Davis Dollars Are Homegrown Cash
The Sacramento Star - Pamela Martineau - When a shop in Davis sells something, the merchant may just get bicycles and tomatoes for payment rather than Benjamin Franklins or George Washingtons.
Davis is one of a growing number of communities around the country that has adopted its own currency – a way to encourage residents to shop at local businesses, and to keep their money in town.
An old-fashioned bicycle – the logo of the city of Davis – adorns the Davis Dollars $1 bill. Images of tomatoes and horses decorate the $5 and $10 bills – nods to Yolo County's agricultural heritage
Launched in May 2010, the Davis Dollars currency was started by Nicholas Barry, 27, a UC Davis economics graduate, and is now overseen by a nonprofit staffed by volunteers. The city of Davis is not involved.
"From an economics point of view, we thought it sounded like it made a lot of sense as far as keeping spending local," said Barry. "Davis Dollars also is a way for community members to get to know each other."
Local currencies, also known as scrip, were popular in the Great Depression, when banks were failing and people wanted to keep local commerce alive. Now they are back as a way to try to keep spending local.
The Davis effort is still tiny. There are about $3,500 worth of Davis Dollars in circulation, said Barry. They are accepted in lieu of U.S. currency by about 50 small businesses and local service providers. The businesses range from restaurants to bicycle shops and music stores. Local service providers include personal trainers, janitorial services, counselors and dog walkers.
The currency can be purchased online at davisdollars.org or at the Davis Farmers Market. One U.S. dollar trades for one Davis Dollar, but when converted back to U.S. currency, the exchange rate is 95 cents for one Davis Dollar. The lower exchange rate is to encourage people to keep the dollars in circulation. However, exchanges over $500 are on a one-to-one basis to help businesses that use larger amounts of the currency. Purchases made with Davis Dollars are taxed like any other sale.
Rhonda Gruska, co-owner of Monticello Seasonal Cuisine, a Davis restaurant, said the philosophy of local currency fits with her business values.
"We serve local seasonal food," said Gruska. "Almost everything we serve comes from Yolo County. Our emphasis is local, so it's a perfect fit for what we do."
Gruska said the currency – while still fledgling – strengthens bonds among local business owners. For example, she sometimes spends Davis Dollars at Ken's Bike and Ski Shop near her restaurant. When she shops there, she encourages the owner of Ken's to use the currency she has spent at his business when he dines at her restaurant.
"So I go and spend them there and say, 'We expect you to bring them back,' " said Gruska.
There are dozens of local currencies throughout the country in such places as Brooklyn, N.Y.; Philadelphia; Baltimore; Portland, Ore.; and Ithaca, N.Y. California alone has about a dozen local currencies, including Fairbucks in Fairfield and the Trade Market currency in Nevada City and Grass Valley. Farmers markets throughout the nation – including Davis' – also sometimes sell tokens for shoppers to spend exclusively at the market.
One of the most well-known and oldest community currency programs in the nation is Ithaca Hours, in upstate New York. That program was started in 1991 by Paul Glover, who literally wrote the book on local currency. The book, "Hometown Money," highlights the benefits and history of community currencies.
Danielle Klock, who describes herself as an ambassador for Ithaca Hours, said the currency program has attracted interest lately from people who want to launch local currencies.
"We really have a resurgence of interest in building local economies," Klock said. "With the wider financial picture in the United States, we can't really depend on the federal government or outside entities to do that."
An Ithaca Hour is equal to $10 of U.S money. Klock said that the currency strengthens bonds in the community.
"When it comes down to it, it really has nothing to do with money," Klock said. "It's all about relationships and tightening the bonds between people."
Klock said Ithaca Hours are accepted by attorneys, accountants and even a local hospital.
She said the Ithaca Hours program has recently established an electronic transfer system, similar to PayPal, where people can electronically pay for goods and services with the currency.
BerkShares is a regional currency in the Berkshire area of northern Massachusetts that launched in 2006. The program has grown swiftly with $132,000 BerkShares in circulation and about 400 businesses accepting the currency.
"It's meant to get people thinking about where they spend their money and to take pride in the local community," said Alice Maggio, who works with the BerkShares program.
Barry, in Davis, is hoping to see the Davis currency take off, too. On Wednesday, the Davis Food Co-op agreed to accept Davis Dollars, which Barry believes will greatly increase their use. The currency program is run by a nonprofit he founded (and made personal loans to) called the Davis Empowerment and Community Organization, or Davis ECO. He said Davis ECO is now self-sustaining and no longer needs loans.
All of the people who work for Davis ECO are volunteers. It is run by a board of directors and roughly 25 other people volunteer for the group. An unpaid intern designed the money and another intern created the website.
Merchants who use the currency also are listed on the site, which is a form of free advertising, said Barry.
Liza Luchkovska, owner of Pawies Pet Service – a pet sitting and dog walking service – said being a part of Davis Dollars has helped to increase the exposure for her business.
"It's a little bit more local than Craigslist," she said of being listed on the site.
Tree Kilpatrick, who sells produce at the Davis Farmers Market for Good Humus Produce, said his business accepts the money, but few people use it.
"Not a lot of people know about it yet," said Kilpatrick.
Barry said Davis Dollars has recently held craft fairs and plans to hold other events as a way to increase exposure for the currency program.