Although this project is in its very early stages, it does serve to illustrate that linking an unused resource with an unmet need and introducing a new currency can bring about profound changes.
There are several key takeaways from all these examples. Besides cooperative money’s capacity to engender greater collaboration and mutual support while providing cash-strapped governmental agencies with a way to leverage their tight resources, there is an even more powerful motivator at work. Traditionally, efforts to bring about a change in behavior have focused on increasing taxation (for example, increasing taxes on tobacco products to discourage smoking) and regulation, which tries to outlaw certain behaviors (such as Prohibition tried to do to alcohol consumption during the 1920s in the United States). The incentive stimulated by cooperative currencies, however, uses a carrot rather than the proverbial stick.
And perhaps more important, it demonstrates that it is possible to create economic stimulus without the negative effect of increasing debt.
Chapter Nine
STRATEGIES FOR NGOS
Money does not have to be legal tender.
It can be what one might call “common tender,”
i.e. commonly accepted in payment of
debt without coercion through legal means.
RICHARD TIMBERLAKE, former Professor Emeritus of
Economics at the University of Georgia1
Within the space of less than 10 years, the small rural village of Blaengarw, South Wales, with high unemployment and a bleak future, totally transformed itself. David Pugh, a local TimeBanking manager who oversees the currency explains, “On the Welsh index of material deprivation, we were 128th on the scale of 1,800 communities with one being the worst in the country. We’ve now progressed to 735th in just a decade. So we’ve climbed more than 600 places. These statistics are based on such things as antisocial behavior, crime, and of course, unemployment—in fact, there is a whole array of indices. We’ve really come a very long way.”2
The residents of Blaengarw worked their way out of the all-too-common story of social blight and decay by making an assessment of their unused resources and their unmet needs and, in this case, linking these with a time-banking currency coordinated by a regional and local NGO.
This former mining village of some 1,895 souls was trapped in a postindustrial depression, exacerbated perhaps by its remoteness in the Garw River valley. Although just physically 30 miles from Cardiff, the capital, it might as well be 3,000 miles away, as there is only one road in and out of town and a sporadic public bus service. David Pugh recalls, “The last pit closed in our village in December 1985. We were employing 7,000 men in the four pits in its heyday. Eighty percent of the local population was involved in mining in some fashion. So it was a disaster when all the mines closed down. Deprivation started setting in, as there was no formal employment replacing the mine. People made do with being on the dole [public assistance] or whatever casual work they could find. There wasn’t much, though. Furthermore, many people couldn’t work because they were disabled through coal dust inhalation and mining accidents. Many were physically incapable of doing any other work. We had to rebuild our village from there—from little or nothing.”3
Becky Booth is program coordinator and cofounder of Spice, which is part of the Wales Institute for Community Currencies. Spice fosters 40 time currencies in Wales and 12 in England. Booth says, “My research has been around postdisaster recovery and looking at the way the agencies that came into disaster situations work through the local community. My prime interest was around empowerment, participation, social management, and really looking at the role of NGOs in that context. I discovered that TimeBanking, along with other designs, is a very simple tool to enable the people to be genuinely involved in a totally different way with NGOs and public services.” 4
Activities are centered around the town’s 100-year-old Miners’ Welfare Hall. The local activities are run by a community nonprofit organization, Creation Development Trust, which employs two workers to oversee the TimeBanking. For each hour of service given to the community, a credit of one hour is exchanged. In the first year, 150 people took part; there are now over 1,000 members and 30 groups; 15 new social enterprises have been established, and new learning opportunities have been created. Participants contribute 60,000 hours of service per year to their community. The hall has an average attendance of 600 visits per week. Entry to events is paid in time money or in conventional money: A two-hour bingo night or movie costs two time credits, and a three-hour cultural performance is valued at three time credits.5
The sculpture is a project completed by Blaengarw time credit members. Photo credit: Spice network.
People learn to cook healthy meals in the community food studio and serve it in the café, which prides itself on offering food grown locally in community and individual gardens.
Besides the economic benefits that are cultivated through local currencies, people interact in new ways, creating stronger ties between themselves and their community, transforming crime rates, antisocial behavior, and the general down-and-out demeanor of the place.
CIVICS AND NONPROFITS
Through the lens of cooperative currencies, it becomes evident that there is a new and empowered role for NGOs and nonprofits. These entities traditionally are strapped for resources and often find themselves in vigorous competition with each other for a very limited pot of money and support. Consequently, large swaths of time are spent trying to raise capital, while everybody would really prefer to focus on the organization’s core mission. Salaries are usually not competitive in comparison with the commercial sector, which can make hiring and keeping the right people problematic.
Interestingly, in a society with a dual currency system in place, nonprofits not only can play a key role, but also gain access to many more financial resources.
The example of the Civic and its emergent role in government was explored in the last chapter. Such systems provide opportunities for NGOs by playing the same role in the cooperative economy that corporations play in the conventional economy: initiating projects, organizing activities, and coordinating and motivating people. Envision also a specially created new type of nonprofit that would be in charge of auditing all the other nonprofits, ensuring transparency and trust in the system. It would take on the role that auditing firms play in the competitive economy, and its reports would be published on the city’s Web site. The benefits to nonprofits would be multiple: a powerful new way to reach their objectives, a big increase in their volunteer base, and the opportunity to pay their staff partially in civics.
This generic model can be customized to fit the specific objectives and needs of any given NGO or nonprofit organization.
FREE CLINICS AND ITHACA HOURS
Health care is a critical issue in the United States. Approximately one in four adults do not have health care insurance coverage. Paul Glover, creator of the community currency Ithaca HOURS, offers innovative solutions to a wide variety of issues, including most recently health care. It all started back in 1991, with a local paper currency experiment in his hometown of Ithaca, best known for its Ivy League school Cornell University, in upstate New York. Initially, the primary focus of this cooperative currency system was to address underemployment among the townspeople by connecting them to one another in a skills directory.
Ithaca HOURS is a paper currency that comes in six denominations. Each Ithaca HOUR is worth one hour of basic labor. Thousands of individuals and over 500 businesses have earned and spent HOURS. They have made millions of dollars worth of trades with HOURS, representing hundreds of job equivalents at $20,000 each. Businesses accepting the local currency include the Ithaca Health Alliance, Cayuga Medical Center, Alternatives Federal Credit Union, the public library, many local farmers, movie theaters, restaurants, healers, plumbers, carpenters, electricians, and landlords.
Paul Glover comments, “Ithaca HOURS is local tender rather than legal tender, backed by real people, rea
l labor, skills, time, and tools. Acceptance of the currency is voluntary, and it is interest-free. These are two prime differences between national and local money. Approximately 11 percent of HOURS are issued as grants to community organizations. Over 100 nonprofits have received grants in HOURS. Five percent of HOURS may be issued to the system itself, primarily paying for printing HOURS. Loans of HOURS are made to local businesses, with no interest charged. These loans have ranged from $50 to $30,000 in value.”6
A half hour denomination of the Ithaca HOURS. Notice the logo “In Ithaca We Trust.”
At the height of Ithaca HOURS’ popularity, some 80 communities around the United States conducted their affairs partly with local currency. Those that thrived did so by hiring a full-time networker to facilitate circulation.
Against this backdrop and many years of experience, Glover’s latest initiative is the Patch Adams Free Clinic in Philadelphia. The American physician Hunter Doherty “Patch” Adams is involved in the project, which uses humor and play to heal people. His life story was the basis of the popular 1998 movie Patch Adams, starring Robin Williams. Since the 1990s, Adams has endorsed the Ithaca Health Alliance (IHA), founded by Glover as the Ithaca Health Fund (IHF). The Philadelphia clinic is the first clinic beyond Adams’s Gesundheit Institute in rural West Virginia to bear his name. The clinic will locate in a low-income neighborhood that has 250,000 uninsured residents. Unemployment and crime rates are high. Remarkably, this clinic will be member-owned and operated.
Glover explains, “The clinic will provide community-based health care that is genuinely nonprofit, preventive, humane, and, in the spirit of Patch Adams, fun. It is a refuge for doctors and nurses who want time to heal patients. It is a refuge for patients who want to be treated with dignity. For a small annual fee, members will own this clinic, gaining diagnosis and referral, dentistry, chronic and urgent care, counseling, pediatrics, birthing, hospice care, massage, family planning, chiropractic, acupuncture, and other therapies. “More than a health facility, the clinic is an economic development model that solves several urban problems. Existing medical facilities are overcrowded and underfunded. Suffering is untended, both mental and physical. Infectious disease rates are high.”7
Glover sees this clinic as a cornerstone of a healthy community and an economic engine to drive the area back to financial viability.
The clinic will be created using the earthship model of constructing passive solar buildings from used materials, in this case, discarded tires filled with earth. Community gardens around the buildings will grow food for the clinic.
“Expenses are kept low by relying least on U.S. dollars. To the maximum possible, we rely on the gift economy, barter, and credit systems such as Time Dollars and HOURS (‘MediCash’). Staff members are primarily volunteers: professionals, students, religious congregants, neighbors, and members. Membership may be paid with labor to maintain the facility and its grounds. Both volunteers and staff may be rewarded with Philadelphia MediCash, (HOURS) gift certificates, health care, sweat equity credits, college course credit, and scholarships. Barter agreements will also meet personal needs,” he adds.8
FIVE BILLION DO NOT HAVE ACCESS TO THE INTERNET
Inspired by the Curitiban example, a young American entrepreneur from Los Angeles, Kosta Grammatis, has conceived of a new currency that links community service in developing countries with donated time on the Internet.
“Our nonprofit, A Human Right,9 is building a bandwidth bank where unused satellite, cellular, and fixed-wired Internet access that is donated by telecommunications companies will be put to work for social and humanitarian causes. Access to the Internet is a luxury in many countries. Currently, 5 billion people do not have access to the Internet. Although we aim to give everyone the opportunity to get online, there are many ways to go about doing this in a way that honors the access and ensures its sustainability,” says Grammatis.10
He explains that by getting involved in community projects such as garbage collection and a variety of renovation projects, people can earn a local currency that, in turn, is good for Internet access. As a Time magazine feature noted: “One of the surest signs that you’re in a developing country is the trash beneath your feet, which has less to do with bad habits than the fact that arranging garbage pickup and disposal is a low and expensive priority for a poor government.”
Kosta Grammatis with the Echostar 16 communications satellite at Loral headquarters in Palo Alto, California. Photo credit: A Human Right.
Grammatis adds, “Users and their contribution to their community will be tracked. Solid metrics will gauge the direct impact of community service (one ton of trash gathered for 2,000 hours of Internet) and also the social impact of Internet access (2,000 hours of Internet were used to address the long laundry list of tasks needed to be undertaken in their neighborhood).”11
FUREAI KIPPU
At his retirement in 1991, Tsutomu Hotta, a highly respected former judge in Japan’s Supreme Court and minister of justice, decided to focus his energies on the growing issue of elderly care in Japan. Japan has the fastest-aging population in the world. For this purpose, he created the Sawayaka Fukushi (Sawayaka Welfare) Center, which later became Sawayaka Fukushi Institute. Hotta’s idea was to entice 12 million volunteers with the fureai kippu (“caring relationship tickets”), which were officially launched at that point.
The catalyzing event was a powerful earthquake that hit the Kobe area in January 1995. The capacity of the Japanese government to intervene and assist during an event of this scale was clearly overstretched. Consequently, a grassroots volunteer movement sprang up to provide help with the wide range of needs that arose during this crisis. Hotta started two significant initiatives. First, he became one of the key lobbyists for introducing the first legislation for nonprofit organizations in Japan. This lobbying was successful, and new legislation was enacted in 1998.
He also was instrumental in launching a major symposium that took place in September 1995 in Osaka for the promotion of volunteer organizations, focusing on time-based cooperative currencies. The fureai kippu currency and movement came out of this meeting.
Rui Izumi, an associate professor at the Senshu University School of Economics in Tokyo, points to government support as a major contributor to the growth in cooperative currencies: “The central government and many local governments are supporting local currencies in positive ways. For example, they have given financial support to some organizations, and [both] the Minister of Economy, Trade and Industry and the president of the Bank of Japan have made several encouraging remarks publicly about these systems.”12
A former minister for economy and industrial policies described government support for complementary currencies in surprising terms: “The use of cooperative currencies can bring an end to the long-lasting deflation of the Japanese economy by supplying additional monies of various types at the local level.”13
Government-sponsored projects were implemented in various communities of very different scales, ranging from small villages to entire prefectures (roughly equivalent to a U.S. county) and involving millions of people. All of them were designed to link unused resources with unmet needs within neighborhoods, districts, and networks. These trials were initially run for a period of three years or so, and the results were carefully observed. The purpose for this massive investment in complementary currency experiments, estimated to be well over $10 million per year, was and still is to fully understand what works best and under what circumstances.
The fureai kippu system provides elderly or handicapped people with any service not covered by the official national health care program. Its units are accounted for in hours of service. Different kinds of services have different valuations—for example, bathing an elderly person is given a higher hourly rate than shopping for an elderly person. In what amounts to a health care time-savings account, caregivers who provide for the elderly in the fureai kippu system accumulate credits and may draw on such credits in a
variety of ways. They may use these credits themselves if they are ill, or they may elect to electronically transfer part or all of their fureai kippu credits to parents or relatives who require care and may live in another part of the country. Electronic clearinghouses perform these credit transfers. Such options ensure that ever more people are cared for.
The elderly themselves prefer the services offered by these caregivers to those paid in conventional yen currency because the relationship is different—it is more personal on both sides. Caregivers themselves often perceive the elder recipients as surrogates for their own parents.
An estimated 387 fureai kippu systems are now operational throughout Japan.14 The economic savings are substantial. As in the case of Curitiba, there is no need to raise taxes or divert funds from other programs. The human support network it creates makes it possible for the elderly to stay in their own homes longer or return home sooner after a medical intervention. The human interaction involved, along with the greater sense of community that is engendered, benefits all.
The city of Sankt Gallen, Switzerland, is the first municipality to implement a Japanese-style fureai kippu outside of Japan. During the feasibility study for this project, it turned out that only one significant change needed to be made to the Japanese model. Citizens insisted that the city would have to guarantee that services would be provided in a different configuration if the project failed in its current iteration. The city provided that guarantee and the system is now becoming operational.
EMERGENCY RELIEF CURRENCY
Hurricane Katrina, which destroyed the U.S. Gulf Coast, China’s Sichuan Province 7.8 earthquake, the devastating effects of the flooding of the Mississippi River hinterland, and the nuclear meltdown of the reactor in Japan have provided enough opportunities to learn how to better address the plight of displaced people and their communities in extreme circumstances. This usually involves a constellation of NGOs and other government agencies.
Rethinking Money Page 17