4.3 Grant Amount Frequency
As a general principle, the grant calculation should be based on:
- Project objective
- Available resources at household level
- Cost of goods and services to be covered by the grant
- Cost of transaction and of transport to access goods/services
- Price variation and seasonality
- Targeted population’s preferences for frequency
- Coordination and coherence with other operations and CARE’s financial capacity
Adjusting grant amount by household size may be considered.
Resources and political feasibility determine the size, frequency, and duration of the scheme. Grants can be used to support existing social protection schemes, and amounts can be calculated collaboratively within cash working groups.
Various tools can be used to determine transfer amounts, and they use similar logic:
- Quantify the needs: either through a Minimum Expenditure Basket (MEB), the use of Sphere indicators, the survival line, the poverty line, or the Cost of Diet methodology.
- When quantifying the needs, it is important to factor in the cost of the item itself but also the cost for the beneficiaries to access this item (transportation fees, storage fees, etc.)
- Factor in the household capacity to cover the identified needs either through their own resources or with external aid.
- Define the grant amount: the need minus the household capacity.
Employment opportunities created by the project must not entice people away from regular livelihood activities and must not distort the labour market. To ensure these do not happen:
- Set wages 10-20% below market rates, varying between skilled and unskilled workers
- Do not vary rate based on gender
Pros and cons of wage options:
- Payment per unit is based on a clearly measurable output. This can include metrics including number of acres cleared, houses built, volume of debris removed, or kilometres of road rehabilitated.
- Provides a clear pay unit
- Wages are output-based, may require substantial oversight to ensure that each worker receives the correct compensation
- Lump sum payment provides a fixed payment for a pre-determined timeframe. Based on an estimate of the amount of time required to complete a job. A bill of quantities is used to estimate labor/material requirements and the related costs for achieving an intended output.
- Avoids the possibility that workers will deliberately prolong the work
- Output-based and may require substantial oversight to ensure that work is completed on schedule
- Daily wage payment provides flexibility and is often used when activity duration is uncertain.
- Downside: can stretch out for longer than initially planned, do not necessarily lead to intended achievements
Implementing teams should consider urgency of need, protection risks for beneficiaries when receiving large payment, capacity of payment agent(s), and project objectives. When beneficiaries need cash immediately, payments may be transmitted weekly or even daily at first, then transitioned to a less frequent basis (weekly, every other week, or monthly). When the project aims to support a community with livelihood assets replacement, payment can be made once an appropriate amount is determined.
The decision regarding grant amount and payment frequency is the responsibility of the CARE Project Manager and the Team Leader.