The following are some of the key issues that the founders of a community coupon system may wish to address. Some of these issues may not be relevant under particular circumstances, while other issues that are not herein described may require attention.
1. The Foundations
What are the objectives in establishing the system?
Is the focus on diversifying the local economy, strengthening the social fabric or educating community members? What indicators will be used to measure success?
Who is the ‘community’? Who is NOT the community?
Community can be determined not only by geographic boundaries, but also by social and economic ties.
What are the membership qualifications?
Will members join as individuals, households or organisations? Can children be members? Will a membership fee be charged? An account holder agreement (see (6) below), might be useful.
2. The Coupon
Though it would probably make more sense to place the design of the coupon at the end of the implementation process, the psychological importance of the coupon as a rallying point should not be underestimated.
Will the value of the coupon be equivalent to one unit of the national
There are various arguments both for and against such a standard. Across the world, systems have variously tied their coupon’s value to the national currency, equated it to an hour of labour, or defined its value independently. The steering committee should discuss these various arguments, making a decision that is appropriate for local circumstances.
What should the coupon be called?
Ideally, the name of the coupon should be taken from something familiar which instills both confidence and pride in community members.
What should the coupon look like?
The coupon should be roughly the same size (though not identical) as the national currency. It should easily fit in wallets and purses. The design should be professional, preferably incorporating local plants, animals or people.
What steps can be taken to prevent forgery?
Coupons printed in multiple colours on high-fibre content paper are more difficult to forge. After printing, the coupons should be stamped with serial numbers. This process should be witnessed to assure transparency. Small numbers are preferable, so those community members using the coupons do not fear that there are an infinite number of notes floating around the community. (First editions or coupons bearing lucky serial numbers can be set aside to sell as a fundraising activity!) Furthermore, when the coupons are issued to community members, they may be stamped with the date and signed by the Treasurer. The colour of the date stamp can be changed monthly as an additional insurance against forgery.
Decisions will have to be made about what denominations to print and in what quantity. There is no need to feel bound by the denominations of the national currency—the coupons belong to the community! After an initial printing, test the durability of the coupons by putting a few through the ‘laundry’ test. Of course, notes which have become too worn, ripped or otherwise damaged can be exchanged for new notes at the coupon bank (as long as the serial number is still legible.)
A record of disbursement of coupons should be kept. This will
allow all community members to see how many coupons have been produced,
how many have been issued, and to whom they were issued. This will
help to avoid any future suspicions of corruption on the part of the management
3. Organisational Structure
Either members of the original steering committee or other members of the community should organize a coupon system management committee. It will have to be decided if these positions are elected or on a volunteer basis; will the positions be permanent or rotating; should compensation, in either community coupons or national currency be required. Depending on the views of the steering committee, there may be a need for an advisory board or an auditor, though neither are absolutely necessary.
System management roles might include (adapt as required):
The system steward is responsible for the successful operation of the
system as a whole. In consultation with the management committee,
The recording co-ordinator is responsible for the supervision of both
individual members’ accounts and the overall balance of the system.
The system developer plays a key role in strengthening the system by:
The promotions manager is responsible for the creation of materials
and organisation of events designed to keep members informed and enthusiastic
about the operation of the coupon system.
4. The Coupon Bank
What are the physical requirements of the bank?
Where will it be located? When will it be open—daily or only once a month? Will there be ‘branch offices’ to increase convenience? What materials are required? (filing cabinets, computer, safe, account books, paper, envelopes, rubber stamp, etc.) Account books, which allow for the recording of deposits and withdrawals, may be needed, as well as deposit and withdrawal forms.
What are the bank’s policies?
The central policy of any coupon bank should be that there is no interest charged on loans nor given on deposits. But will there be a credit limit on loans? Or a deposit limit on savings? This should involve a discussion of the potential risks of inflation. Inflation, in a community coupon system, means that there are more coupons in the community than members are able to spend. How can this situation be monitored and avoided? What, if anything, should be done with members whose accounts are either excessively negative or positive? What should be done about members who leave the system? In some systems, any outstanding debts have had to be paid back in the national currency.
Demurrage: the steering committee could study the potential of levying a fee on money, which can be used also as a tax. A demurrage is a deliberate devaluation of the community coupon with the purpose to spur circulation and prevent hoarding.
How will accounting be managed?
The absence of interest means that accounting in a coupon system should be simple and transparent. When withdrawals are made, a withdrawal slip is filled in (preferably in duplicate). A record of the coupons issued will be kept on a disbursement sheet (see above), and a corresponding entry will be made in the member’s account book. When deposits are made, the opposite occurs. (Note that it is possible for members to trade without coupons, simply by reducing the balance in the account of the receiver of goods/services the same amount as the amount of the giver is increased.) Summaries of the balance of the whole system should be made at the end of each accounting period.
Members should be advised in advance of any withdrawals to be made from
their account for administrative costs of any kind. In most community
currency systems, any member can request to see the books at any time.
Are there other ‘social controls’ which could be used in your community
to prevent undesireable behaviour?
5. Other Issues
What mechanism will be employed to resolve any conflicts between the
system management and individual members or between individual members?
Some systems have found it helpful to appoint an independent ombudsperson to mediate in situations where conflict can not be resolved by the parties involved.
Is there a need for an emergency fund?
If, due to excessive inflation, corruption, or other reasons, there is a loss of confidence in the system, will there be provisions for those who are left with coupons in hand? How will transparency and equity be maintained in such an event?
What’s possible for the future?
Steering committee members should discuss the future role and potential of the system. Can a greater variety of goods and services be produced on a local level? How can education and health care be taken out of the buy/sell system? Can key inputs, such as rent, wages, or taxes be incorporated into the system? In Ithaca, New York, the local credit union, Alternatives, accepts Ithaca Hours coupons for payment of interest on loans.
6. Account Holders’ Agreement
An Account Holders’ Agreement might include the following:
? A statement of the working principles or objectives of the system.
? Members, not the system or the management, will be responsible for the price and quality of goods in any transaction.
? Coupons which are lost or stolen are the responsibility of the member. Coupons which are damaged may be exchanged for new coupons at the coupon bank, providing that the serial number is legible.
? Members agree that the Recording Coordinator will maintain their accounts. Any errors must be immediately pointed out at the time of the transaction.
? Outline dispute resolution mechanisms, both between members and between members and the system management. Procedure for the revocation of membership.
? Procedure for the resolution of outstanding debts should members leave the system for any reason.
? The Recording Co-ordinators will transfer coupons from one member’s account to that of another only on the authority of the member making payment.
? Recording Co-ordinators are authorised to levy administrative fees on member’s accounts at rates decided upon by a meeting of the general membership.
? An account-holder may know the balance and trading volume of any other account holder (if desired).
? A statement regarding the value of the coupon and the process for
revaluation, if necessary.