January 05, 2022

What ‘cash plus’ programs teach us about fighting extreme poverty

Years of implementing, studying, and iterating on cash transfer programs have revealed some important lessons about achieving long-term impact.

A group of women review learning materials

By Imran Matin


This piece was originally published in Stanford Social Innovation Review. It has been reposted below.

The development community has been heavily researching and discussing cash transfers over the past decade, publishing hundreds of studies and scores of articles on their impacts and potential to alleviate poverty.

At BRAC, the world’s largest NGO in the Global South working to combat inequality worldwide, we have seen the value of cash transfers firsthand. We have also seen how augmenting cash with a holistic set of interventions—a “cash plus” approach—can enhance their long-term impacts. “Cash plus” interventions can empower people who face the greatest marginalization to build long-term, resilient livelihoods and create a pathway out of extreme poverty. But what can other programs and policies learn from these interventions to generate sustained impact?

In 2020, worldwide cash transfer benefits nearly doubled, with 214 countries and territories planning or implementing over 400 cash transfer programs in response to the pandemic. These interventions are fast and cost-effective, and research shows they can increase people’s consumption, assets, and food security.

Cash transfers can play a critical role in helping people meet their basic needs, particularly during a crisis like the COVID-19 pandemic. During the first wave of the pandemic in Bangladesh, BRAC transferred to each of 100,000 food-insecure families the equivalent of $18 USD. This is enough to feed a family of four for about two weeks, but families who are marginalized and living in extreme poverty need further support to build their resilience to shocks like COVID-19 and climate change, which disproportionately affect them. The challenge is combining the short-term effectiveness of cash transfers to meet the immediate needs of people in extreme poverty while also enabling them to build sustainable sources of income.

“Cash plus” interventions aim to achieve this combination, building on the benefits of cash transfers by immediately addressing the multidimensional nature of extreme poverty and empowering participants to establish livelihoods, save income, integrate into their communities, and avoid falling back into cycles of poverty.

What Is ‘Cash Plus’?
BRAC’s Graduation approach is one such “cash plus” intervention, developed in 2002 upon our realization that existing microfinance and anti-poverty programs were not meeting the unique needs of people in the deepest states of poverty. Over time, as we have continued to refine our approach, we have realized there are four key elements, regardless of geography and community context, that are fundamental to implementing Graduation. First, Graduation meets the basic needs of households participating in the program. This typically takes the form of a cash transfer and basic food supplies which serve as a safety net that participants can build on while establishing long-term livelihoods. The approach also ensures participants and their families have access to essential services such as education, health services, water, and sanitation.

Next, the approach enables participants to earn a sustainable income during the program. This involves providing them with a productive asset such as a goat, a small plot of land for growing food, the resources and training they need to start a micro business, or vocational training to find a formal job. It also provides training on how to manage income and expenditures, encourages them to save, and connects them with financial services. Lastly, Graduation empowers participants to increase their confidence, integrate into their community, and develop a range of life skills, from improving household nutrition to dealing with gender-based violence and tackling child marriage. These skills are often delivered through coaching, mentorship, or peer-to-peer learning.

This approach works. Recent research by the London School of Economics established that poverty traps, or thresholds of assets below which people struggle to increase their incomes, are indeed real, and identified the “big push” that “cash plus” interventions provide as an effective way to enable people to escape extreme poverty. In Bangladesh, BRAC’s Ultra-Poor Graduation program has reached more than 2.1 million households with 95 percent of participants graduating from the program and embarking on an upward trajectory out of extreme poverty. Additional research by LSE demonstrates that the Graduation approach also contributes to long-lasting impact—93 percent of graduated participants in Bangladesh have seen a continued increase in income, savings, consumption, and self-esteem years after the program ends. Similarly, a 10-year study of Graduation participants in West Bengal found durable improvements in consumption, food security, income, and health outcomes.

In addition to the successes of BRAC’s Graduation approach, other “cash plus” interventions have delivered measurable impacts on participants’ lives. In Ghana, the government found cash transfer recipients were using their cash to pay for high health insurance premiums. They adjusted, taking a “cash plus” approach, and linked their national health insurance program to their cash transfer program. This linkage enabled low-income households to reduce their out-of-pocket health expenditures and benefit more from the cash grants. The program impact evaluation found that participants strengthened their social networks and increased their days of productive work, their children’s school enrollment, and their household savings.

These impacts show the potential of “cash plus” programs to provide a sustainable pathway out of extreme poverty, build resilient livelihoods, and link cash transfers to other complementary interventions. After two decades of evaluating BRAC’s Graduation approach, we have identified the following lessons on achieving long-term, sustainable results in poverty alleviation.

Combining cash and resilient livelihoods prevents people from falling back into extreme poverty when the next shock hits.
For people to escape the poverty trap and stay out, they must not only receive a “big push” in the form of a capital transfer but also be equipped with the skills, resources, and tools to avoid losing their livelihoods or going into debt when crisis strikes. This is why building a resilience lens into program design is essential. By combining temporary support for basic needs like cash transfers with training on coping with crises, saving money, and setting up multiple income streams, “cash plus” programs enable people in extreme poverty to withstand major shocks like natural disasters, disease, or economic downturns.

In the midst of the COVID-19 pandemic, BRAC Ultra-Poor Graduation Initiative (UPGI) partnered with the Government of the Philippines and the Asian Development Bank on a pilot Graduation program. Connecting participants to government cash transfers enabled them to maintain consumption during strict lockdowns. Meanwhile, the “cash plus” aspects of the program—including livelihoods and financial skills training—enabled them to build resilience, with 75 percent of participants able to use money they had saved during lockdowns, and 76 percent of participants continuing to earn incomes.

The impacts of “cash plus” approaches continue long after program implementation. In Bangladesh, even 11 years after the end of a program, participants were more likely to continue working more productive jobs with greater job security in 2020 despite the pandemic’s impacts. This underscores the increase in sustainability of program impacts we see when combining short-term cash support and long-term resilience building.

A holistic approach advances progress on multiple development challenges.
Cash transfers address monetary poverty, and by bundling them with interventions that support women’s empowerment, consumption support, health care, livelihoods, and more, we can tackle the interconnected circumstances that keep people trapped in cycles of extreme poverty.

Research on BRAC’s Graduation program in South Sudan compared participants of an unconditional cash transfer (UCT) program to both Graduation participants and a control group. The Graduation program supported women participants to develop livelihoods and provided business training to help operate them, along with life skills training and food to ensure their households ate meals regularly. Relative to the control group, UCT recipients had significantly more food and cash saved and owned more land. Graduation participants similarly had greater land ownership, food savings, and cash savings than the control group, but they also increased their total income, consumption, and assets relative to the UCT group due to the added interventions. By empowering women, supporting household nutrition, and establishing sustainable livelihoods, the “cash plus” approach of the Graduation program delivered a broader array of benefits for participants.

Additional research on Graduation programs in Uganda reinforces these results. Program participants who only received cash transfers increased their assets based on one estimate. By adding in training, mentorship, and savings components, the “cash plus” version of the program led to improvements in income and consumption but also nutrition and subjective well-being in comparison to cash alone.

In Ghana, Innovations for Poverty Action and The Abdul Latif Jameel Poverty Action Lab compared the transfer of assets alone (goats) to the full suite of Graduation components. The “cash plus” intervention provided agricultural livelihoods and training to earn an income from them, health and nutrition information, enrollment in national health insurance, savings accounts, and weekly coaching by program staff in addition to cash transfers. After three years, the value of Graduation participants’ assets, consumption, and income was higher than those who received only goats, and Graduation participants had increasingly diversified their livelihoods with support from their coaches.

All three cases reaffirm the impact of cash transfers on poverty alleviation through improving, in some cases, savings, assets, and consumption. By adding in components that address extreme poverty multidimensionally, “cash plus” programs can take those benefits and combine them with the tools and resources participants need to build long-term, resilient livelihoods and essential life skills to stay out of the poverty trap.

Iteration and adaptation supports sustained program impacts.
To ensure continued effectiveness, “cash plus” programs must constantly adapt their components to changing local circumstances. In 2016, BRAC conducted a redesign of its Ultra-Poor Graduation program in Bangladesh and, among other findings, determined based on local market assessments that its current asset transfers of livestock worth approximately $100 USD were not generating a “big push” large enough to get program participants over the poverty threshold. Based on internal and external evaluations, BRAC determined that by providing larger productive asset transfers (such as livestock or agricultural inputs), households would be better able to compete in local markets and generate larger returns on investment.

BRAC doubled the value of productive asset transfers, based on data suggesting the adaptation would generate sufficient financial returns to compensate for added costs. The program also expanded the number of livelihood options available to participants, taking advantage of new opportunities within local markets and avoiding increased competition between households. As a result, the program was able to avoid the diminished sustainability of impact over time that would have occurred if livelihood packages were not adjusted to evolving market conditions.

BRAC’s model for iterating on its programs shows how integrating robust research at every stage of program design and implementation can have a tremendous impact. Through piloting interventions and constantly reexamining their assumptions in changing contexts and adapting them based on the evidence, development actors implementing “cash plus” programming can maintain effectiveness at scale.

Evidence-based systems change is crucial for progress.
By combining cash transfers with a broader, more holistic set of interventions, we can set the most marginalized people on an upward trajectory out of extreme poverty toward self-sufficiency. Internal and external research can strengthen that impact and ensure it applies across diverse contexts. Investing in programs and policies that address development challenges as multidimensional and prioritize building resilience also ensures program impacts can withstand shocks.

Based on the robust body of evidence on “cash plus” programs’ durable impacts, this approach has expanded rapidly. Over 200 programs, most of which are government-led, now reach nearly 92 million people across 75 countries. BRAC is scaling its Graduation approach through governments, aiming to reach an additional 4.6 million households globally by 2026. BRAC had to learn through constant evaluation and adaptation how to ensure “cash plus” programs address the complex needs of people in extreme poverty and enable them to build long-term resilience. An evidence-driven holistic approach is what makes effective anti-poverty programs at scale possible. If NGOs and their research partners follow a similar model of rigorously evaluating and iterating on social innovations, they can generate the evidence needed not only to prove and improve program impact but also to persuade policymakers to scale effective approaches to poverty reduction.


Dr. Imran Matin is the Executive Director of BRAC Institute of Governance and Development at BRAC University.