Buy-local currency minted

Enterprise correspondent

In a push to make Davis a more self-supporting community, Nicholas Barry and his teammates at Davis Dollars have started minting a cash alternative.

As of April, Davis Dollars had printed 10,000 of the colorful buy-local bills, and now the group aims to bring its community currency project into the next phase of circulation.

ÒOne of the central ideas of Davis Dollars is to get local people to interact and exchange more,Ó said Barry, a 2007 UC Davis graduate and Davis Dollars founder.

ÒThe big benefit of community currency is that it encourages spending locally, so that money can move around many more times before leaving.Ó

BarryÕs brainchild has been on the scene for a while Ñ outreach efforts for Davis Dollars have been in motion since last year.

Now, the Davis Dollars project features a new Craiglist-like website (http://davisdollars.org) where users can find all the goods and services that Davisites have listed as ÒprovidedÓ or ÒwantedÓ for Davis Dollars. Items up for trade include composting lessons, craft supplies and, of course, bike repair.

Website visitors also can search for local businesses that accept the new legal tender. Davis Dollars users can buy a new amplifier at Watermelon Music or get a plant at Redwood Barn Nursery. With DDs in hand, they can pick up some chain lube at Apex Cycles or have a pro help fix a jumpy gear at the Bike Forth Collective.

Theoretically, anyway. As of now, only about 100 Davis Dollars have been sold into circulation and scarcely a handful of transactions have taken place. There are options, though; as of press time, 31 services are listed for sale and five businesses are confirmed supporters.

ÒNot many people have Davis Dollars yet, but this is something that will take time,Ó Barry said. ÒTo make a community currency self-sustaining, we have to reach a critical mass.Ó

One of Davis DollarsÕ first supporters was Watermelon Music, and store owner Jeff Simons endorses the DD mission as a buy-local kind of guy.

ÒWhen we met with Davis Dollars, they said they needed to reach a critical mass of retailers, and we signed on as a supporter,Ó Simons said. ÒItÕs not that we think that weÕre going to make any more money, but we benefit in the grand scheme. If the Davis downtown succeeds as a whole, then itÕs better for everyone in town.Ó

One of the more appealing aspects of community currency, said Simons, is that itÕs proved to be recession-proof. However, some issues remain for retailers. Taxes are problematic, as the IRS still would require reported income, regardless of what currency itÕs in. Additionally, for stores like Watermelon Music, national vendors wouldnÕt accept local bills.

Simons said he looks forward to Ògetting the full scoopÓ as the Davis Dollars movement evolves past its fact-finding phase.

Barry and his cohorts hope to have more Davis businesses sign on to give the paper bills more legitimacy. At a recent meeting in Shields Library, Davis Dollars interns brainstormed ideas for the currencyÕs expansion. Several interns enthusiastically described how Davis Dollars is modeled after Berkshares, a successful community currency in Berkshire, Mass.

When asked about his feelings regarding a barter economy, Barry said that DDÕs overall mission is facilitating intra-community trade. Whether such trade is in DDs, barter or even U.S. dollars, Barry said, is secondary. DDs (or any currency) would work to fill in the gaps in a barter system and resolve imperfect matches; for example, if a carpenter wants payment in fresh chicken eggs, but no one selling eggs needs carpentry work. In the far-off future, Barry said he could even see Davis Dollars evolving into an online time bank, with no paper component at all.

DD advocates have approached the Davis Downtown Business Association and their idea got a warm reception, but the DDBA chose not to officially endorse Davis Dollars. DDBA Director Joy Cohan said this is because the association endorses only proposals that will benefit all, and not just some, of its members.

ÒWeÕre not yet ready to embrace Davis Dollars, although we support any organization committed to furthering the concept of spending locally,Ó Cohan said. ÒWhile it might make a lot of sense for some businesses in our membership, it wouldnÕt make sense for some others.Ó

Smaller, simpler businesses could really benefit from Davis Dollars, Cohan said, but chain stores are unlikely to ever use them. Cohan said the DDBA board of directors also had some concerns about administrative details, such as whether Davis Dollars are counterfeit-proof.

Already in place is the downtown Davis gift card, which, like Davis Dollars, exchanges U.S. dollars for local currency and, unlike Davis Dollars, is accepted at more than 200 downtown businesses. According to Barry, the card isnÕt competition.

ÒThe gift cards are more of what I like to see,Ó he said. ÒThereÕs plenty of room in Davis for people to encourage spending locally.Ó

As of yet, Davis Dollars is a microscopic organization. All Davis Dollars come from Barry and crew, and DDs are sold online at a rate of $9.50 U.S. for 10 DDs. Each DD is worth exactly $1 U.S. at participating businesses. Individual consumers cannot exchange DDs for U.S. currency, but businesses can redeem DDs for old-fashioned U.S. dollars at a rate of 10 DDs for $9 U.S. Businesses seeking to trade in DDs therefore would be taking a 10 percent cut off the top. The discounted rates are designed to encourage the use of local currency, but may end up discouraging low-margin businesses from using DDs at all.

But theyÕre not giving up hope. The people behind Davis Dollars believe Davis is an ideal town for a community currency, not only for its closely-knit and economically strong populace, but also because of the social consciousness that has townies supporting community currency on principle.

ÒPeople who live long-term in college towns do so because they value relationships,Ó said Kristin Stoneking, one of the Davis Empowerment and Community OrganizationÕs four board members. ÒAnd thatÕs one more example of our base values: to create community and help people connect.Ó

Three weeks ago, Davis Dollars activists incorporated as the Davis Empowerment and Community Organization. DECO is a public benefit nonprofit and members are applying for federal tax-exempt status as a 501(c)(4).

Barry hopes that DECO will become the home base of other community commerce projects. If programs like Davis Dollars can get off the ground, DECO may well help incubate new community groups in the years to come.

Short URL: http://www.davisenterprise.com/?p=1819

Posted by Cheyenne Cary on Oct 20 2010.
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