A newsletter of simple ideas #32 -- December 2000

The Community Way--Self Interest and Local Currencies

Editor's note: the original article referred to "community way dollars" or "cw$" throughout. I changed it to LETS dollars (L$) with the exception of the Comox Valley and Ethical Travel sections because L$ is what the currency is called here in the King County LETSystem. When the article refers to a specific area's local currency, I use the name and abbreviation of their currency. They all work like a LETS, so for the purposes of this article, cw$=c$=L$

We begin, necessarily, with self interest, because, in the economy, altruism has limits. People can't be expected to be "good" to each other for very long if it's any strain, or effort or cost to themselves, their family, or their business. So arrangements that depend on altruism can be undependable.

In contrast, the sustainability of any community money system--like LETS--comes entirely from the participants earning and spending the currency in their own best interests. It's not a moral issue; nobody has to try to be good, or do good. It's just a practical matter--everyone just has to make sure they are doing well.

Of course, in "normal" money use this doesn't apply--your gain will often be another's loss. "Hey, it's competition, look out for yourself, dog eat dog...." With LETS it's different. You can only earn or spend community money in collaboration, never in coercion. And that's not a rule or agreement, it's a basic fact of life because of how community money works. Trading in LETS is essentially collaborative because nobody needs the money. You can't pressure anyone to do something if they don't want to. It makes sense to use a money that reflects and respects that reality.

It's not a "group" decision either--no committees are required. It's just personal-use community money, mind your own business and it will work out for others.

And it makes the community economy a whole lot simpler and effective. What goes around comes around. As the community benefits from the circulation of LETS, so do we as individuals. We reap what we sow. Imagine what we can do together, in collaboration, for the common good.

Community Way

Community way is really a starter motor, a self-financing program that introduces all sectors of the economy--people, business, community groups, and even governments--to the simplicities of community currencies like LETS. It's a community currency system start-up process designed specifically to raise money for non-profits and projects in the community.

Here's how it works: Businesses donate LETSystem dollars (L$) to community organizations--non-profits and projects of their choice. The organizations spend the L$ at participating businesses, pay L$ to staff and other workers/volunteers, or change their L$ into cash (US$).

Change with whom? With anyone who wants to help the organization by exchanging normal US$ for L$ which they can then spend at participating businesses. (If the description of the cycle seems confusing, you can always take a look at a diagram graphic to see how it works.)

As businesses earn L$, usually on a portion of a sale--usually 10% to 50%, but sometimes even as high as 100%--they spend them with each other, pay staff bonuses and incentives, hire local contractors, and give again to their favorite charities. They get a tax break on the donations and the money comes back to them, often with a new, soon to be loyal, customer.

It works because everyone wins--there are no losers. Business does well by doing good. Community organizations have more money to do the work that needs doing. People like getting twice the value for their dollar--they can both put a US$ into their community and have a L$ to shop locally. As most everybody says, it's a good thing.

The community way program also raises the revenues to meet its own costs. It can be started with very little funds as a micro-enterprise for 3 or 4 people, as a way to make a living.

Community Way in the Comox Valley, BC, Canada

In the first phase, 40 businesses have donated cw$60,000 to 25 community organizations. Some use the cw$ in direct purchasing with participating businesses. The Child Development Centre buys groceries from Leung's and board members use cw$ for meetings at the Union Street Grill. The Youth Music Centre spent cw$ to pay 75% of the accomodation for their summer school faculty at the Arbutus Hotel and 50% of their meals in the restaurant.

Some organizations have paid cw$ staff bonuses and one, the Adult Learning Centre, paid their manager for previously unpaid overtime, and she spent her new money buying organic produce from Elemental Organics and getting haircuts from Doreen.

The Union Street Grill paid Oliver Clarke to paint their building. Chris from the Oriental Medicine and Acupuncture Centre bought a year's pass at the Comox Recreation squash courts. It's just what happens as the money moves around.

E.T.--Ethical Travel

The ethical travel program is community way applied in the tourism sector. Whenever we travel, we should try to contribute something to the communities we visit, rather than just come to look, add load to the environment, and leave.

Travellers to communities where there are community way programs can buy local L$ to spend while they are there. It's much the same as getting chips to use in the casino, or Disney dollars at Disneyland, or Francs in France - except that when the "ethical travellers" buy their L$, their money goes directly to community non profit organizations.

This is good for not only for the community but also for the visitors, who are now more appreciated in the community because they are seen to be helping.

Soon, "e.t." will be able to buy L$ for any part of the world, probably directly from global non-profit organizations who will have L$ donated by businesses in communities all over the world. Then, whether they visit the community, or stay home and buy from there, perhaps online, the spending contributes where it's needed. Ethical travellers do real good.

Local Change on the Edge of the Pacific

The Clayoquot Sound on the west coast of Vancouver Island, BC, Canada, is the site of a UNESCO Biosphere Reserve project. It's a magnificently beautiful place of forests and water, a paradise for hiking, boating, and whale-watching.

The 2,000 permanent residents are host to about 200,000 tourists every year, and they need help to balance the benefits of tourism with the strain on the local environment and community.

Now anyone coming to visit the westcoast of Vancouver Island can help out by buying some coast dollars (c$, the name of their community money) from the local community--from the Friends of Clayoquot Sound, for example. The Friends need money to keep the Clayoquot ancient rainforests intact. Pay with your charge card online, and c$ are credited to a community money account in your name ready for your visit. When you get to the coast, go to the Friends office in Tofino or one of the other exchange agents, and get a "smart card" loaded with c$ from your account, and spend them while you are there. Before you leave, you can cash in any left over c$ or deposit them back in your account for future visits.

The short-term goal of Clayoquot Sound communities is for one traveller in a hundred to buy c$200--that's $1/2 million for the environment, summer housing, music, and theatre programs. They have started a design process for their long-awaited community center.

Designs in Development

Community way systems can be in Shibuya, Tokyo, or anywhere else in Japan; they can be in Seattle, USA. They can be any place, really, with a population of 500,000 or 5 million people. Local governments can be involved, supporting the system that supports small and local businesses and reduces "capital flight"--the draining of money from the local economy by out-of-town businesses. This benefits the government because more commerce in town can mean more tax revenues, lower unemployment, and better community services and projects.

As was said before, it works because everyone wins--there are no losers in a community currency system. For more information on community way or the open money projects of the authors, check out the following sites:

• www.communityway.org
• www.openmoney.org/go/designs.html