Before the 1990s, many people disapproved of giving unregulated cash to the poor. People feared that handing out checks would lead to corruption, waste and an increase in drug and alcohol abuse among the impoverished.

However, the increasingly popular cash grant programs that have appeared in countries such as Brazil and Mexico are disproving these stigmas. Those in extreme poverty receive invaluable benefits from cash grants of as little as 12 dollars per month. When desperately needy individuals get small monthly cash transfers, research shows that better health, education and smarter overall life decisions will follow.

Michelle Adato has studied the impact of cash transfers for many years. She reveals, “Cash grants are now being seen as a part of a comprehensive development strategy as opposed to just a safety net.” What was previously thought of as a short-term solution is proving to have longer, more sustainable results.

When individuals and families receive grants, such as South African child support grants and those from The Transfer Project led by UNICEF, they can buy things they really need such as food, clothes and an education for their children. Extended grants to adolescents have proven to decrease risky sexual behavior, thereby reducing the chances of teen pregnancy and HIV, by 63 percent.

John Hoddinott, a deputy director at the Washington-based International Food Policy Research Unit, argues that cash grants not only give the poor a means to buy necessary survival items, but they “give beneficiaries a base from which to make longer term investments.”

“The research shows that in the vast majority of cases, poor people use their money well — the evidence is unambiguous.”

The Transfer Project, which runs programs across Sub-Saharan Africa, operates on the premise that income poverty has highly damaging impacts on human development, and that cash empowers people living in poverty to make their own decisions on how to improve their lives.

Those receiving grants from The Transfer Project in Zambia, Ghana and Malawi “all reported being happier with their lives, and research showed that recipients in these countries were eating better too.”

The child support grant in South Africa has expanded to include 17-year-olds, and now reaches 11 million children. The U.N. reports that a total of 20 African countries have social protection programs like these and both the number of countries and size of the programs are growing, with Kenya, Zambia, Lesotho, Mauritania, Mali, Niger and Zimbabwe all expanding their programs.

In many ways, the initial skepticism of cash grant programs have only served to increase scrutiny and research, in turn strengthening them. Handing out cash rather than food and supplies empowers the impoverished to make their own choices and invest the stipends wisely. The widespread success of programs like The Transfer Project and the South African child support grants is a testament to the power of a small amount of money on lifting the poorest of the poor out of dire living conditions and into a brighter future.

– Grace Flaherty

Sources: CPC, IRIN News
Photo: Poke