Volunteer hours are recorded by nonprofits in a book or computer, and are a credit to both volunteer and organization. In some cases the nonprofit may get matching funds for the credits recorded, and this makes it worthwhile to do this small amount of accounting.
In a related development, community service hours are now required in many places for welfare payments, and time spent in job training may also count. Community service is also required by courts in many cases, to repay a debt to society.
Another variant applied by some health clinics, is to require payment in either money or volunteer hours for services. This solves two abuse problems: the overuse of free services; and the false assertion of poverty. A reduction of demand and increase of receipts results.
And many food assistance programs require volunteer hours worked anywhere in the community in exchange for the food allotment.
We can see here the emergence of a common currency, the service hour, which is useful to providers and donors. It improves the efficiency and equity of distributing private and public funds.
What if we take the next step, and link these credits together in a single economy?
Service credits are recorded like a bank account. The nonprofit is the bank. The workers own deposits in the bank, measured in hours. Sometimes they spend them right away on needed support and services. Otherwise they save them for a rainy day. In Time Dollars systems operating in several cities, the 70-year-olds care for the 80-year-olds, and figure they'll need to use their credits some day.
Nonprofits may take a while to get used to the idea of being banks. It will pay off in matching funds, and the accounting's pretty easy, compared with money.
It also pays off in volunteer retention. Volunteers like to see their credits piling up, even if they don't do anything with them. It's recognition for all they've done.
What good is a bank account if you can't take your money out? That's where volunteer credits are today. The challenge to each nonprofit is to make its credits convertible, and thus join a larger economy.
Why would volunteers want to move their credits? The default is to leave them where they earn them. But if the nonprofit behaves badly the volunteers may try to pull their credits out, and other nonprofits may refuse to accept them, and the credits become nonconvertible.
Convertibility indicates that a nonprofit meets a certain standard of trust. Volunteer credit movements can give early warning of trouble that donors might not otherwise detect.
When a volunteer transfers credits, the receiving bank issues its own in exchange, and assumes ownership of the original credits. Thus nonprofits can own credits as well as volunteers, and they can move them again. The total deposits in any nonprofit bank will be the sum of volunteer and nonprofit acceptance of and investment in its credits. Donors can follow the judgement of the volunteers and nonprofits and allot matching funds, not where the credits are earned, but where they end up. Even nonprofits which don't use volunteers can benefit.
It's easy enough for a nonprofit to subdivide a credit account into projects, so that volunteers may invest their credits in the projects they support. Donors are also interested in investing in projects, so this is a natural match.
Donors will appreciate the information on which projects have support, and volunteers and nonprofits will want to invest their credits where there is a good donor match. This is a positive-feedback loop that focuses resources on the most promising projects.
Project investment gives volunteers something to do with their credits, and creates a capital market. A new project is like an IPO, and it's quickly apparent if it has the support to succeed.
It only takes a few struggling nonprofits, a few individual donors, and a few inexpensive project ideas, to demonstrate transferable credits. Such a demonstration project is itself something to be invested in, something that may have an impact on the wider community. Because the nonprofit sector goes all the way from one-person operations to global NGOs, and includes government distributions as well.
Like individual donors,
large organizations look for accountability in where they spend
their funds, and the win-win accounting described briefly above
promises to provide it. Currently there is great waste where resources
are distributed according to complex and circumvented rules. Service
credits provide the matching accounts necessary for efficient
allocation of funds.