Introduction
Win-win accounting
Community service
Transferable credits
Validation of credits
Mobility of credits
and project investment
Account
information and matching funds
Integration into
an economy
Some charitable considerations
What is the volunteer credit economy? It's an economy based on volunteer hours or service credits. These hours are usually recorded by the service agencies. What if we treated these records as bank accounts, and the hours as a form of currency?
This has been done in Time Dollars systems, also called service credit banking, where the hours are called Time Dollars and may be spent on services in time of need. It's a form of social security.
But the agencies worry about Time Dollars. If the volunteers are building up all this credit, isn't that a big liability that the agencies must make good on some day? Is this win-win or win-lose?
It's true that our familiar money system depends on win-lose, zero-sum, balanced-books accounting, where every credit is balanced by a debit. The total amount of money remains the same, and every penny is accounted for.
But the money must have been created somewhere, and we find it is created in a win-win process at the top, where the Federal Reserve and the Treasury create and exchange equal amounts of dollars and Treasury bonds.
Volunteer hours are created at the bottom, by volunteers and service agencies, and they too follow win-win rules. Volunteer hours are a credit to both the volunteers and the agency.
The agencies know that already. That's the reason they've been recording the hours. They take credit for the number of hours of work contributed to the community, and the numbers are part of the funding requests they submit every year.
The agencies have been taking credit for volunteer hours for years. They've also given credit to volunteers in the form of awards and dinners. The win-win pattern is established, but very modest. If we expand it, we must expand the wins for both parties. Let's look at a somewhat similar existing arrangement where the credits are more substantial.
Community service jobs have been administered by nonprofits for many years, usually for those sentenced to community service by the courts. Many schools and colleges also send their students out for "service learning" credit, though this has led to protests that students are being treated like criminals. Now welfare reform is sending a whole new population out to work, and community service jobs are at a premium.
Community service differs from volunteering (working for nothing) and Time Dollars systems (working for credit for future services). It's working for immediate benefit, whether it is paying off a debt to society, earning academic credit, or earning a welfare check. In all cases the agency providing the jobs does not have to provide the rewards, and may in fact be reimbursed for administering the work.
Community service jobs are needed not primarily to serve the community, but to train and rehabilitate the workers, and to reduce costs elsewhere. Community service jobs may be cheaper than prisons and schooling. They may also reduce demand for services, since there is a time cost, and people will self-select on the basis of need.
There's a growing demand for community service jobs, preferably quality jobs that benefit the worker and the community. There's a bureaucratic bottleneck in administering such jobs, which we'll try to get around by means of a volunteer credit economy.
Why don't we call it a community service economy? One reason is that we want to promote the voluntary principle, so that workers have more choice, and participate freely in an economy rather than following the dictates of authority. Second, the volunteers who save their credits will have an important role to play in shaping this new economy and preserving its integrity. To reach this future ideal, we have to take the various kinds of service credits through a number of steps of development.
At present most volunteer credits are immobile. Community service credits are usually good for only one specific benefit, such as academic credit, sentence reduction, or a welfare check. Time Dollars are more like a currency, in that they can be spent on a variety of services, and can be transferred to other people. Time Dollars are leading the way towards a new economy, where credits may move freely between both individuals and organizations. But, as we have noted, Time Dollars are still seen as liabilities, and longterm provision of services is still uncertain. Time Dollars also tend to be limited to a single local credit bank.
Transferability of credits between organizations is a crucial part of the volunteer credit economy, and a major step for any organization to contemplate. But we have a precedent here also.
Academic credits follow win-win principles, in that they are a credit to both the student and the school. A school is proud of the quality of its credits, and of the students it graduates. When a student transfers to another institution, the accumulated credits can be transferred, if they meet the standards of the new school. There is a strong incentive for every school to meet the standards required for transferability of credits. Once this standard is met, credits can be transferred around the world.
The volunteer credit economy requires a similar standard, and it also provides an economic mechanism for establishing it, to be discussed in the next section. Standards and validation are especially important for community service, where credits are exchanged for substantial benefits. Bureaucratic validation and oversight are too expensive, and an automatic economic method will be very attractive.
Agencies may at first ask why they should subject their credits to the test of transferability. The first answer is that passing this test, meeting this standard, makes their credits much more acceptable to funding agencies. They're worth money, in other words.
There are other reasons: Meeting a standard means the agency is doing a good job. And transferability gives volunteers and service workers expanded choice of where to earn and spend their credits, opening up the unlimited opportunities of a new economy.
Validation of volunteer hours as acceptable for exchange is an essential part of the big picture, of establishing a new universal currency. But it starts at the most local level.
Within a community, the credits of all local agencies of good repute may be accepted as valid and interchangeable. When a volunteer wants to move accumulated credits from one agency to another, it's like changing banks, except that each bank issues its own brand of currency. The new bank or agency would accept the old credits and issue new ones. Thus the effect of each transfer is that agencies accumulate the credits of other agencies, as assets.
This accumulation of assets tends to guarantee the convertibility of an agency's credits. Each organization's credits are validated by whether they are convertible into valid credits. The validation test for credits issued by dubious, unknown or distant groups goes through two stages. First, the credits are not accepted for transfer and are returned for exchange. Second, if the issuing agency has no valid credits as assets that it can exchange, then its credits are invalid.
This validation test is simple, automatic and absolute. It determines who can issue valid credits and how much. It ensures that all the volunteer credits in the economy meet a certain standard of value and are interchangeable.
If volunteers never move their credits, no validation occurs. But even some occasional movement out of an organization can test its credits and provide a signal that it has lost the confidence of its volunteers. And in the long run, volunteers may collect their scattered credits and consolidate them in the organization they currently trust and support.
We'd like some more mobility of volunteer credits, especially at the start, when transferability is introduced. Then everybody can see how transferable credits work and what the benefits are.
We can introduce mobility within organizations, at the project level. All volunteers, on their first statement, would be given a list of projects to invest their credits in, with the information of total investment in each project, plus the agency's own commitment and any external funding or match. Donors and funding agencies would also get this information, and find it useful.
It doesn't matter how much weight is given to the volunteers' investment of credits, in terms of agency or donor match. Even if it's nominal, it gives the volunteers something to do with their credits, and involves them in the nonprofit economy. It makes the credits mean something, instead of sitting in an account, forgotten.
If an agency is ready to meet the test of transferability, it will give the volunteers access to the project lists of other agencies, thus expanding their choice of investments and leading to true mobility of credits between agencies. Transfers generally increase agency assets, and only marginal organizations have anything to fear from this process.
The more mobility of credits there is, the more information is available for donors, funding agencies, and the management systems of the larger nonprofits. How much weight should they give to volunteer investments and project support?
The volunteers carry a powerful moral weight, since their investments are proportional to their contribution to society and their length of service, and they gain no direct return. On the other hand, could their judgement be swayed by false or inadequate information, by popular fallacies and prejudice, by the manipulation of public opinion by the media?
The project investment model requires a lot of fine-grained accounting and reporting. The accounting is simple enough. Each volunteer's account can easily be subdivided into project accounts. The reporting will be voluminous, but this is just what donors and funding agencies want. They want accountability. They want their funds to be an exchange.
At present administration of funds is a bureaucratic challenge. Who do you trust? How do you oversee the spending? How do you measure results? Thus funds tend to be spent on a lot of bureaucracy and on a limited range of conservative projects.
That is why matching funds have such appeal. Accountants like to see an exchange for their funds, to balance their books, to offset their expenditures against some other numbers. Any nonprofit that can produce new meaningful numbers is likely to gain more matching funds.
The new numbers represent volunteer support for different projects and agencies. They will be weighed along with the existing numbers of agency budgets and staff time and past performance, and the donors will decide what level of match to give, how many dollars per hour. And the agencies will see what they've gained from providing the volunteer accounting.
Just providing the volunteer investment data will catch the eye of donors: Here's an agency with initiative, offering something new. And shortly thereafter, we'll know the payoff. We can expect volunteer credit accounting to pay for itself. No idealism required. In that case, volunteer credit accounting and project investment can be expected to become normal nonprofit practice, with standard software reducing the costs near zero.
Volunteer credits see their first stage of integration at the local level, where they may be accepted from all local agencies of good repute. We might grant that volunteer hours established in other communities are equivalent, but we'd still want to keep our accounts locally, so wider integration would require some networking and exchange through nonprofit banks with branches in most communities, such as Salvation Army and the Catholic Church.
Actually, the regular banks managed transfers and exchange quite well even when branch banking and interstate banks were forbidden. Wide-area integration is not a problem.
Functional integration is another question. At present every service program is separate. Their credits are not equal. Volunteer hours are good for nothing. Time Dollars are good for services in time of need. Service learning hours are good for academic credits. Community service hours are good for a welfare check or sentence reduction. Time Dollars can be transferred to someone in need, but this would not be acceptable for academic credit or sentence reduction.
We're not talking about a totally free market
here. There are still eligibility requirements for services or
welfare checks. There is still the requirement to earn your credits
personally for academic credit or sentence reduction. These limitations
will coexist with the development of a free market for credits,
and every agency remains free to apply its own conditions.
However, the ideal is an economy that volunteers and clients can
feel they own, with their own earning power and choice of occupations,
education, services and advancement. The ideal is an economy for
the nonprofit sector where markets replace bureaucracy. And there's
a very real possibility that the win-win structure of the volunteer
credit economy may provide a new model for profit as well as nonprofit
enterprise.
What about the incapacitated, the bedridden, those incapable of work? What is their place in the volunteer credit economy?
They may in fact have to work very hard just to get through the day. Just as study time may count as work, so may following a therapeutic regimen, or self-help practices that reduce the burden on caregivers. These activities may even pay off in monetary terms, reducing the cost of services.
Besides earning self-help credits, the disadvantaged may receive charitable credit donations from others, and may be granted the power to create the credits they need because they deserve it.
This question of deserving underlies the acceptance and validation of volunteer credits. Agencies that are lax or fraudulent may find their credits are not acceptable. At the other extreme, agencies that cater to clients with special needs may issue extra credits which are widely accepted because we feel the client group deserves our support.
The charitable nature of the volunteer credit economy is inherent in the win-win principles of currency creation. To whom do we grant the privilege of making money? Whose currency do we accept? Those we think deserve it. Not the smartest or most capable or most competitive. Certainly not the rich. No, the win-win economy fulfills the biblical prophecy: