Monday, December 28, 2009

Community-currency loan stimulates flurry of economic activity

Human-services organization turns to non-U.S.-backed funds to pay employees annual bonuses, expand programs for those it serves

Submitted by:Resources For Human Development

Posted: Dec 28, 2009 – 10:36 AM EST

PHILADELPHIA, Dec. 28 /CSRwire/ - A national nonprofit that borrowed 25,000 Equal Dollars, a currency complementary to the U.S. dollar, has made its first payment on the five-year, interest-free loan, demonstrating that an adjunct economy in bills and credits other than those issued by the Federal Reserve can help corporations and families prosper when greenbacks are scarce.

Resources for Human Development (RHD) earlier this month made its first installment on the loan in the amount of 1,000 Equal Dollars, a significant milestone considering the human-services provider had to cultivate new income streams in Equal Dollars to repay in the same currency.

"This experiment is working, and it's working well," said RHD founder and CEO Robert Fishman. "And it can work for other corporations, too, as well as governments and small businesses."

RHD negotiated the loan from Equal Dollars Community Currency this summer, as it struggled to come up with a way to provide annual bonuses for its Central Office employees amid a tight budget in a lackluster economy. With the zero-interest loan, RHD paid bonuses of 100 Equal Dollars to each of its 250 headquarters workers.

But that was only the start of RHD's efforts to make good on its promises to repay the loan. Next, it had to make sure its employees had meaningful goods and services on which to spend their new Equal Dollars. And it had to ensure that it somehow developed an income stream of Equal Dollars, so that it could satisfy its debt. The Equal Dollars bank does not accept U.S. dollars.

So RHD, a sprawling nonprofit with 160 people-helping-people programs in 13 states and with stakes in several for-profit socially conscious businesses, went to work.

It asked one of its for-profit spinoffs, Brothers' Keepers Hope Improvement, which offers employment to ex-offenders, to pay rent in Equal Dollars for space it uses at RHD's headquarters building.

Then it expanded a weekly vendors' bazaar in which individuals offer everything from handmade crafts and clothing to personal hygiene items and household goods for a combination of U.S. and Equal dollars. Each of the vendors pays a fee to RHD in Equal Dollars in return for their booth and access to the consumers.

And, most significantly, RHD started a one-day-a-week produce market for the community in unused space in its basement. Stocked with fruits and vegetables donated by a large food wholesaler, the market exchanges family-pack bags of food for equal amounts of U.S. and Equal dollars, using the Federal Reserve bills to offset transportation and related costs and stockpiling the Equal Dollars to repay the debt obligation.

The produce market has become wildly popular, leading RHD to seek out other "end of commercial life" products that it can breathe a second life into and generate more Equal Dollars for corporate coffers and more savings of U.S. dollars for consumers.

"The beauty of all of these activities is that they are sustainable, that they save consumers U.S. dollars and that they serve needs that otherwise couldn't be satisfied because of the scarcity of government-issued money," said Peggy Mowatt, RHD's chief operating officer.

A natural outgrowth of RHD's efforts to generate income in Equal Dollars has been the growth of other economic activity in Equal Dollars.

For example, Brothers' Keepers president Gerald Hatten, faced with paying rent in Equal Dollars to RHD, began accepting Equal Dollars from clients engaging his firm in home-remodeling and commercial-cleaning jobs. His clients, eager to save traditional, U.S.-backed bills, scrambled to find ways to generate their own Equal Dollars to pay Brothers' Keepers.

"It's amazing how rapidly this concept can spread throughout a community," Hatten said. "One thing we didn't expect when we began accepting Equal Dollars is that it also set us apart even more from our competitors. It makes us special, and that's a leg up in this economy."

Equal Dollars is beginning to pervade other facets of RHD's operations as the organization learns how to apply the complementary currency.

Just recently, when RHD launched a newspaper in Philadelphia written by residents of its homeless shelters, it wrestled with how to offer the shelter residents a credit line to buy newspapers they would then distribute at a markup to passersby on the street. The publication's business model called for those who are homeless to pay 25 cents for each paper to offset printing costs, with the remainder of each $1 exchange to supporters going directly to the homeless distributor in an effort to offer them enough income to leave the street behind.

The problem was the shelter residents couldn't afford even the upfront 25 cents per paper.

"There just wasn't any money in the budget to advance them papers they could distribute for $1 donations on the street to reinvest in more papers," said Eddie Byrd, RHD's director of marketing and communications and a consultant on the project. "So we came up with the idea of giving each of the distributors a credit line of 10 Equal Dollars. That gives them 40 papers they can accumulate $40 from. And that's all they needed to get up and running."

Deneene Brockington, director of the Equal Dollars Community Currency, notes that even the newspaper's modest adoption of Equal Dollars will spread the reach of the alternate currency.

"If that newspaper is giving a 10 Equal Dollar advance to, say, 25 distributors, each of those 25 vendors is going to have to come up with a way to earn at least 10 more Equal Dollars so they can repay," she said. "That means more goods and services are going to be offered to more people who will also want to earn Equal Dollars so they can save on U.S. dollars. Equal Dollars is generating more economic activity every day, and it's all economic activity that wouldn't have happened if it depended on Federal Reserve currency alone."

Equal Dollars Community Currency is focused on the Philadelphia area. But its principles can be replicated anywhere.

RHD CEO Fishman believes financially strapped governments should consider embracing Equal Dollars to ease the effect of declining revenues from the recession.

"A community currency like this is more productive and sustainable than, say, one-time stimulus funding," he said. "Instead of endlessly scouring budgets for more cuts, governmental entities could be using complementary currencies to augment services to their citizens, and we would be please to get them started."

At RHD, Fishman is always thinking up new ways to fill the corporate treasury with fresh Equal Dollars that can then be used to reward employees and develop new services for those the nonprofit serves.

"Equal Dollars is an engine of growth whose power we are only beginning to enjoy," he said.

With the strong creditworthiness RHD is building at the Equal Dollars bank, expect to see more of RHD's growth from return trips to the community currency's lending window.

To learn more about Equal Dollars, contact Deneene Brockington, director of Equal Dollars, at or call at 215-951-0300, ext. 3027.

About Resources for Human Development
A national human services nonprofit founded in 1970, Resources for Human Development serves tens of thousands of people every year in 13 states. RHD delivers caring, effective and innovative programs addressing intellectual and developmental disabilities, behavioral health, homelessness, addiction recovery and more. In partnership with local governments and those we serve, RHD builds better lives, families and communities. To learn more about RHD and its more than 160 programs, visit

For more information, please contact:
Kevin Roberts Communications
Phone: 215-951-0300, ext. 3714
Deneene Brockington Director, Equal Dollars
Phone: 215-951-0300, ext. 3027
Eddie Byrd Director, Marketing & Communications
Phone: 215-951-0300, ext. 3950
Phone 2: 610-389-7266

For more from this organization:
Resources For Human Development

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