Ten years ago, Susan Dentzler of NPR was retained by the Robert Wood Johnson Foundation to investigate whether time banking (a system that lets people swap time and skill instead of money) was “a concept whose time was coming—or merely a fringe idea.” Her response:
“[T]ime dollars could be to long-term care what windmills and solar panels are to the nation’s energy supply: a small, unconventional, even noble way of serving the few, but nothing to be relied upon to meet the needs of the masses.”
Ten years later, though solar panels and windmills have moved far from the fringe, time banking has remained a relatively small-scale endeavor. But for a number of reasons, the idea may be poised to become more mainstream.
Why Time Banks?
Twenty-five years ago, we started the first experiments with a different kind of money that provided a new way to link untapped community capacity to unmet needs. Because the market fails to value or reward many types of critical work—the work of raising healthy children, building strong families, revitalizing neighborhoods, preserving the environment, advancing social justice and democracy—we felt there should be other ways than market price to place a value on people’s time. There had to be a way to honor, record, and reward that kind of work.
Long before the Occupy Wall Street movement, the Time Bank movement represented a determination to take a stand for a more equitable, inclusive economic order. We wanted to demonstrate that a different kind of money could exist alongside the dollar, generating a different set of exchange transactions. We believed it could generate positive community-building efforts that might remedy or prevent the negative externalities created by the relentless pursuit of monetary profit.
Time banking refuses to grant money a monopoly on the definition of value, instead creating a new kind of money originally called “service credits.” That idea became known as Time Dollars, and later, as it spread beyond the United States, TimeBanks. The concept is simple: one hour of help of any kind given to another member earns one time credit, exchangeable for an hour of help in return. One equals one. That’s the math. The IRS has consistently ruled that time banks are not commercial barter organizations, so time credits earned are not treated as taxable income.
After 25 years of experimentation, learning, and expansion, the United States has 300 registered time banks. The smallest has 15 members; the largest, 3,000. At present, time banks have enrolled 30,000 members in the United States, 30,000 in the United Kingdom and an additional 100,000 scattered across 34 countries.
With the unemployment rate staying stubbornly high, many people simply don’t have access to traditional jobs or traditional (i.e. monetary) compensation right now—but that doesn’t mean their talent and time should go to waste. Especially as the programs that address our public needs, particularly those of the most vulnerable parts of our society, face cuts, there are plenty of ways to utilize these large reserves of untapped capacity. In the absence of money, a different kind of currency or exchange system—like time banks—just might fit the bill.
Given the current state of the economy, the question that everyone asks about time banking is: How can it help us get through this recession? In more ways than you might think. The responses fall into different categories:
One involves direct budget relief: People can get the things they need—like house repair, yard work, child care, elder care, haircuts, carpools, or moving services—directly from members of their community, without money having to enter the picture at all. And time banks offer continued access to many of the things cut first when money gets tight—for example, art, dance, or language classes.
Another is the use of time banking to help people build bridges back to the monetary economy. People use time dollars to get help with their job hunt—preparing resumes, practicing interview skills, learning computer skills, or getting support with transportation and childcare. Time dollars can also offer a less capital-intensive way to set up a new small business.
There’s also momentum building around an emerging use of time banking that’s less familiar. As governments cut services and programs for the most vulnerable Americans, time banking is moving beyond individuals: institutions are attempting to fill the gaps by enlisting their communities as partners in their work. Four examples reveal the breadth and magnitude of what TimeBank initiatives can do:
- In 27 of the lowest performing elementary schools in Chicago, fifth and sixth graders tutored and mentored second and third graders in an afterschool program that generated improved attendance, higher test scores, and fewer instances of fighting and bullying. Research has long established that peer tutoring by older children consistently generates major gains. Using TimeBanks to sustain it and engage parents as well provides the data needed to prove outcomes.
- In Washington D.C., for the past ten years, teenagers have earned time credits by serving as jurors in the Time Dollar Youth Court, which hears the cases of peers accused of nonviolent crimes. Offenders may be sentenced to community service, life skills classes, an apology, writing an essay, or duty on the jury. Recidivism rates are less than 10 percent; the Urban Institute estimates that the District saves $9,000 for every offender who goes to Youth Court instead of the traditional system.
- The National Homecomers Academy enrolls people leaving prison as students on a journey of personal development, learning, and service. Community service includes, for example, helping youth get to school safely across gang or helping reduce violence by teenagers in a mixed ownership-tenant housing development. Nationally, recidivism for persons returning from prison is in the 60-70 percent range within three years. So far, at the National Homecomers Academy, it is zero after a year and one half.
- In Montpelier, Vermont, the Administration on Aging has invested in a form of time banks called Carebanks. Seniors can get an assurance that informal care and support will be available if they or their families pay regular premiums—in time dollars earned helping build community or helping other seniors. In effect, the program uses time banking to create a new form of extended family. It is too early to project cost savings. But a recent study reveals that, as home-based care gets cut by state governments, hospital costs will likely rise as people are put off preventative care, or end up re-hospitalized due to the lack of transitional care.
Time banking is also getting a boost from new software that will make it easier to log, track, and share hours (the software documents engagement, reliability, punctuality, and trustworthiness). The open-source code is available to individual time banks so they can easily build customized websites. Over 200 separate time banks are now using this open source version. And by next year, it will be on smart phones and tablets, radically expanding access to one’s time bank family.
An Evolving Tool
Over the years, I’ve watched time banking go through phases—but it has always been about empowerment. The first phase was about neighbor-to-neighbor skill sharing. Too often, we live close together, but as strangers. We don’t know what our neighbors can do; we don’t know whom we can trust. Time banking provides the vehicle to discover the vast wealth of capacity that surrounds us—and it makes trust possible because every action creates a track record known to others.
TimeBanking then moved on to the even more catalytic phase of co-production. This has involved getting the nonprofit world and human service professionals to appreciate that they accomplish most when they enlist the clients and community they served as co-workers and partners who “co-produce” the needed outcomes. This can yield major institutional change in all kinds of areas: child development, elementary and secondary education, family support, professional training, juvenile justice, eldercare, violence reduction, returning veterans, re-entry from prison. That transformation is already underway in field after field; it could go viral, as we begin to understand the possibilities that exist beyond conventional money.
Now we are seeing a third phase emerge: Micro-enterprises are emerging to provide respite care, transportation, home repair. They bridge the economy of money and the economy of community.
Ultimately, time banking is about hope and possibility. Market price cannot be permitted to monopolize our definition of value. Nor can the availability of money be permitted to define the range of the possible.
Beyond revolution and reform: Gar Alperovitz on how we can fundamentally transform our financial system.
Corporations aren’t hiring, and Washington is gridlocked. Here’s how we take charge of our own livelihoods.
Just how effective was Bank Transfer Day?