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Banking your time to save you money
Echo Park in Los Angeles.
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Dr. Edgar Cahn, founder of Time Banks.
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Tess Vigeland: And we have one more banking story. I promise. And this one won't take a lot of your time. The time it will take, well, that's valuable, isn't it? I mean, time is money. So what if you could deposit and withdraw things like good deeds, or special skills, in a bank? In some communities you can. It's called -- duh -- time banking. Paul Rockower spent some time learning about it.
Paul Rockower: That's Carrie Grace, busy on the sewing machine hemming clothes.
CARRIE GRACE: And we just fit the jeans and he's happy with them. So now I'm gonna just put a gold stitching around the bottom of the jeans edge.
She won't be paid for this work. Carrie's a member of the Echo Park Time Bank in Los Angeles, and she'll earn something called Time Dollars instead.
Grace: I, in turn, will use my Time Dollars that I make to have a guy in the Time Banking network with us, come over and give my cat a diabetic shot once a day.
Carrie does costume work for movies and TV shows, and the hours are really long. Her cat, Jean Grey, recently became diabetic and need shots twice a day. Carrie's not always home to give them.
Grace: This has been a real lifesaver for me. Instead of paying someone through the veterinarian office or leaving work, which -- I really -- it's impossible for me to do.
She's not just trading sewing for pet care. Carrie can go online to the Echo Park Time Bank website and browse lots of listings of what other members can do for her. I caught up with one of the bank's co-founders, Lisa Gerstein.
Lisa Gerstein: Say I cut your hair for two hours, it's a long hair cut, you would give me two Time Dollars with which I could go back into the community and get basically any other service that anybody in the community had to offer. So that's carpentry. That's legal services. That's babysitting.
The Echo Park Time Bank has 75 members. That's triple what it had six months ago. Membership is limited to certain ZIP codes. The organizers want to balance growth with maintaining an intimate group. They get together for potlucks and other events to socialize and strengthen the network. You'll find time banks in 44 states and in 32 countries. The nonprofit Time Banks USA offers start-up kits for communities that express an interest. Dr. Edgar Cahn is its founder and CEO.
Edgar Cahn: There are two ways to value time. One is the market value. But for all of us there are domains in our life that are beyond market value. Family, neighborhood, community are critical. They may be invisible, they may not be part of the GDP, but they may be the most important asset we have.
Cahn says Time Banking is about teaching communities to meet their own needs:
Cahn: I remember when Time Banking got started, a priest saying to his congregation, "I have good news for you and bad news for you, and I can sum it up in the same sentence: We have no money, all we have is each other."
And during an economic downturn, time banks can be especially appealing. Echo Park Time Bank co-founder Autumn Rooney has seen a spike in membership since the financial crisis began.
Autumn Rooney: There's a lot of people who are losing their jobs right now and having financial problems. And this can be a real relief for people in small ways, and it's just a very timely thing to be creating Time Bank right now.
Ed Collom: It's reasonable that we would expect to see a rise in these local currency systems in tough economic times.
Professor Ed Collom is a sociologist at the University of Southern Maine. He studies social movements like time banking.
Collom: The idea is that time is valuable. And a lot of people have extra time to give and to do productive things. But many people don't have extra money to buy even the basic necessities.
And that's where time banks step in with their own brand of financial bailout.
In Los Angeles, I'm Paul Rockower for Marketplace Money.
Time Banking can overcome some of the psychological barriers of the recession...
http://tinyurl.com/cfmphf
JCt: When I visited Europe in 1999, I paid for 39/40 nights of accommodations with an IOU for a night back in Canada worth 5 Hours.
It's only a matter of time until all systems based on the Time Standard of Money will use the internet to intertrade globally. I did.
We need the United Nations Millennium Declaration UNILETS Resolution C6 to governments for a time-based currency to restructure the global financial architecture. Barter Timebanks are economic lifeboats.
See my banking systems engineering analysis at http://youtube.com/kingofthepaupers with an index of articles at http://johnturmel.com/kotp.htm
For anyone in the L.A. area, Edgar Cahn will be giving a lecture followed by a catered reception on Wednesday, March 11th, 2009, 7:00 - 9:00PM at The Metabolic Studio (Farmlab, Chora and AMI) www.farmlab.org 1745 N. Spring St., #6 L.A., CA 90012
Time Banking in Portland, ME has a tax-exempt ruling from the IRS. Because it is unlike bartering, which is tied to a cash value, and usually between two people, often professionals, (in the sense the services they trade are what they do for a living.) For example in bartering, which is taxable, maybe a dentist trades $400 worth of tile work with a contractor. They exchange equal amounts of services for a set cash price. With time banking, it is within a network of people and exchanges are not generally directly between two people, and the service is not tied to a cash value. Time banking or service exchange credits are considered friendly favors, much like volunteering, and are not contractual or legally exchanged services. A time dollar is based on 60-minutes and not worth any dollar amount. One hour equals one hour no matter the service. The tax exempt status is still current and was recently revisited in Portland, ME.
Communities are starting complementary currencies across the nation, not just in high-profile areas like Los Angeles. There is a network of non-barter Time Banks in Vermont (the Onion River Exchange in Central VT grew to over 200 members in the first year, and a non-profit to non-profit Time Bank is helping community organizations pool their scarce resources). Other currencies are popping up that are taxable because they unit of measure is based on dollars and cents (as opposed to time). These are much more applicable to local businesses.
Cover more complementary and community currency stories! They're a great way to keep moving forward in these tough economic times!
I was surprised to hear no mention of income taxes in this story, because bartered transactions are taxable in the same way that cash transactions are taxable. So I went to the Echo Park Time Bank web site, where I found no mention of taxes, but I did find a link to timebanks.org, which contains a copy of an IRS private letter ruling, issued in 1996. The IRS letter indicates that a certain unnamed time bank following a certain set of rules is itself exempt, and its member's transactions are exempt from federal income tax. Interesting, but is this 23-year-old letter applicable to similar time banks today? I found nothing on the IRS.gov site to answer that question. I'd be interested to hear if your reporter could dig a bit deeper into the tax question.
