Cash first: should charities just give people money?

The debate in brief

The charity sector spends billions each year designing, staffing and delivering programmes to help people in poverty. A growing body of evidence suggests that in many cases, simply giving people cash would be cheaper and more effective. Across more than 200 independent studies worldwide, unconditional cash transfers consistently improve recipients' income, health, housing and wellbeing -- often all at once.

This challenges a deep assumption in the sector: that charities know what people need better than people themselves. If the root cause of someone's hardship is a lack of money, why build an elaborate infrastructure around them rather than addressing the shortage directly? Advocates of cash-first approaches argue that the charitable service model is often paternalistic, expensive and less effective than simply trusting people. Critics counter that cash alone cannot fix broken housing markets, overstretched mental health services or the structural causes of poverty -- and that relationships, expertise and advocacy matter as much as money.

Quick takeaways

The arguments

The case for giving people cash

The evidence base is unusually strong. A review by World Bank economist David Evans and Anna Popova, published in Economic Development and Cultural Change in 2017, examined 19 studies across 10 countries and found that cash transfers had either no impact or a negative impact on spending on alcohol and tobacco -- the opposite of what critics assume. GiveDirectly, which has delivered over $1 billion in unconditional cash to more than two million people in poverty, points to independent research showing that every $1 transferred generates around $2 to $2.50 in local economic activity. A 2023 randomised controlled trial published in PNAS found that a one-off payment of CAD$7,500 to people experiencing homelessness in Vancouver reduced the number of days they spent homeless and generated net societal savings of $777 per recipient through reduced shelter use.

GiveDirectly co-founder Michael Faye has framed cash as "the benchmark" for the sector: if your programme cannot demonstrate better outcomes than giving the same money directly to the people you are trying to help, it is hard to justify the overhead.

In the UK, the Independent Food Aid Network (IFAN) has led the push for cash-first responses to food insecurity, arguing that food parcels deny people dignity and choice. North Paddington Food Bank, often cited as the UK's only fully cash-first food bank, stopped distributing parcels and began giving people money instead, reporting positive outcomes and reduced repeat demand.

The case for services, not just cash

Not every problem is solved by a bank transfer. For people with severe mental health conditions, addiction or multiple overlapping disadvantages, cash without support can be ineffective or even harmful. The Centre for Homelessness Impact's Personal Grants project -- the UK's first randomised trial of cash transfers for people experiencing homelessness -- is reported to have applied eligibility criteria that excluded some participants with complex needs, acknowledging that cash alone is not always appropriate.

Service-delivery charities provide things that money cannot buy on the open market: specialist advice, therapeutic relationships, advocacy, legal representation, community connection. A person in a housing crisis needs more than rent money if there are no affordable homes available. A child on an NHS mental health waiting list cannot purchase faster access to CAMHS. Cash treats the symptom of insufficient income but does not address the systemic failures that create poverty in the first place.

There is also a structural argument. If charities pivot to cash distribution, they risk becoming an arm of the welfare state rather than an independent force that challenges it. The sector's value lies partly in its ability to advocate, innovate and hold government to account -- functions that disappear if charities become primarily a conduit for payments.

The middle ground: cash first, not cash only

The most productive framing may be "cash first" rather than "cash only." This is the position adopted by IFAN, the Child Poverty Action Group, and increasingly by government itself. It means defaulting to cash where the underlying problem is income poverty, while maintaining specialist services for situations where cash alone is insufficient. It treats people as capable adults who generally know what they need, while acknowledging that some circumstances require more.

The evidence

The global evidence base is substantial. GiveDirectly cites over 200 independent studies, and a 2024 NBER meta-analysis of 114 studies found consistent positive effects on consumption, assets and income. Long-term research from Uganda found that participants who received $380 in 2008 had 20% higher income when surveyed twelve years later -- a result driven entirely by men in the sample (Fiala et al., 2025).

UK-specific evidence is thinner but growing. The Welsh Government's Basic Income for Care Leavers pilot, which ran from 2022 to 2025, provided 644 young people leaving care with GBP 1,600 per month for two years. A 97% take-up rate and early evaluation findings reported improved wellbeing, autonomy and financial stability, with a full evaluation due in 2027. The Centre for Homelessness Impact's Personal Grants trial is providing the UK's first RCT evidence on cash transfers for people experiencing homelessness, with results expected in early 2027.

On food insecurity specifically, the Family Resources Survey 2024-25 found that 9% of UK households experienced low or very low food security. Among Universal Credit recipients, only 55% had high food security -- the lowest of any benefit group. The Trussell network distributed 2.9 million emergency food parcels in 2024-25 -- equivalent to one every 11 seconds. Scotland's Cash-First programme, backed by GBP 1.8 million from the Scottish Government, has been operating since 2023, with an interim evaluation in July 2025 showing early signs of positive impact on food insecurity where cash-first approaches were adopted.

One gap in the evidence: there is limited UK research comparing the cost-effectiveness of cash transfers against specific service interventions for the same population. Most of the strongest cost-effectiveness data comes from low- and middle-income countries, and the extent to which it transfers to a high-income welfare state context remains genuinely contested.

Current context

The most significant recent development is the UK Government's Crisis and Resilience Fund, launched on 1 April 2026 with GBP 842 million per year for local authorities in England. The fund's guidance explicitly mandates a "cash-first approach" to crisis payments -- the first time the UK Government has formally adopted cash-first as a default for crisis support. This represents a major policy shift, moving away from the supermarket vouchers and food bank referrals that previously dominated local welfare assistance.

The Trussell network's 2024-25 data showed that while food parcel numbers fell slightly from the record 3.1 million in 2023-24, they remained at 2.9 million -- a 51% increase compared with five years earlier. Emma Revie, Trussell's chief executive, described the figures as a "massive wake-up call to Government."

Meanwhile, the Centre for Homelessness Impact expanded its Personal Grants trial to London and Belfast in 2025, providing unconditional GBP 2,000 grants to people experiencing homelessness. Early reports found no adverse outcomes, with participants spending money on furniture, clothing, courses and savings. In Wales, the Basic Income for Care Leavers pilot entered its final evaluation period, with the third annual report (February 2026) showing continued positive findings on wellbeing and autonomy.

Last updated: April 2026

What this means for charities

The cash-first debate is not abstract. The Crisis and Resilience Fund means that local authorities across England are now expected to default to cash payments for crisis support. Charities working in food insecurity, homelessness and poverty relief need to consider whether their operating models are aligned with this direction of travel -- or whether they are maintaining service-delivery infrastructure that may be less effective than giving people money.

This does not mean every charity should become a cash distribution point. Organisations providing specialist expertise -- therapeutic support, legal representation, disability advocacy -- offer value that cash cannot replicate. The question is whether programmes that could be replaced by a cash transfer should be, and whether charities are honest with themselves about which category their work falls into.

For funders, the implication is direct: if cash is more effective for a given population, continuing to fund service delivery over direct transfers requires justification. The uncomfortable question raised by GiveDirectly's "benchmark" framing remains: can your programme do more good per pound than simply handing that pound to the person you are trying to help?

Common questions

What is cash-first?

Cash-first is an approach to poverty relief that defaults to giving people money rather than goods or services when the underlying problem is insufficient income. It does not mean cash only: specialist support remains appropriate where cash alone cannot address someone's needs. In practice, it means asking whether a food parcel, voucher or service could be replaced by a direct payment -- and defaulting to cash where the answer is yes. The Independent Food Aid Network (IFAN) has led the push for cash-first responses to food insecurity in the UK, and the Scottish Government adopted cash-first as official policy in 2023.

Do cash transfers actually work?

Yes, consistently. More than 200 independent studies worldwide show that unconditional cash transfers improve recipients' income, health, housing and wellbeing -- often simultaneously. A 2024 NBER meta-analysis of 114 studies found positive effects on consumption, assets and income. Long-term research from Uganda found that participants who received $380 in 2008 had 20% higher income twelve years later. In the UK, the Welsh Government's Basic Income for Care Leavers pilot provided GBP 1,600 per month to 644 young people leaving care and reported improved wellbeing, autonomy and financial stability. The evidence base is strongest for low- and middle-income countries; the extent to which it transfers directly to a high-income welfare state context remains genuinely debated.

Do people spend cash transfers on alcohol or tobacco?

No. This is one of the most thoroughly debunked objections to cash transfers. A review by World Bank economist David Evans and Anna Popova, published in Economic Development and Cultural Change in 2017, examined 19 studies across 10 countries and found that cash transfers had either no impact or a negative impact on spending on alcohol and tobacco. The assumption that people in poverty cannot be trusted with cash is not supported by the evidence.

Are there cash-first programmes in the UK?

Yes, and the number is growing. North Paddington Food Bank became the UK's most cited example of a fully cash-first food bank, stopping parcel distribution and giving people money instead. Scotland's cash-first programme, backed by GBP 1.8 million from the Scottish Government, has operated since 2023. The Centre for Homelessness Impact's Personal Grants trial -- the UK's first randomised controlled trial of unconditional cash for people experiencing homelessness -- expanded to London and Belfast in 2025. Most significantly, the UK Government's Crisis and Resilience Fund, launched on 1 April 2026, formally mandates a cash-first approach to crisis payments for all local authorities in England.

Why do some charities resist cash-first?

Several reasons are cited. Some argue that cash cannot address structural problems -- no amount of money creates affordable housing where none exists, or shortens NHS waiting lists. Others point to the small subset of people with severe mental health conditions or addiction where cash without support may be ineffective or harmful. There is also a structural concern: if charities become primarily cash distribution points, they risk losing the independence that allows them to advocate, innovate and challenge government. Critics suggest, however, that these objections sometimes reflect institutional self-interest as much as genuine concern for recipients -- and that charities should be honest with themselves about which of their services would be outperformed by a direct transfer.

Key sources and further reading

• Cash-First: Towards Ending the Need for Food Banks in Scotland -- Scottish Government, 2023. The first UK government plan explicitly adopting a cash-first approach to food insecurity.
• Crisis and Resilience Fund: Guidance for Local Authorities in England -- Department for Work and Pensions, 2026. The guidance mandating cash-first as the default for crisis payments across English local authorities.
• Cash Transfers and Temptation Goods: A Review of Global Evidence -- World Bank economist David Evans and Anna Popova, Economic Development and Cultural Change, 2017. The definitive meta-analysis debunking the myth that cash recipients waste money on alcohol and tobacco.
• Unconditional Cash Transfers Reduce Homelessness -- Dwyer et al., PNAS, 2023. The Vancouver RCT demonstrating that unconditional cash payments reduce homelessness and generate net societal savings.
• Research on Cash Transfers -- GiveDirectly. A summary of over 200 independent studies on the effectiveness of unconditional cash transfers globally.
• The Personal Grants Project -- Centre for Homelessness Impact. The UK's first RCT of unconditional cash transfers for people experiencing homelessness. Results expected early 2027.
• Basic Income for Care Leavers in Wales Pilot Evaluation: Annual Report 2025-2026 -- Welsh Government / CASCADE, Cardiff University, 2026. The latest findings from the UK's most significant cash transfer pilot.
• Why Cash First? -- Independent Food Aid Network (IFAN). IFAN's case for a cash-first approach to food insecurity, with evidence from UK food aid providers.
• Family Resources Survey: Financial Year 2024 to 2025 -- Department for Work and Pensions, 2025. The official UK household food security data.
• Building Cash-First Momentum While Breaking the Food Bank Paradox -- Child Poverty Action Group, Poverty journal, 2024. Analysis of how cash-first approaches can be embedded at local level.