By Lisa Bingham
Economics is all about connecting our needs or wants with resources. Most of us associate that exchange as happening with the exchange of dollars for goods, but there are alternatives. I attended a fascinating session at the BALLE conference last week called “Bartering and Complimentary Currencies.” This was a new concept for me, but I discovered that it is an idea that we are all more familiar than we might suspect. Think of movie tickets, stocks, and stamps, which are all alternate forms of currency that we use on a regular basis to obtain goods and services that we want or need.
Annette Riggs, founder and Managing Director of Community Connect Trade Association (CCTA), spoke about b-to-b trade credits. CCTA facilitates the exchange of goods and services between businesses, from which companies can earn trade credits, and provides a central marketplace through their website. There are some caveats to the program, however. Not all businesses are a good fit, as they need to provide some good or service that is needed by other participating programs, and there are some tax issues that participants should be aware of. Still, these b-to-b exchanges allow participating businesses to reserve their capital for other expenses, which is especially helpful for small businesses that may be suffering from a paucity of cash.
BerkShares is a program supported by the E.E. Schumacher Society that has had success in the Berkshire region of Massachusetts. People can go to a participating bank and purchase BerkShare currencies at a discount and then use them to make purchases at local businesses enrolled in the program. Businesses can use BerkShares to make change (keeping them in circulation) or sell them back to the banks. The currency comes in several denominations and features designs by local artists. Chris Lindstrom, who presented the program, estimated that, on average, there is a net value of $140,000 – $150,000 of BerkShares in current circulation. The printing costs of the currency are quite high, however, and the program is still working on finding on-going sources of funding.
Denver’s BALLE network, the Mile High Business Alliance (MHBA), plans to capitalize on their Local Flavor Guides to kick off their own currency program. The Flavor Guides were developed to highlight the individual character of Denver’s local neighborhoods and promote local businesses. The MHBA plans to utilize a recirculating gift certificate (Flavors) that businesses can spend themselves or give or sell them to customers and employees. The idea is that the Flavors will help build customer loyalty and will continue to circulate within the community rather than having businesses redeem them, as in the BerkShare model.
Another reward program that was presented during the talk was Sonoma, CA’s GoLocal Rewards. The basis of this program is pretty simple – participants (individuals, businesses, or a non-profits) spend money at local businesses and earn credits when they swipe their card, which can then be redeemed at participating businesses. Members pay an annual fee to gain membership, but the program has considered the needs of community members who may not be able to pay the fee, and have instituted alternative fee structures. For example, rather than paying up-front, the first credits earned could go toward the membership fee. The GoLocal Rewards program has another added benefit – each transaction is recorded electronically, regardless of the method of payment. This results in a valuable source of information for local businesses, as they can find out where their customers live, how much they spend, and where else they shop.
The final presentation was on Threebles, which proposes a triple bottom line economy. Threebles takes the concept of a credit rating and applies the principles of a triple bottom line. The program uses external feedback loops to measure social and environmental impacts and then creates financial consequences. For example, if a company earns a poor environmental rating, it would have to pay a higher rate of interest to obtain a loan. The project is still quite new and has some issues to work out, such as how to obtain customer ratings, but I think the premise is fascinating. This system would serve to encourage desirable business practices and behaviors and have real consequences for negative acts.
This session also stands out in my mind because the panelists didn’t just present success stories – they were honest about the many hurdles these projects have overcome, and the additional challenges still facing them. They also provided some good resources for people interested in learning more about complimentary currencies. In addition to all the groups listed above, the panel made the following recommendations:
The End of Money and the Future of Civilization (2009) by Thomas Greco
Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free (2008) by Ellen Hodgson Brown
Also look for books by Bernard Lietaer and Thomas Greco
Lisa Bingham recently graduated from the University of Colorado with an MBA and an MS Environmental Studies, focusing on sustainable real estate and environmental sociology. She is pursuing a career in sustainable community development. You can contact her at firstname.lastname@example.org.