Multipurpose Cash Grants (MPGs)

Why is this theme important?

Multipurpose Cash Grants (MPGs) are unrestricted cash transfers that place beneficiary choice and prioritisation of his/her needs at the forefront of humanitarian response. MPGs are delivered as a single transfer (regular or one-off) corresponding to the amount of money a household needs to cover, fully or partially, a set of basic and/or recovery needs. This short animation video below  serves as an introduction to Multipurpose Cash Grants and provides an overview of their use, advantages, and implications for the different actors of the humanitarian system.

 

By their nature, MPGs are the assistance modality which offers people affected by crisis a maximum degree of choice, flexibility and dignity. There is also growing evidence that they are more cost-efficient and cost-effective to meet multiple needs. As visualised in ‘Figure 1 – MPGs as a foundation for sector-specific interventions’, MPGs can also contribute to more successful sector-specific interventions, by ensuring basic needs are covered and thus enabling crisis-affected persons to utilise in-kind goods and access services.

Supporting crisis-affected and displaced people as economic actors

MPGs encourage humanitarian actors to better understand the local economy and market dynamics in a holistic way, whether the program objective is to meet sector-specific needs or a range of needs that may differ from family to family.

Figure 1: MPG : as a foundation for sector-specific interventions. Source: UNHCR, CaLP, DRC, OCHA, Oxfam, Save the Children, WFP (2015), 'Operational Guidance and Toolkit for Multipurpose Cash Grants'

 

When are MPGs an appropriate response?

MPGs can be used regardless of context – urban and rural, rapid and slow onset, chronic and acute crises, and even natural and complex disasters. What is essential is a context-specific Situation and Response Analysis that prioritises a thorough assessment of the appropriateness and feasibility of different humanitarian interventions, including in-kind and other cash-based responses. As such, MPGs can be used alone or alongside other sector-specific interventions. The Operational Guidance and Toolkit for Multipurpose Cash Grants was developed by a consortium of agencies in 2015 and provides comprehensive and practical guidance for humanitarian actors to assess the feasibility, conceptualise the design and structure the implementation of MPGs.  

What are the implications of the use of MPGs for humanitarian actors?

The potential gains in programme quality from MPGs (measured as cost-efficiency, cost-effectiveness, and accountability) mean that there is strong policy momentum for a scale-up of their use. However, there are concerns that the push for MPGs does not fully consider concerns raised by some sectors regarding the appropriateness of MPGs for achieving sector outcomes.  Other concerns include the challenge of integrating MPGs into wider humanitarian response (including the coordination architecture, and protection-focused programming), and concerns around the traceability and accountability. 

MPGs necessitate new ways for humanitarian actors to collaborate, at each stage of the programme cycle, and across sectors. Many solid tools exist to support collaboration for the design and implementation of MPGs, but thus far have not been systematically adapted for interagency use. Crucially, there are no interagency models or standards for collaboration in large-scale MPG responses.   

What should progress look like in this area?

The potential of MPGs cuts across a number of the objectives of the Global Framework for Action, in particular Global Objective #4, Global Objective #5 and Global Objective #6. For this potential to be maximised, by 2020, this will mean that:

  • Multi-sectoral needs and markets assessment information is used to build an understanding of basic needs and contributes to multi-sectoral response analysis
  • There is a common understanding of how MPGs can contribute to meeting basic needs, and how they should be complemented by other interventions
  • Multi-sectoral outcomes of MPGs, as part of a broader humanitarian response, are systematically monitored
  • The challenge of integrating MPGs In the humanitarian coordination architecture has been addressed
  • An evidence base for the quality (measured as cost-efficiency, cost-effectiveness, and accountability) MPGs has been developed, which considers what operational model is most appropriate to maximise quality, by context

Ongoing initiatives and news

ECHO ERC Consortium for ‘Increasing the Uptake of Multi-Purpose Cash Grants in Emergency Responses’ .

This Save the Children-led project aims to develop processes and tools to enhance inter-agency capacity to collaboratively design emergency responses that take MPG to scale. The Consortium is developing and testing new methodologies, supporting the development of environments conducive to the uptake of MPGs, as well as reviewing new models of collaboration around MPGs, with the goal of ultimately increasing the efficiency of humanitarian response through a greater uptake of quality, collaborative MPGs.

Between April and September 2017 the Consortium piloted these approached and tools in Borno State Nigeria. Consortium members worked closely with local and national humanitarian actors and outputs informed the Humanitarian Needs Overview and the Humanitarian Response Plan.

A second pilot began in the Somali Region of Ethiopia and will run between November 2017 – March 2018. Beyond the pilots the Consortium is working with the Global Cluster Coordination Group and other relevant initiatives to gather their feedback on the Consortium’s work, raise awareness of the Consortium’s aims, and ensure the Consortium’s outputs are of wider use to the humanitarian system.

Links to the Consortium’s key tools can be found in the resources section of this page. Please note that all tools will be revised following the Ethiopia pilot.

 

Definitions

A Multipurpose Cash Grant (MPG) is defined as a cash transfer (either regular or one-off) corresponding to the amount of money a household needs to cover, fully or partially, a set of basic and/or recovery needs. MPGs are by definition unrestricted cash transfers.

The Minimum Expenditure Basket (MEB) is defined as what a household requires in order to meet basic needs – on a regular or seasonal basis – and its average cost over time. Basic needs are defined by affected households themselves, International Humanitarian Law and Sphere Standards. MPGs will contribute to the MEB, but can also include other one-off or recovery needs.

Resources 

ERC – MPG Consortium tools (all of these are drafts and will be revised following the current pilot in Ethiopia):

Upcoming ERC – MPG Consortium documents and tools (due April 2018)

  • Partner Capacity Survey
  • Government Capacity Survey
  • The Delivery Guide: A Humanitarian’s Compass to the Payments Landscape
  • SOPs for MPGs
  • Learning agenda on operational models for Cash Transfer Programmes (CTPs).