The development community has been heavily researching and discussing cash transfers over the past decade, publishing hundreds of studies and scores of articles on their impacts and potential to alleviate poverty.

At BRAC, the world’s largest NGO in the Global South working to combat inequality worldwide, we have seen the value of cash transfers firsthand. We have also seen how augmenting cash with a holistic set of interventions—a “cash plus” approach—can enhance their long-term impacts. “Cash plus” interventions can empower people who face the greatest marginalization to build long-term, resilient livelihoods and create a pathway out of extreme poverty. But what can other programs and policies learn from these interventions to generate sustained impact?

In 2020, worldwide cash transfer benefits nearly doubled, with 214 countries and territories planning or implementing over 400 cash transfer programs in response to the pandemic. These interventions are fast and cost-effective, and research shows they can increase people’s consumption, assets, and food security.

Cash transfers can play a critical role in helping people meet their basic needs, particularly during a crisis like the COVID-19 pandemic. During the first wave of the pandemic in Bangladesh, BRAC transferred to each of 100,000 food-insecure families the equivalent of $18 USD. This is enough to feed a family of four for about two weeks, but families who are marginalized and living in extreme poverty need further support to build their resilience to shocks like COVID-19 and climate change, which disproportionately affect them. The challenge is combining the short-term effectiveness of cash transfers to meet the immediate needs of people in extreme poverty while also enabling them to build sustainable sources of income.

“Cash plus” interventions aim to achieve this combination, building on the benefits of cash transfers by immediately addressing the multidimensional nature of extreme poverty and empowering participants to establish livelihoods, save income, integrate into their communities, and avoid falling back into cycles of poverty.

Combining cash and resilient livelihoods prevents people from falling back into extreme poverty when the next shock hits.

For people to escape the poverty trap and stay out, they must not only receive a “big push” in the form of a capital transfer but also be equipped with the skills, resources, and tools to avoid losing their livelihoods or going into debt when crisis strikes. This is why building a resilience lens into program design is essential. By combining temporary support for basic needs like cash transfers with training on coping with crises, saving money, and setting up multiple income streams, “cash plus” programs enable people in extreme poverty to withstand major shocks like natural disasters, disease, or economic downturns.

Read the full article about cash transfer programs by Imran Matin at Stanford Social Innovation Review.