paper
This report by the CALP Network examines the potential repercussions of a US funding freeze on cash and voucher assistance (CVA) programs worldwide. It analyzes historical data and projects future scenarios to demonstrate the impact on aid volumes and vulnerable populations. The insights within this analysis equip humanitarian stakeholders to understand potential aid cuts and advocate for CVA, and for recipient communities and stakeholders, the report provides a projection of need given the circumstances in 2025.
Core Arguments & Findings
- Decline in CVA proportion: The report highlights a concerning trend where CVA as a percentage of overall International Humanitarian Assistance (IHA) decreased to an estimated 17.8% in 2024, compared to 23.3% in 2023. This decline occurred even before the full impact of the US funding freeze (p. 3).
- US Government’s pivotal role in CVA: The US government has been a significant contributor to CVA. In 2022, US funding accounted for 42% of all CVA funding (approximately $3.5 billion), while in 2024, it covered up to 62% of large-scale CVA programs in specific regions (p. 4).
- Country-Specific USG dependency on funding: In 2024 many countries rely heavily on USG to meet needs including South Sudan (62%) DRC (58%), Bangladesh (56%), and Nigeria (55%) among others to fulfill CVA responses (p. 5).
Potential Impact of US Funding Cuts
- Significant reduction in CVA Volumes: If all US government funding for CVA is eliminated, global CVA volumes could plummet to 5.5 billion allocated in 2024. A more tempered scenario, if half of the USG funding is cut a 21% drop is possible (p. 6).
- CVA levels reverting to 2017: A drastic reduction in US funding is possible, and the potential reduction can revert funding back to the level of need being served in 2017 (p. 6).
- Impact on spillover benefits: CVA provides multiplier effects; every 2 of overall market benefits. Reduction of CVA would impact the communities ability to recover and prepare for future crises (p. 8).
Key Statistics & Data
- 17.8%: Estimated percentage of CVA as a proportion of IHA in 2024 (compared to 23.3% in 2023) (p. 3).
- 42%: Proportion of CVA funding derived from the US Government in 2022 (p. 4).
- 62%: Coverage of large-scale CVA within a given response covered by the US Government in 2024 (p. 4).
- $3.2 billion: Projected CVA volumes in 2025 if all USG funding for CVA is cut (p. 6).
- 42%: Projected drop in CVA volumes from 2024 if all USG funding for CVA is cut (p. 6).
Methodology
- The report uses various data sources to estimate CVA volumes and US funding percentages. It acknowledges the limitations of available data and provides a more complete explanation in the main report (p. 12).
- It uses a combination of historical data analysis, estimations, and projections based on different funding scenarios (p. 6).
Key Conclusions & Recommendations
- The Risk of Undoing Progress: The report argues that the hard-fought gains achieved in scaling up CVA are at risk of being undone. This can impact collective mission for ensuring recipients maintain choice and dignity in their receiving services (p. 9).
- Call to Action: The report emphasizes the need to strengthen advocacy efforts for CVA and extend such efforts beyond those already converted (p. 10).
- Support Local Actors: Direct funding to local humanitarian entities can improve support for recipient communities and economies (p. 10).
- Prioritize and Reformulate Humanitarian Programming: Stakeholders at all levels must find methods for finding reprioritization. This can involve funding efficiencies, or leveraging other revenue streams.
- Ensure Essential Support: CVA has a vital role in providing critical support and has increased in recent years. A reversal from the recent rise in CVA would have detrimental effects to communities in need of assistance (p. 11).
Stated or Implied Applications
- Advocacy for CVA: The findings underscore the need for stronger advocacy to protect CVA funding levels and advocate beyond individuals and organizations that already agree with its benefits (p. 10).
- Funding diversification: The need to broaden the CVA coalition by reaching out to non-traditional donors such as philanthropic organizations and the private sector, among others. The increase in options for stakeholders providing CVA allows the burden on the US Government to decrease, making funding more readily available to the recipients in need (p. 10).
Key Questions Addressed or Raised
- The report aims to address and provide insights into many aspects revolving aid, mainly including
- What are the potential impacts of the US funding freeze for CVA?
- What actions are required to increase aid?
- How can communities stay ahead of crises?
Key Points
- A complete cut in US funding for CVA could lead to a 42% reduction in CVA volumes, dropping to US$3.2 billion in 2025.
- Even a 50% reduction in US funding could result in a 21% drop in global CVA volumes.
- Reduced CVA volumes could return to 2017 levels, but with three times as many people requiring assistance.
- A reduction in CVA funding negatively impacts its spillover benefits, particularly those that generate indirect market benefits in recipient communities.
- Many large-scale CVA responses in 2024 were highly dependent on US funding, the reduction or elimination of which can create significant aid gaps.
- CVA may have already peaked as a percentage of International Humanitarian Assistance.
- Stakeholders need to reprioritize and reformulate humanitarian programming and strengthen collective advocacy around CVA to ensure essential support to those in need.