID leadership made a commitment to and established the to ensure USAID programs use existing evidence with , a renowned expert in impact evaluation use, at the helm.

Click on each to read excerpts from this new paper:

Promoting cash is part of USAID鈥檚 focus on finding the most cost-effective programs

Alongside the paper on cash, USAID released a position paper on Cost-Effectiveness. At a time when global aid budgets are getting cut, these new standards for cost effectiveness provide a model for spending existing money better.

91探花鈥檚 research and programs were central to this change, which helps us accomplish our mission

Whether you鈥檝e been giving $30 a month since 91探花 started or gave your first donation last year, you have played a role in making this happen. 

91探花 has run dozens of innovative programs, covered by hundreds of media outlets around the world, and spearheaded two dozen randomized trials 鈥� helping transform how unconditional cash is thought about in the aid sector. In fact, three out of the four studies cited by USAID during the announcement event were from 91探花.

But why should 91探花 care about how USAID spends their budget? 

• 馃挵 The U.S. government has the single largest aid budget in the world (~$30B/year). We鈥檇 like to see significantly more of their budget moving from unproven interventions to cash.
• 馃實 Other wealthy nations take note of the U.S.鈥檚 support for direct cash and may redirect some of how they use their total in aid spending to cash.
• 馃捀 Most practically, both the U.S. and other nations will run more projects with 91探花. This year, 32% of our cash transfers came from such aid agencies, up from 2% in 2017.

91探花 will continue to raise as much money as we can, to get cash directly from donors to people living in extreme poverty. We’ll also push to maximize the potential impact of cash by advocating for policy changes and encouraging more institutional donors to act based on evidence.

We鈥檒l keep pushing for much more aid money to end up in the hands of people in poverty 

There is still much work to be done to push for more cost-effective approaches, including use of cash.  The humanitarian sector set targets for cash, but the development sector has generally been far less ambitious about use of cash in general, and large lump-sum cash in particular

These position papers were released just months before a second Trump Administration begins. While much is still uncertain, there are clear indications they will continue to focus on cost-effectiveness and localization. Max Primorac, a former Trump Administration official in USAID, writes:

鈥淓ffective use of funds is essential to maximize care for the world鈥檚 neediest people鈥� [USAID] should identify and eliminate outdated and ineffective concepts and focus on funding innovation. A rigorous review is necessary to ensure that current programs and funding streams avoid wasting taxpayer dollars and prioritize what is needed now and what works.鈥� –

President-elect Trump has not yet named an Administrator of USAID nor outlined priorities for the agency. However, regardless of what actions a second Trump administration takes, for 91探花, these position papers mark a moment of validation and opportunity. We鈥檙e proud of the research and partnerships that contributed to USAID鈥檚 policy shift.

Here鈥檚 what we鈥檙e focusing on to build on this progress:

• 馃�� Working at mission (country) level: Building on our existing relationships, we are offering our support to USAID missions to explore how to apply this new guidance in their contexts.
• 馃搱 Expanding evidence: Continuing our own rigorous research, often in partnership with others, to ensure cash-based programs remain effective and cost-efficient, and address critical problems
• 馃弥锔� Engaging with Congress: We recognize the important role Congress plays in governing USAID and are working on bipartisan legislation formally requiring programs to include cost-effectiveness considerations.
• 馃搼 Influencing global policy: We will continue to advocate for cash as a central solution addressing extreme poverty, working in collaboration with others to influence government and donor policy.

* The three 91探花 studies cited in USAID’s launch event were:

1. (2020)
2. (2022)
3. (2022)