How to Start a Community Currency

[Dan Clore]

News & Views for Anarchists & Activists:
http://groups.yahoo.com/group/smygo

[The original includes many links.--DC]

http://www.countercurrents.org/luna231012.htm
How To Start A Community Currency
By Mira Luna
23 October, 2012
Shareable.net

“Banking institutions are more dangerous to our liberties than standing
armies...The issuing power should be taken from the banks and restored
to the people, to whom it properly belongs." - Thomas Jefferson

“Let me issue and control a nation’s money and I care not who writes the
laws.” - Banker Mayer Amschel Rothschild

The centralized creation of money and credit has a profoundly negative
effect on local economies, sovereignty, and cohesiveness. Bankers value
profit at all costs, while locally-controlled institutions tend to hold
other values - like community, justice and sustainability - more highly.

Communities can regain control of the flow of money and credit by
issuing their own currency as a complement to conventional money, as
electronic barter networks, debit cards, mobile phone payments,
Timebanks, LETS, or old-fashioned cash.

By altering the flow of resources, community currencies take power away
from multinationals and put it in the hands of more accountable local
entities. While community currencies can't be too similar to or compete
with national money, most countries allow it and some, like Venezuela
and the E.U., support their development. Mediating underemployment and
poverty are often prime motivators, or specific purposes like
small-business incubation, caregiving for seniors, community gardens, or
providing healthcare for the uninsured, according to CNN.

The Brixton Pound

Starting a community currency is not for the faint of heart. It takes a
dedicated team years of effort. Learning from others' experiences is
essential. Here are some tips I gleaned from the experts and through my
own experience.

Find a group of people with common ground that are easy to get along
with. It's important to share goals and values with your core group,
otherwise your project will be pulled in many directions. You may split
into separate projects at some point; that's often better than trying to
duke it out with people who want to do their own thing. Focus on quality
volunteer recruitment. Don't get discouraged when people come and go.

Define your goals and prioritize them. Do you want to support local
business or low income folks? Do you want encourage ridesharing or
reward senior care? You may have many goals - currencies can have an
effect on many problems - but be clear about your priorities and target
audience as this will shape all of your decisions, including what kind
of currency you use.

“A currency is never an end in itself, but has to be seen as a
facilitator of flows within the system of a whole community and
economy," said John Rogers, who teaches how to start currencies at Value
for People in the U.K. "Its essential systemic role is to match
underused assets and unmet needs.”

The community meetings I held attracted all kinds of personal agendas
and wingnut plans that had no practical application. Your goals will be
your compass.

Pick your tool appropriately and make it easy to use. Currencies are not
one-size-fits-all. It is crucial that you pick the right tool, with the
option to expand into multiple tools later. It should be as easy to use
as the other kind of money. REAL Dollars of Lawrence, KS ended because
businesses didn't have an easy way to spend them. Vermont Businesses for
Social Responsiblity switched to open source software for their business
to business exchange to customize their interface and make it as simple
to use - a very smart investment. The books at the end of this article
can help you decide what type of currency might work best.

Bernal Bucks sticker for stores that use its currency

Know your community. If your tool is online, but your community is
mostly offline, it won't get used. Bernal Bucks of San Francisco chose a
swipe debit card with loyalty points. A more rural area like Corvallis,
Oregon is more of an off-line community, so a paper currency isn't too
slow for this small town.

How does your community use money, what are its assets and what does it
need? Design a plan based on the reality of your community, not just on
your own ideals. Whether you are working with businesses, nonprofits or
community members, survey them or conduct focus groups to test the new
currency before you finish your design.

Do your homework and get a mentor. Choose a group that's done a project
similar to yours. Look up case studies that have worked (there are many
mirages of success). Community Currency Magazine is a good resource for
case studies and interviews and the Complementary Currency Database can
help you search for mentors in your area. Many people sail out on a
currency expedition without a map. Learn from others mistakes. Your
membership and partners will trust you more if you've done your homework.

Define your governance and organization structure. Like any project you
need good governance. John Rogers harps on this point: “Some people tell
me off for going on about the importance of governance in getting
community currencies to fly. They say a well-designed CC ‘should run
itself’. That’s a nice theory, but I don’t know any CC that has stood
the test of time without some form of governance at work, i.e. someone
making decisions.”

People will expect responsible and transparent governance for a resource
as valuable as a currency - that trust determines its value. Encourage
diverse community participation and representation in your governance,
especially from your members. If you want to operate as a volunteer or
worker cooperative, see my article on worker coops. Bay Area Community
Exchange is a hybrid of a member and a worker coop, though many
currencies are either run as traditional nonprofits or business
bartering exchanges.

Your decision to be a business or nonprofit will be determined by your
goals, and currency type. Only entities that have charitable or
educational aims can be nonprofits. That's not to say your business
can't operate like a nonprofit, but you won't be eligible for grants and
donations, though you may be able to get small investments, like Sonoma
Go Local did from its community and business members.

Sonoma Go Local - "It Pays to Buy Local"

Define your geographic area. It may be helpful to incubate your currency
in a smaller community, like Bernal Bucks did in a small neighborhood of
San Francisco. However, a wider geographic area may provide the
diversity of services and goods that makes a currency useful. Too wide
an area though, like the Southwest, may be meaningless and not effective
in building trust and solidarity. Ideally, it would be an area diverse
enough to provide most of the necessities of life, and small enough to
allow direct exchange, community-building and accountability. Regional
currencies, like the Cheimgauer in Germany and Berkshares in
Massachusetts have done well partly for this reason. If you don't grow
food in your community, you may want to expand your reach to farming
areas. If you haven't lived in your area for long, ask for advice from
long time locals who may have sense of the resources and their flows.

Outreach through events. Hosting events to promote your currency and
attending other groups' events raises consciousness, develops alliances,
recruits members/users and volunteers, and builds community. Think about
your target user audience and meet them where they are at. Swapmeets and
skillshares are useful demos of the currency that give a more concrete
feel. Offer to speak, host a booth, or organize trading at relevant
conferences, festivals, markets and other events to promote your
currency to potential members that are allied in values.

Bay Area Community Exchange organized a large sustainable living
festival with over 40 workshops and 300 attendees using member skills
and hours. The event increased trading and registrations by a factor of
10 or more for the month before the event and a couple weeks after. A
similar boost happened around its Timebank Holiday Fair. Corvallis
Hours, a bastion of homesteading, hosts an annual Harvest Festival where
members have a market for “selling” their homemade goods for Hours.

Develop partnerships and take them seriously. Find allied organizations
to help recruit members/users, develop programmatic partnerships and
raise your status in the community. An ally may serve also as a fiscal
sponsor to bear the burden of organizational tasks while you focus on
organizing. Choosing partnerships should depend both on your goals (e.g.
pick an environmental organization to support gardening or a social
justice organization to reach low income groups) and their ability to
provide support, such as event space, outreach, trainings or
programmatic development. A good way to begin a partnership is to do a
presentation to their staff and then ask them if there is one small
thing they'd like to achieve by using the currency, like a website
upgrade, and help them do that. Partnerships work best as a two-way street.

An Ithaca Hour

Ithaca Hours gained credibility and usefulness by partnering with local
public transit for bus passes. Berkshares partnered with local banks for
savings accounts and currency distribution. Hour Exchange Portland and
other successful timebanks have worked with local healthcare
organizations to accept credits from low-income members – a highly
valued service that increases the value of the currency.

Keep the circulation flowing. Bernard Leitaer, who is often considered
the godfather of community currencies and helped design the Euro, says
“...this is where a lot of community currencies have failed. They have
neglected to close complete circulation patterns, and as a result...it
tends to pool in particular parts of the system.” To keep the energy
flowing, identify unmet needs and underutilized resources in your
community, especially those not served by the conventional system. Be a
match-maker. If seniors need companionship and your pet shelter needs
socialization for its animals, or you have unemployed people without job
skills and a nonprofit or business startup that needs volunteers, you
may have a match.

One of the biggest mistakes is assuming the currency will do everything
itself. One or more exchange coordinators are vital, particularly in the
beginning. Visiting Nurse Service of New York’s Timebank has a bilingual
or trilingual coordinator for each targeted community. Regular
communication through email, newsletter and your website reminds members
what's offered and needed, and the importance of mutual aid. Otherwise,
members forget and default to using money. Many currencies publish
quarterly newsletters with directories of offerings.

Toronto Dollars being sold for use at the local market - photo by Jeff
Buster

Working on circulation means creating ways to both earn and spend
currency. Equal Dollars of Philadelphia developed a food market,
clothing store and bike shop. They partnered with local nonprofits so
members could earn hours by volunteering, paid their staff partly in
Equal Dollars, and made micro-loans in Equal Dollars. MORE Timebank in
St. Louis created a community college, where people could spend hours by
taking classes, and earn hours by teaching. Another way to increase
circulation is to target entities with high demand goods like beer
(Detroit Cheers currency) or services, but make sure they don't
over-commit themselves. One popular health food store ended up
frustrated with loads of hours that they couldn't spend and quit. Set up
limits to make it more sustainable, like using vouchers during slow
business hours only or on over-stocked goods.

Use your currency to fund your currency. Hey, the government does it,
why can't we? As long as members agree it's a good use of resources,
don't be shy about using your currency to pay staff, reward volunteers,
put on events, or do marketing. Ithaca Hours uses its currency as a
reward for attending organizing meetings and swapmeets. Bay Area
Community Exchange supports its volunteers by giving hours for outreach
events, trainings and tech projects related to its key functions. This
is controversial amongst community currency theorists, because the other
side of the coin is corruption and inflation. The Red de Trueque, a
currency used by a third of Argentina's residents during its economic
crisis, collapsed because of fraud and mismanagement due to a lack of
transparency and accountability.

Currencies are notoriously hard to fund. Relying on external donations,
as did Berkshares, can make the short-term sustainability of your
project slightly more likely, but the long-term more precarious. Using
your currency to fund your project is also good practice in learning how
to use it. Membership or transaction fees are also a good practice.
However, it's helpful to lower the barrier to entry as much as possible
in the first year or two so you have more members offering diverse
skills and goods to increase your currency's value (fees may slow that
process). Think about the option to pay member dues with volunteer work
to support your currency project. A sparse directory with few members is
not likely to encourage trading, as the now defunct Berkeley BREAD
discovered. One of its most active members realized the currency she was
earning with her counseling services, would not be useful for anything
she needed and she quit being a provider. Alternatively, if you have
lots of useful stuff in your store, people will flock to it.

Don't give up but be willing to change directions midstream. Currencies
take at least a few years to establish. In the meantime, you'll have
fun, make friends and get some of your needs met. The Ithaca Hour
project was the result of diehard tenacity and a small Americorps
stipend that kept founder Paul Glover going for 3 years in the
incubation stage. Some made it by adapting their strategy as they went
along, like finding out the type of currency or organizing strategy was
not appropriate for the community context or goals and changing
directions. New Earth Exchange in Santa Cruz went through several
incarnations over the last several years to find the right one instead
of being stuck on their first idea. Now they are pioneers integrating an
online business bartering exchange with a paper currency called Sand
Dollars.

Have fun! It's a lot of work. Have fun doing it and you are sure to grow.

Online Resources:

Community Currency - from Good Idea to Sustainable System by John Rogers
Community Currency Guide by Hallsmith and Leitaer
Community Currency Magazine
Complementary Currency Database

Books:

People Money: The Promise of Regional Currencies by Kennedy, Lietaer, &
Rogers
Local Money: How to Make it Happen in Your Community by Peter North
Creating Wealth: Growing Local Economies with Local Currencies by
Hallsmith and Lietaer

Consultants:

John Rogers http://www.valueforpeople.co.uk/
Paul Glover http://www.paulglover.org/currencybook.html
Mira Luna mira (at) sfbace.org

--
Dan Clore

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"From the point of view of the defense of our society,
there only exists one danger -- that workers succeed in
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aspirations _without intermediaries_."
--Censor (Gianfranco Sanguinetti), _The Real Report on
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