Certificate Course in Community Currencies for Grassroots Development

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The following wiki will be used to hold all of the support material for the Course in Community Currencies for Grassroots Development created by Grassroots Economics (GE). Through the course you will be able to learn from the experience of Will Ruddick and the various projects his organization has set up in Kenya.

http://grassrootseconomics.org/certificate-course


Overview

This course will immerse you into the world of Community Currencies as a tool for economic and community development. We will cover why and how Community Currencies have been implemented in marginalized communities as well as their history, set backs and future projections. After completing this course you will be have a strong foundation to design, customize and implement Community Currencies.

Topical Outline:

  • Community Currency Theory: development economics, history of money, financial systems and debt, currency models, goals standards and ethics.
  • Preparation & Development: community participation and ownership, system design, voucher creation, communications, partnerships, and legality.
  • Setup & Launch: cooperative facilitation, collateral asset development, financial sustainability, and marketing.
  • Long Term Care: long-term support, audits, Community Currency renewal.
  • Management: system maintenance, legal reporting, accounting, currency circulation, administration, data collection, and personnel.
  • Fieldwork: on-the-ground survey work and interviews; lessons learned from previous Community Currency models; taking part in community currency events and activities; economic resource mapping.

To register for the course do it directly through the GE page -http://grassrootseconomics.org/certificate-course

Below you will find relevant materials to fully understand the taxonomy of the currencies and support materials to be able to design and implement them.


Theory

What is Money?

Definition: According to the Bank of England, in a modern economy, money is a type of IOU, but one that is special because everyone in the economy trusts that it will be accepted by other people in exchange for goods and services.

Functions:

  • Medium of exchange
  • Store of value
  • Unit of Account

Characteristics:

  • durability
  • portability
  • divisibility
  • uniformity
  • limited supply
  • acceptability
  • value

How are National Currencies Created?

  • Sir Mervyn King, Governor of the Bank of England 2003- 2013 - “When banks extend loans to their customers, they create money by crediting their customers’ accounts.”
  • “Right now bank deposits makes up over 97% of all the money in the economy. Only 3% of money is still in that old-fashioned form of real cash that you can touch.”
  • Martin Wolf, who was a member of the Independent Commission on Banking, put it bluntly, saying in the Financial Times that: “the essence of the contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending”

How we got here

  • In UK - Before 1844 only the government was legally allowed to create metal coins. Over time, the paper receipts had for their stored coins, became accepted as being as good as metal money. People effectively forgot that they were just a substitute for money and saw them as being equivalent to the coins.
  • Coins were originally stored with Gold Smiths who became the first banks, and began to issue more notes than they had in reserve.
  • Eventually the gold standard was completely lost and reserve requirements for banks were based on cash. But today those requirements have effectively vanished.
  • Private Banks currently create 97% of the worlds money supply.
  • By creating money in this way, banks have increased the amount of money in the economy by 11.5% a year over the last 40 years. This has pushed up the prices of houses and priced out an entire generation.

“What is the Salient Economic Unit?” - Jane Jacobs

Why do Nations have sovereign currencies at all?

-With banks in control of the credit supply, sovereign money or national currency today has lots much of it's meaning.= -Why should the Kenyan Government have to borrow at interest the money it needs?

Switzerland is a top performing economy in the world with a population of only 8 million people and has retained its own currency. – And 1 out of 4 businesses are part of Complementary Currency Programs – If 8 million people in the middle of Europe can have the top economy in the world and their own Currency – what would happen if all areas of ~8 million people could have their own currency?

Community Currency Theory

Global Economic Problems in Summary

Usury: Interest Bearing Debt: Money created as debt – On a global scale this ensures more money creation to pay interest. Since the ability to repay this debt nationally and globally is impossible (not enough money in the system), more money must be created (at interest) to pay off the current debt – and so on.

Fiat: Money created with no backing. There is little to no regulation on the private banking system’s creation of credit. This is defined as a bubble creating huge profits for banks and increasing instability (bubble) and inequality.

Inflation: a factor of 3-5x faster than production worldwide.

Local Economic Problems in Summary

Market Instability: Money comes into local communities largely from exportation of labor to external markets and leaves communities through purchases of imports. If these external markets, falter, or have any seasonality this drastically effects the amount of money available for trade in a local community.

Lack of Money: The money supply is not sufficient to trade available goods and services.

Lack of Investment: Given a chronically non-liquid market nearly all available money goes toward basic needs and consumption of imported goods. Money is not saved as much as it could be, and the mechanisms for savings are difficult. Investment comes with interest bearing debt.

Capital Ownership: Cooperative development can help low-income groups pool resources and develop local industries. (Competing for scare resources)

Lack of local industries: Over dependence on imports causes money to leave local system. Exporting the majority of labor is inefficient - labor should be utilized and products created for local consumption and export. Rather than tapping the local labor force and building new businesses, the majority of local businesses only sell retail goods to these workers. 

===Differences in Characteristics of Money===

Characteristics of Money:

  • durability
  • portability
  • divisibility
  • uniformity
  • limited supply
  • acceptability

Characteristics of Community Currency:

  • Backed by local value
  • Non
  • Interest Bearing and Non-Inflationary
  • Supportive of local industries and cooperatives
  • Building local identity and trust
  • Providing market stability Free to use and develop Community issued and regional in usage

Theory of Change

Mutual Credit: (The term implies that creditors and debtors are the same people lending to each other)

The practice of multilateral exchange can be a mere convenience, but once a common unit of account is agreed, the extent to which members can draw credit limited, a mutual credit system quickly resembles a money system.

Keynes proposed a mutual credit system called International Clearing Union instead of a gold standard.

Theory of Change ----> Growing Local Production Through Liquidity Injection ---> Value circulates within

Community Currencies: A brief Overlook

What is it?

Community Currencies are regional means of exchange that supplements the national currency system. A network of businesses, schools, self-employed and informal sector workers form a cooperative whose profits and inventory are issued as vouchers for social and environmental services as well as an interest-free credit to community members. These vouchers circulate in the community and can be used at any shop, school, clinic or cooperative businesses and form a stable medium of exchange when the national currency is lacking. This injection of money into the community in the form of a community currency, based on local assets, increases local sales and helps directly develop the local economy. The Community Currency programs create stable markets based on local development and trust.

As a socio-economic development tool Community Currency offers an innovative way to improve living standards by:

  • Providing community groups access to an interest-free credit, thereby increasing local trade, employment, small business development and overall local economic stability.
  • Providing a mechanism for communities to build local trust and finance social services, such as education, environmental and health services.

Community Currencies are central to the global commons movement. With long-term social and financial impacts for low income communities. They are distinct from the wider field of complementary currencies because they have the collateral of cooperative assets of the communities that use them. 

How it Works?

(1) Local goods and service providers in areas like Kangemi, Kenya, are brought together into a business network and legally registered as a Community Based Organization (Chama) or Cooperative (SACCO). (2) This cooperative develops or acquires a shared businesses, such as a factory, wholesale shop or bus. (3) Inventory and profits from these cooperative businesses form the basis for a voucher that is issued as a Community Currency. Each business member is guaranteed by other members for an initial amount of credit and the community currency is also used for social service work – like tree planting, employing local youth for waste collection and road maintenance. (4) Business owners within the network trade both in Kenya Shillings and Sarafu-Credit. The community currency circulates around the community helping to connect local supply and demand for people who lack regular access to national currency. (5) Community Currency holders may also use any excess to purchase cooperative business inventory.

For example, a mother without sufficient Kenyan Shillings can use her own labor to pay for her child's education, by getting a credit based on her goods and services in Community Currency. A school receiving the credit can use it to help pay for school fees and increase teacher’s salaries. The teachers can use the Community Currency to pay for cleaning services from the mother or any goods and services in the network and it can keep flowing in a virtuous cycle. This credit acts as a strong buffer to market instability ensuring that hundreds of businesses have a means of exchange even during the worst economic times. Members also enjoy other benefits besides increased customers and stock turnover. They are also invited to many events that the networks facilitate, such as training, community market days, and networking events, as well as participation in savings and loan programs.

Another example - A typical business network surpass 200 accepting businesses within it's first year and includes several to a dozen schools as the centers of those networks. Teachers and headmasters have been guaranteed by other members in the network and registered as part of the trading network. Parents can pay for part of their student's various school fees with Community Currency which helps increase the salaries of underpaid teachers. Teachers then use the Community Currency in the community for goods and services of other participating businesses. Community Currency circulates in the community and eventually ends up back in the hand of parents who can use it for schools fees again. This way parents can pay for part of their children's education with their own goods and services, especially when they are lacking in Kenyan Shillings. School fees represent one of the largest uses of money for people in the community, so their acceptance of Community Currency is a strong boost for the local economy by allowing education to continue even when times are bad. Often parents aren't able to pay fees and their children get chased away from school or end up with a lot of debt. Community Currencies allows parents to pay with a small amount of credit backed with their goods or services to make up for what they are lacking in Kenyan Shillings. The teachers are getting more than they were before, and chasing away less kids.

Preparation and Development

A currency is something that can bring a community together and also something that can break it apart. A currency can be a beautiful circulatory system enabling trade and human connection, it can also act like a jail, promoting greed and scarcity. The standards under which a community currency is developed and maintained are the difference between these two realities. We urge groups interested in implementing a currency program to consider professional consultation at all stages of project development. The steps below are only a rough framework to give one an idea of what is involved and are based on implementations in Kenya since 2010.

Phase 1.

  • Identify Stakeholders.
    • Trainers: CC Course alumni and GE staff
    • Implementers: Lead facilitating organization iii)Partners, Cooperatives and other community groups iv)Focus group trainings
  • Assess capacity of stakeholder assets, businesses and network
    • Perform baseline analysis of community & Legal due-dilligence
    • Assess current levels of cooperation and trust in the proposed network iii)Assess backing businesses – whose goods or services form the CC collateral iv)Identify value addition to those businesses or new businesses
    • Identifying partners: Government Business – large scale employers, NGOs vi)Health Education Environmental
    • Develop long term plan with stakeholders
  • Backing Business(es) Development
    • Value addition / business creation.
    • Training new and existing group businesses on accounting and CC usage

Phase 2.

  • Capacity building Backing Business and Implementers
    • Ensuring the business is profitable and able to provide collateral in goods and services for all CC issued.
  • CC Public Launch
  • As these CC are spent at the backing businesses the accumulated CC are used for: Backing Businesses, Operating costs, Community Services and as additional Member credit.
  • CC Maintenance
    • Branding and marketing
    • Capacity building around leadership and skills
    • Training of various community groups and individual members
  • Member Credit
    • Members registered and trained from the business community. Receive a credit in CC that can be used among each other and also at the Backing businesses. *This is similar to a zero interest loan.
    • Member credit can be increased over time based on participation in activities and CC usage and should be linked to owning shares in cooperative businesses.
  • Community Markets
    • Bringing together people to trade using CC at existing and new weekly and monthly markets
  • Community Service Work
    • Together with local partners using CC to help mobilize and fund educational, environmental and health care providing services.
  • Operating Expenses of Backing Businesses
    • Backing businesses should have a clear policy on usage of CC to reduce their operating expenses through paying salaries, bonuses, rent, maintenance, stocking and so on.
  • Partnerships
    • We recommend government and existing health, environmental and social services and NGOs to convert their funds into CC, and support all activities.
The Sarafu Model

Asset Development Phase

  • Investment/Donation
    • From community, donors and/or investors
    • Investment in the form of bank transfer or (Sarafu-Coin) – initial coin offering (ICO) block chain enabled smart contract.
  • Key Asset Development and Construction:
    • Training on business efficiency and equity
    • Value addition, equipment, stocking, renovation, etc.
  • Operating Costs and Sales
    • Sales of products or services to non-local markets
    • Sales of products or services to local markets
    • Operating Costs in non-local markets
    • Operating Costs in local markets
  • Debt Repayment
    • Return on investment will be accelerated in the next phase.
    • For a donation debt repayment = Social Return on Investment (SROI) generally via community and environmental services.

Community Currency

  • Audit of capacity
    • The key asset value, debt, productive capacity as well as Community and environmental well being are assessed and valued in Sarafu-Credit.
    • This amount of Sarafu-Credit is issued to local businesses, schools and clinics as an interest free consumption credit.
    • This credit can be used as change, to pay school fees and can be accepted and used by anyone. It is backed by the cooperative in general (at everyone’s shops who received a credit), and finally always accepted for goods and services at the Key Asset.
  • Local Market creation and circulation
    • This credit fills a gap in liquidity and helps connect supply and demand. This creates a more stable local market, and increased networking, food security and trust
  • Local Sales of Cooperative products to community
    • The resulting profits are used for local operating costs as well as community services
  • Community Services
    • The community services are organized by the cooperative or partners and involve the whole community.
    • Education: School fees

Local Asset Ownership and Regional Markets

  • A limited amount of Sarafu-Credit and national currency can be converted to Sarafu-Coin and used to purchase externally owned shares at fixed rate.
    • This allows locals to be able to buy back shares from foreign investors and assists in debt repayment.
  • Sarafu-Coin (Shares of local assets) can also be traded in external markets via crypto currency exchanges.

To get an idea of whats possible take a look of the benefits we've perceived through our programs:

Benefits ECONOMIC AND SOCIAL IMPACTS OF THE COMMUNITY CURRENCY PROGRAMS:

Based on 505 businesses surveyed across 5 networks an average of 36.6% of sales are being accepted in Community Currency (survey done during 2nd trimester 2017):

Social Impacts:

  • Community Services: 57% of members (684) report Community Currency being used for environmental programs (such as trash collection and community gardens)
  • Willing to continue: 93% of members (1114) want the program to continue and increase the amount of Sarafu-Credit in the Community.
  • Education: 23% of members report using Sarafu-Credit for school fees (276 Students with increased education)
  • Trust: 77% of members say that trust in the community has increased.
  • Gifting: When asked “How much over the last month did you give (in money professional services and time) to support people or groups without expecting compensation?”
    • Non-using Groups averaged 191 KSH (equivalent) monthly
    • Monthly Community Currency Users averaged 855 KSH (equivalent) monthly
    • 347.48% Higher amounts of gifting for those using Community Currency

Economic Impacts:

  • Food Security: 6% of daily food purchases are being made by members using Community Currency
  • Job Creation: 17% of members report hiring new employees because of the program (206 jobs created).
  • Customers: 57% of members report increases to customers and 65% report increases to sales because of the program.
  • Member retention: overall we have issued a zero-interest credit to 1700 members totaling roughly 7200 EUR and retained 1140 members (95%).
  • Community Currency usage over time (average daily amount of CC Usage). We find the longer people are in the program the more Community Currency they are using.

BUILDING RESILIENT ECONOMIES THROUGH COOPERATIVE BUSINESSES

Effective community currency networks develop income generating cooperative businesses that reduce the need for importing goods and services into the community. These businesses are incubated and flourish within a community market and in-turn help build greater market stability against volatile external shocks. Example cooperative import replacing businesses could include:

  • Supermarkets – Help created hubs for stocking local products,
  • Flour milling – Process local maize and other grains for consumption,
  • Oil pressing – Cold pressing coconut and other seeds to produce a local source of body and cooking oil,
  • Community farms and food gardens – Produce food locally using permaculture techniques,
  • Local transport – Help buy bicycles, hand-carts and motorized transport for local residents,
  • Local clinics - Offer needed services to people in the community,
  • Nursery and after-school services - Offer children a safe place to grow and learn,
  • Cooperative resource management - Such as grazing lands, water reserves and fuel wood forests can be managed and maintained using community currency.

ENABLING EDUCATION

Community Currency helps ensure children are getting an education by allowing parents to use their goods and services to pay for school fees when national currency is scarce. Community Currency is used to pay for tuition and other school costs and in turn goes to teachers’ salaries then out into the community for goods and services and then back to the schools again in a virtuous cycle. COMMUNITIES RECEIVE MORE SPONSORSHIP

Studies show that when trying to support people that need it most at a part of sponsors and government funds can go missing due to rampant corruption and embezzlement (1). Converting those funds instead to community currency, ensures that the community of beneficiaries will be the only people who can spend those funds. Besides the Community Currency being offered as a zero-interest credit to local businesses, sponsor funds can be issued to students, elders and clinics, where they can be then spent in a network of hundreds of shops and schools. This increases local trade and helps support the local community. (1) See for example a Tanzanian experimental study: Di Falco, Salvatore; Magdalou, Brice; Masclet, David; Villeval, Marie Claire; Willinger, Marc. 2016. Can Transparency of Information Reduce Embezzlement? Experimental Evidence from Tanzania. IZA Discussion Papers, No. 9925

Standards

The following categories form the basis for standards under which a community currency is developed and maintained. For each category below a clear implementation and maintenance plan should be established. The topics and questions below are based on community currency implementations by GE since 2010 in Kenya and not meant to be a full or general treatment on the topic.

Risk Management - Identifying and mitigating potential risks

  • Disaster mitigation, What are different types of disasters and worst case scenarios related to the currency system. Loss of trust, corrupt leadership, buy-outs by collectors, hoarding, outside interferance, etc.
  • Currency Security Features - What happens if our currency is counterfeited, or digitally hacked?
  • Transaction and Information Security - How secure is private information about community members?

Community Involvement - Without adequate community involvement, few programs are sustainable.

  • Implementation - At what stage is the greater community involved
  • Diversity - Are all parts of the community represented?
  • Co-creation and cooperation - Are community members an integral part of the creation and maintenance of the program?
  • Net Positive Community Impacts - Can the impacts of the program be felt by the greater community?
  • Behavior Change Communication - How are the community members mobilized and educated?

Legal Framework

  • Taxation - If registered and taxable business transactions are part of the program, how are they being accounted for using the Community Currency?
  • Country specific laws - Are vouchers or promissory notes transferable in your country? What regulations must you follow to uphold existing laws?

Governance

  • Administration - Is there adequate local administrative skills, and do these administrators have the backing of the community?
  • Collaborative decision making - How involved is the community in the decision making process?

Sustainability

  • Locally Appropriate Solutions - Is an alternative means of exchange going to solve local problems? Is the program being implemented to solve problems or
  • Are Flexibility, Adaptability, Practicality and Innovation thriving in your system?
  • Maximum or minimum - Debt levels - How do you determine how much of the currency should be created and issued?
  • Backed by national currency or resources - Is it a voucher with a value backed by the national currency? How does it derive it's value? Does it's value change over time? Does it expire? How is it renewed?
  • Exchange Rates - Is the community currency exchangeable with other currencies? On what basis?
  • Fungibility - Does the currency allow any grouping of goods and services to be traded easily?

Economic Viability

  • Independence - How much local vs non-local goods and services are part of the network? How dependent is the community on inports and exports. How dependent is the community currency on official money?
  • Market Diversity - Is there a critical mass in number and type of goods and services being offered for fluid transactions to take place?
  • Resilience - How resilient is the currency to changes in the market and other risks?
  • Cost Recovery - What are all the setup and maintenance costs and how will they be paid for? How much of these costs can be paid int he community currency vs the National Currency?
  • Net Positive Economic Impacts - Can you quantify and verify both the positive and negative impacts of the program?
  • Marketing - How well to people identify and trust the community currency? What modes of marketing are you using?
  • Interoperability between systems - If a neighboring community starts a program in your region will the two currencies be exchangeable? Will they have the same value?

Professionalism - As much as these are community initiatives, they are can become key parts of the communities ability to function and need serious professional standards to keep them going.

  • Accounting and Financial standards - Are accounting and financial standards being kept? Will an auditor be able to verify these records?
  • Transparency / Information sharing - How much information does the community and local government have about how the program works and its daily usage?
  • Effectiveness - How effective do people find trading in a community currency?
  • Efficiency - Does this program offer an advantage over existing means of exchange, credit/debt?
  • Exchangability - Is the currency being traded for all sorts of goods and services, rent, schools fees, taxation?
  • External auditing - Who is auditing your books and verifying that all of the currency issued is properly backed? What third party can assess your currency usage and activities and report to local government, registrars and the greater community?
  • Training - Are your administrative team and members adequately trained?
  • Baseline projections - How aware are you of the situation before you start a currency program?
  • Values and Goals - Are the values and goals clear for the community?
  • Management Capacity - Do you have the local capacity to manage such a system?

Technology and Monitoring

  • Software, mobile phone systems - What are the short and long term costs for technological solutions and how are they going to be paid for?
  • Record keeping and statistics - Will you be able to say after several years of the currency being traded, if it has really benefited the community?
  • Impact assessments - Are you getting enough information to assess impacts on a regular basis?

Additional Resources

Municipal and County Finances

Without going into debt or relying on national allotments how can local governments fund local development? Local governments typically loose over 50% of their potential tax revenue through informal business activities. Community Currencies offer a way for local government to work together with the informal and formal sectors. Grassroots Economics pulls together hundreds to thousands of informal businesses in an area under the umbrella of a business network.

This business network monetizes the excess capacity of the community in the form of a rotating voucher or community currency that is backed by local production. This community currency facilitates trade when national currency is scarce and can increase sales revenues by more than 25% in only a few months of implementation. The business network also collects a membership fee in the community currency which acts as a community fund. This fund is dedicated toward community and municipal services and is a key tool for local governments.

The local business network can create large sums of community currency vouchers, which can be used to purchase anything in the community. The municipal government could use these resources to fund local labor for a myriad of purposes. Similar to social impact bonds, community currencies allow a local government to have access to the capital needed for local development. The ability of these programs to vitalize regional economies has put them in the spotlight as a key tool for social and economic development. By creating a circulating credit, backed by local goods and services, municipalities can reduce unemployment, increase the tax base and increase trade. Local goods and service providers in regional districts are brought together into a registered business network. Each business member is guaranteed by other members for an initial amount of credit. These credits are printed as vouchers for goods and services and usable at any member of the network. Businesses are encouraged to accept the credits as a percentage of their sales in shillings. A percentage of these credits are collected by the municipality for social service work – like employing local youth for waste collection and road maintenance. The credits rotate around the community helping to connect excess supply and demand for people who lack access to shillings. In 2010 Grassroots Economics' founders implemented their first complementary currency project in Kenya, which accomplished health and environmental aid objectives in a Kenyan slum, collecting 20 tonnes of trash and planting thousands of trees. The pilot program confirmed that health, environmental and economic issues could be addressed simultaneously and successfully through the introduction of a complementary currency.

Community Currency Flow Maps

A community's ability to share resources and skills is one of their primary life support systems that make them sustainable and adaptable. An example local flow between Sally's fish to Kevin's matches, to Marcy's hair salon, to Jim's repairs and back to Sally's fish – is part of a life supporting - resource distribution system.

This system of interconnected nodes (producers and consumers (prosumers)) forms a security web over the community. When one node has trouble (like the fish season is over) and Sally is no longer trading – there is a hole in the community web. How fast the community, and Sally can recover is a key to adaptability.

Establishing and strengthening a network of local flows – is like creating a network of highways – over which resources are reliably distributed. The highway can have lots of different goods and services virtually traveling over it (represented by community currency) – and goods and services can take many different paths. Businesses in large cities can often think of their customers as a one time client, but the flow of their money for the businesses goods or services is the beginning of a chain of subsequent interconnected purchases. With a community currency that money will continue to flow through the area indefinitely. Hence these paths and trades are different from what one might see as by-chance clients in a city, but much more like a continuous highway and stable resource distribution system.

This map of highways – are like the veins and arteries of the community bringing important nutrients to all parts of the community so it can thrive. So as we make a map of currency flows between community members, we are visualizing the beginning of this stable resource highway. The adaptability, efficiency and sustainably of this highway can have the following example measures: - Interconnectedness - the more ways there are for goods and services to reach each other – the more resilient the community is are to various market problems. - Velocity of money - The faster goods and services can flow the faster they can react to community needs. - Diversity – the more types of goods and services on offer in the community by many types of businesses, enables a more rich fabric to life and again the ability to weather losses. This resource distribution system – is loosely a part of what we call and economy: “An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location”

In today's markets these distribution channels are overly determined by an artificial abundance or scarcity of money, rather than a community's production and needs. Hence local economies suffer from a lack of interconnectedness and a dependence on foreign markets, and are prone to failure and extreeme volatility. Hence the local path from Sally to Kevin to Marcy to Jim and back to Sally is a path we want to see made visible so that it can be stable, encouraged and reinforced.

Community Currency Game

This game is a fun and practical simulation to explain how a community currency works and discuss issues surrounding them. It has been in use since 2010 with some modification. It is used in the first stages of implementation - but can be good to do shortened versions (without the barter section) at regular meetings and outreach events.

  • Time: The game should take roughly 1.5 hours.
  • Participants: It is geared as an introduction to community currencies for local businesses (local producers and consumers = prosumers), but could be used with some modification for other interested groups. The game can work with a minimum of 5 businesses and up to 30 businesses comfortably. If the group is much bigger you may break them into smaller groups or choose a set of people to do the game in-front of everyone.
  • Materials: Each participant will need:
    • A pen or pencil
    • 10 item cards - these can be blank paper (of a different color than the game currency). For non-business groups you can pre-write goods and services on them (see below)
    • Colored paper to represent the community currency. Use several denominations 5, 10, 20 and 50. These represent the equivalent in National Currency. These can be as fancy as you like. The participants should be encouraged to think about the physical design and name of the community currency. Each participant should get an equal amount of community currency and it should be enough to satisfy a day to a week of typical purchases in the community. The denominations as well as the amount of currency per participant depends heavily on the area and demographics of the participants.
    • Flip-chart and chart markers - to keep track of pros and cons and discussion items.
  • A: Introduction ~15 minutes
    • Each participant should say a little about themselves, what they sell and where they are located.
    • Ideally move people in the room to be situated spatially based on where their business is in relationship to eachother (neighbors sitting by neighbors). The development of a community currency involves a lot of local awareness and interaction in neighborhoods and with neighbors.
  • B: Barter Exchange ~30 minutes
    • The premise is that one day there is no more money in the community because of some disaster. So what would happen if we had to trade with our goods and services via barter directly?
    • Goals:
      • To get the participants to realize how much abundance there is in the community and also the importance of money.
      • Also to establishing relative value with their goods and services – i.e. the value is in the goods and services – not 'money'.
    • Each participant is given 10 cards to represent their goods and services. (reduce this to 5 cards if time is limited).
    • On each card the participants are to write the name of the good or service - The quantity / amount of that good or service - and the cost for that quantity or amount. Finally their business name or personal name (If the participant is not a businesses and would still like to take part - you can have a set of pre-written goods and services for them to sell)
    • Each card should represent one commonly sold good or services. If someone sells fish by the fish at 10 dollars only, they can have 10 cards that say '$10 fish'.
    • After finishing writing, the participants are given 15 minutes and asked to trade everything they have for goods or services that they want. They are asked to think about the things they need over a week. (or use a theme -see below-)
    • Afterward everyone needs to sit down (this can be hard sometimes, so it is nice to have a timer)
    • Discussion:
      • Each person takes a turn reading off what they have bought and also their experience.
      • Each person is asked to remember who they traded with.
      • What were the benefits and challenges?
      • The importance of trust here is very important. When do people feel comfortable with barter. What about IOUs or layaway?
    • Wrap up: Everyone is asked to return the goods and services they bought. So they end up with their original cards and are ready for the next part.
  • C: Community Currency ~45 minutes
    • Premise: In the previous exercise we saw some of the challenges we would have without money. What if we wanted to re-create money in this community – and it could only flow between these members?
    • Goal: Simulate a community currency and identify strengths and weaknesses.
    • The group must all agree that they trust each other and are going to form a businesses network (for the purpose of the game) In reality each new member must be guaranteed by at least four other members.
    • Each participant in the room they are 'allocated' X Community Currency (we use 400 in Kenya). These are worth the equivalent denomination in National Currency. It is important to note that this currency is a voucher for the participants goods and services (the amount issued should be equal to the average value of goods and services of the player in part B).
    • Explain that for each of these community currencies / vouchers the businesses uses - they are accepting to redeem them at a later time. (When they use it to buy something, they are also agreeing to sell their goods and services for the vouchers later on.)
    • Each participant is also asked to contribute an amount of vouchers toward a community fund (which will be used later).
    • They are asked again to try and sell all of their goods and services. They are asked to think about the things they need over a week. (or use a theme -see below-)
    • After 5 minutes of trading they are told to stop and vote on a community service that the non-business participants (NBPs) and the regular participants in the room will do. The NBPs are given some of the community fund to do the activity and are then allowed to buy from the shops (they should spend it all). If there are no NBPs the facilitator can act as the group doing the community service work. To avoid a long delay the facilitator can suggest a community activity, or a disaster like a flood that needs community assistance.
    • Trading continues. After 15 minutes they are all told to stop. (Use a timer!)
    • Discussion:
      • Each person takes a turn reading off the goods and services they have bought and also speaking about their experience.
      • If themes or tasks were used (see below) they can be scored by the other participants. (How good was your party? What was missing? etc...)
      • What were the benefits and challenges? Generally most of these items can be touched on time allowing.
  • D: Discussion
    • The implementation team should begin to have an idea of what design choices will make the system work, such as denominations, amounts, guarantors, typical things people sell, amounts and values.
    • The team should have the ability to replicate the exercise as a tool to explain how a community currency works.
    • Business Participants: Have a clear understanding of a community currencies – and also the willingness and security to participate.
    • Often these introductory sessions are a good place to start building a core working group from the business community that will start moving things forward.
    • Options:
      • Themes
        • Each participant can be given a theme or task, that gives them a goal in the game (for both the barter and community currency section).
        • These themes can include, weddings, funerals, a birth, getting kids ready for school, throwing a party, starting a small business. If someone has the wedding card their goal is to barter for or purchase things for a wedding.
        • After the game participants can say if they finished their goal or they still need more items - and where those items could be found. Looking at missing items in the network is important for people to think about building a diverse market.
      • Creating a trading Map
        • Through the trades in the previous exercise the participants should be able to visualize the flows of goods and services.
        • e.g.: Place everyone's name on a printed map of the area and draw arrows between them representing the trades that they recorded.
        • Note the loops and stranded members. Talk about how the interconnections creates resilience, and how to make it more connected.
        • This map can be used again and again at future sessions.
      • A Board/Card Game
        • While it is invaluable for local prosumers to think about what they actually sell and interact with each other in the game - developing a board or card game with pre-printed currencies, trading cards, theme cards, a score list and so on, would make this accessible to non-purely local business groups.
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