Cash Transfers & Locally-Led Action to Address Loss & Damage

Cash Transfers & Locally-Led Action to Address Loss & Damage

By Ben Wilson (SCIAF), Yvonne Namala-Murindiwa (Give Directly), Richard Kusseni (CADECOM), Gertrude Siame (Caritas Zambia) and Philip Nyasulu (Trocaire Malawi)
04 / 06 / 2024
At the end of 2023, GiveDirectly partnered with the Scottish Government to deliver a first of its kind project that is providing large unconditional cash transfers of ~$750 to around 2700 households displaced by Cyclone Freddy in Southern Malawi. Photo credit: Skip Russell via Flickr.

We are now in the era of Loss and Damage. At COP28, the first hundreds of millions of dollars were pledged to the Loss and Damage Fund. The board of this new fund is under significant pressure this year to quickly operationalise the fund; getting the pledged money out the door to projects, and coming up with a clear strategy to generate and spend future (hopefully more significant) sums of money.

How exactly this money can reach people suffering from climate impacts remains a topic of much discussion. There is a strong appetite from political leaders and members of the Loss and Damage Fund Board to make sure that the fund is designed precisely to respond to the needs of affected households. This is crucial. It is vital that this pledged money is not wasted on overly onerous bureaucracy, that it is rooted in the experience of real people, that those people have the ability to shape how the money is spent, and that they can ultimately access the help they need. Loss and Damage is in many ways a political concept with its origins in the geo-politics of global climate negotiations. Now that there is money on the table, we need to make sure to translate this into real meaningful action, remembering that ultimately Loss and Damage is about people; people whose homes have been flattened by cyclones; farmers who have lost their land; communities who no longer have a place to call home. It needs to work for them.

Over the past 6 months, a number of projects in Zambia and Malawi funded by the Scottish Government have utilised “cash transfers” to help communities address losses and damages. This approach has been identified as a means through which to urgently get assistance to households in a way that delivers dignity, autonomy and freedom.

If funding to address losses and damages is about getting support to people to compensate them for climate impacts they are unjustly enduring, cash transfers could be seen as the most appropriate means of doing so. Much like your personal insurance policy may pay out for an accident that is not your fault, or a court may rule monetary compensation is due to the victims of crime, cash transfers for Loss and Damage do the same. However, others may take a different view. If focusing on household level cash distribution rather than provision to local authorities, say, cash transfers could be seen to be problematically individualistic, privileging household level solutions (like fixing your home) over solutions with communal benefit (like repairing your local school), and fail to embed justice and systems of accountability in our global response to Loss and Damage.

This article explores some of these arguments based on four projects funded by the Scottish Government in Malawi and Zambia, and draws out some of the learnings to inform future practice.

Give Directly

At the end of 2023, GiveDirectly partnered with the Scottish Government to deliver a first of its kind project that is providing large unconditional cash transfers of ~$750 to around 2700 households displaced by Cyclone Freddy in Southern Malawi. Through maintaining the unconditionality of the cash transfers, the project applied a values-based understanding of Loss and Damage, which posits that what counts as a loss or damage is partly determined by how an affected community values and depends on it. Programme recipients are free to spend the cash on whatever they value most as they move forward on a path to recovery and reconstruction, including means to rebuild their homes in new locations and set up new livelihoods

Reaching affected households posed challenges, as many had dispersed to various locations following the disaster. However, support was extended to entire villages after their relocation and enabled affected households to address a number of short-term needs (e.g. food, water, and medical needs) and to rebuild their homes and businesses in the long-term. 96% of recipients reported spending their transfer on productive assets, including building a new home, purchasing livestock, starting a new business, and education. Moreover, the ripple effects of the lump sum cash transfers extended beyond direct beneficiaries, generating positive economic spillovers to non-recipients, who found economic opportunities through selling and transporting goods for cash recipients and also providing construction services for instance. The project also addressed non-economic aspects of loss and damage, by enabling agency (affected households no longer relying on other people to feed them) dignity (people had cash to purchase  decent clothes and shelters), and healing of disrupted social networks (whole villages were provided the means to relocate enabling reconnections to friends and family after the disaster).

Trocaire Malawi

With financial support from the Scottish Government through SCIAF, Trócaire Malawi in partnership with Churches Action in Relief and Development (CARD) implemented a microgrant project where cash envelopes of about £2,500 (MK5,000,000.00) were distributed to  targeted communities to support them to implement anticipatory actions based off identified community priorities as outlined in their contingency plans. While communities are often supported by different organisations to develop contingency plans, by designing and implementing activities aimed at reducing the impact of anticipated disasters, these contingency plans are rarely supported with resources for their implementation. The microgrants which were distributed at a community level helped the target community implement their priority activities to cushion them from the impact of anticipated disaster in line with their contingency plans.

From the implementation of the project, there was observable improvement in community relations and community ownership of the projects because the communities themselves were in full control from the design, prioritisation, procurement, implementation and monitoring. It is also believed that everyone from the community will provide security of the implemented activities. The only notable disadvantage of this approach is that there is limited focus on  individual needs as the contingency plans usually look at  community needs and not the needs of individual households. There is however a focus on how to address the needs of specific vulnerable groups for example by ensuring the access to safe places in case of evacuations for vulnerable groups such as the elderly and people with disabilities.

Caritas Zambia

Caritas Zambia, with support from Caritas Kabwe and funding from the Scottish Government, implemented a three-month project from January to March 2024. The project aimed to provide cash transfers for food to 300 households affected by droughts and floods. Beneficiaries included women, children, the elderly, persons with disabilities (PWD), and vulnerable men. Each participating household received $16 per month.

The cash transfers were found to foster a sense of independence among households, enabling them to collectively decide how to use the money, which improved their financial planning skills. This helped households financially plan at a time of great uncertainty, providing them with enhanced financial security and means of future planning.

As a result of the cash transfers, households were able to afford three balanced meals per day and save some money, investing it in community savings groups to buy goats for profit. Additionally, households purchased essential items like uniforms, books, pens, shoes, and school bags for their children and covered medical expenses for their families.

However, the project's duration was insufficient to make a significant impact on addressing the full scale of losses and damages being experienced. At this scale, it was felt that this intervention was more akin to a traditional humanitarian response, rather than fulfilling a more holistic vision of a programmatic approach to Loss and Damage.

CADECOM (Caritas Malawi)

With funding from the Scottish Government via SCIAF, CADECOM conducted a short-term Humanitarian Emergency Fund (HEF) project in early 2024 to address the food crisis in Malawi which has been precipitated by an el nino affect, compounded by climate change. The project primarily focused on providing cash transfers to vulnerable households to assist them in meeting their short-term food needs during a period of scarcity and rising costs.

4520 households received £45 (MK 100, 000). The majority of the beneficiaries (96.4%) reported food purchase as their primary use of the received cash, with others also reporting spending on health care, farm inputs and other livelihood support costs. The project was implemented in close collaboration with government stakeholders at both district and community levels, through disaster risk reduction offices and played a crucial role in achieving this success.

While the project accomplished its main goals and objectives, post-distribution monitoring surveys and government reports highlighted additional needs. Malawi continues to grapple with the effects of El Nino and floods in certain regions, exacerbating the food crisis and potentially undermining the progress made by the Scottish Government-funded response. Furthermore, it is evident that the food crisis in Malawi is resulting from a number of deeply rooted issues resulting from lack of investment in adaptation and a failure to implement a sustainable food systems approach, which means that cash transfers will only ever provide temporary relief.


Direct unconditional cash can be seen to be a highly cost effective and a scalable approach to distributive climate justice, and is a model which advocates for a paradigm of participant-first & participant-centric responses to Loss and Damage. Large lump sum cash transfers, delivered directly to people or communities affected and displaced by climate change effects demonstrate and facilitate locally led solutions - where people are empowered to act on their choices of how best to address the losses and damages they have suffered. The experience of these projects show how cash transfer recipients spend as per their real needs and locally, contributing not only to their own recovery but also to local economies. This approach helps deliver climate justice funding directly to survivors, restoring their dignity and autonomy by providing them with the means to make choices for themselves.

However, effective targeting and distribution mechanisms are essential to ensure that assistance reaches those who need it most, particularly in contexts characterised by poverty, inequality, and governance issues. Moreover, concerns were raised at the community level about the potential misuse or mismanagement of cash transfers, highlighting the importance of accountability and transparency in program implementation.

Furthermore, these experiences also show that this approach is only ever going to be part of the solution, and that there is no silver bullet to achieving climate justice. Finance is desperately needed to replace damaged infrastructure and restore services, for which direct budgetary support to a well designed government Loss and Damage national strategy may be more appropriate. There is a crucial need to complement and layer infrastructure restoration with solutions recognizing the varied and multifaceted needs, realities, and choices of individuals, households, and communities most impacted by climate change.  Cash transfers should be complemented by other forms of support, including access to education, healthcare, and social protection services, to address the underlying drivers of vulnerability and build resilience holistically.

As the Loss and Damage Fund is being designed, direct cash transfer approaches must be considered as a highly effective means of meeting its remit. By taking a programmatic approach and ensuring that cash transfers are complemented by a range of interventions, cash transfers for both households and communities can ensure that our responses to losses and damages are truly led by the lived reality of people on the climate frontlines. Ultimately, cash transfers can be regarded as one of the ways to embed the principle of subsidiarity (that decisions should be taken at the closest level possible) into the Loss & Damage Fund. By further embedding this principle across its modalities (including by ensuring national mechanisms for Loss and Damage can receive direct budgetary support and promoting democratic systems of governments via funding processes), the Loss and Damage Fund can effectively fulfil its mandate of offering additional support to households, communities, states and countries reeling from the escalating climate crisis, and help promote sustainable development in a rapidly changing world.

This blog is based on a learning session at the Fourth Gobeshona Global Conference in March 2024 organised by SCIAF with inputs from Caritas Malawi, Caritas Zambia, Give Directly and Trocaire Malawi

Ben Wilson is the Director of Public Engagement for the Scottish Catholic International Aid Fund (SCIAF)

Yvonne Namala-Murindiwa is Program Director for Give Directly in Malawi

Richard Kusseni is Monitoring and Evaluation Officer for the Catholic Development Commission (CADECOM) in Malawi

Philip Nyasulu is Climate Justice and Disaster Risk Management Officer for Trocaire Malawi