Think Local First to study if local currency makes sense for Ann Arbor businesses
The idea of establishing a local money system is gaining some currency.
The Ann Arbor Downtown Development Authority has given Think Local First a $6,000 grant to explore the idea of establishing a local currency as a way to build the local economy. A series of three community meetings will be held later this month and in early March to explore the options and gain reaction.
Local currencies are a way to bring attention to the importance of buying local and keeping dollars in the community, said Ingrid Ault, executive director of Think Local First, a member organization of independently owned businesses.
There are more questions than answers about starting a local currency, from who would sponsor it to how it would work. The meetings will be the first step to gauge interest, Ault said. The study will include Ann Arbor and Ypsilanti, Ault said.
“The DDA wants to know if the community would support a local currency and, if yes, which model to use,” Ault said. “Ultimately, they want to know if it would encourage people to support local businesses.”
Four models are being explored, and each model could be tweaked to reflect what the community wants, Ault said. The four are:
â€¢ Paper currency, where local money is printed and used much like the federal currency. It could only be spent at participating businesses, could be issued at banks and could come with a discount to entice use, Ault said. For instance, $100 in local dollars could be purchased for $95. There could be local participation to develop the actual currency and it could honor local residents, a la George Washington and the $1 bill. The BerkShares program in New York state is an example.
â€¢ Time share currency, where participants would earn local currency by working - such as baby sitting for members of the time share - and then spend it at participating businesses.
â€¢ Barter currency, where participants sign up on-line for a nominal fee to list goods and services they have to offer. Goods and services could be directly exchanged or their value could be banked in the form of trade dollars for future purchases.
â€¢ Coupon currency, where currency is printed in various denominations that could be used toward making purchases at local participating businesses. Local business could advertise on the backs of the dollars as a way to raise funds for printing. Businesses that accept the currency could turn around and use the currency to pay for goods and services, keeping it in circulation.
Some of the models carry little cost and not much overhead while other models would require a heftier investment and a fair amount of oversight, Ault said. “The DDA wants to know if there would be a return on investment.”
Think Local First will present its findings to the DDA in late March.