by Hannah Van Sickle

GREAT BARRINGTON — In the Berkshires, local currency is nothing new. When the late Frank Tortoriello wanted to move his burgeoning Great Barrington sandwich shop to a new downtown location, but couldn’t secure a bank loan, he issued “Deli Dollars.” Consumers paid $8 up front and, once The Deli successfully relocated, the store-specific currency was suddenly worth $10 toward morning bagels and coffee or a Zonker Harris for lunch.

Berkshire Farm Preserve and Monterey General Store notes soon followed — all inspired by the Share Program, a loan collateralization program of the 1980s aimed at helping small startups and entrepreneurs gain access to capital at a time when traditional financing institutions were not taking that risk. Each of these merchants engaged their customers in thinking about how they could support local businesses in what quickly became a mutually beneficial opportunity to look at monetary issue in the region.

Fast forward to 2006, when BerkShares — a currency local to the Berkshires — debuted in late September. The BerkShares Program, and BerkShares, Inc., were initiated by the Schumacher Center for a New Economics, “a ‘think and do tank’ looking to pilot programs other areas can replicate in their own communities,” Rachel Moriarty, BerkShares program administrator, told The Edge in a recent interview.

Prior to the launch of BerkShares, the Southern Berkshire Chamber of Commerce had issued what were also called BerkShares, creating a cohesive way for merchants across town to participate in a streamlined consumer loyalty program. Issued over the summer, following the height of tourist season, they were redeemable (ostensibly by local consumers) at participating businesses.

“What was interesting about that [model], and [what] paved the way for the current BerkShares program, is that people were able to see the circulation of the notes,” Moriarty said, explaining if they were issued at Barrington Outfitters, then redeemed at Jack’s Country Squire, “[one] could see the velocity, and that excited people about the possibility of a full-time [local] currency.” Suffice it to say, by the time BerkShares launched in its current form, “[the currency] was thoroughly vetted by the merchants, consumers, and banking partners who helped to hold the BerkShares in their vault and make them available for exchange,” according to Moriarty.

The enduring success of BerkShares has revealed much about the economic viability of the region — namely, ownership over local economic activity. In its current form (BerkShares is a physical, paper currency), the flow is not immediately evident. That said, Moriarty knows, anecdotally, “that over $10 million BerkShares have gone into the local economy and circulated among the 400 participating merchants” since their inception, citing a figure that reveals “a fraction of the Berkshire economy, [but] shows an intention behind purchasing.”
Beyond everyday use, BerkShares are a point of pride for many residents, who carry the paper notes while traveling to brag about the region’s local currency. “[They provide] a human face to economic activity,” Moriarty said, pointing to the physical notes emblazoned with local heroes (from a Stockbridge Mohican and W.E.B. Du Bois to Robyn Van En, Herman Melville and Norman Rockwell) and artwork by local artists (including Joan Griswold, Michael McCurdy and Warner Friedman).

Nostalgia aside, consumer habits are changing. Over the ensuing 15 years, one thing has become evident: in an increasingly online world rife with credit and debit cards, PayPal and Venmo, it’s often hard to see where cold hard cash fits into the equation. Paper currency, it seems, is no longer terribly current, which means the opportunity to take BerkShares in a different direction, what Moriarty calls “a more accessible direction with a digital form,” has arrived.

Last year, Humanity Cash founder and CEO Fennie Wang approached the Schumacher Center to explore their interest in taking BerkShares digital. Serendipitous timing during the pandemic — when the fear of touching paper currency accelerated an already growing trend toward digital payment platforms — resulted in a pilot program between BerkShares and Humanity Cash. Digital BerkShares strives to provide the convenience and cost savings of digital, while maintaining the romance of cash. The end result promises to be mutually beneficial for consumers and merchants alike.

“We will not be running over a card network, so there won’t be the same kind of transaction fees,” Wang said, pointing to traditional card fees of 2-3 percent from each transaction, which for small businesses with slim margins, makes economic viability even more tight. The shift to digital was made in conjunction with feedback culled from current users, and current merchants, of BerkShares. Wang likened the outcome of digital cash to “the convenience, security, and electronic form [of a card] without the added cost normally associated with running those types of transactions.”

For Wang, the digital platform is alluring for many reasons: it creates a prime opportunity to work with local banks (who will continue to hold the underlying cash reserves); it is easier to participate (one need not visit a physical bank branch); and there will be 1:1 parity between digital BerkShares and USD (a shift that will inevitably make it easier for businesses to do accounting). Users will link up through an app to facilitate exchange (like Venmo, minus the $.10 + 1.9 percent per transaction fee associated for merchants). The hope is that convenience will be fruitful in getting the community to adapt to digital BerkShares.

To further incentivize the shift, BerkShares Inc. is giving away 60,000 fully-funded BerkShares to people in the community who sign up for the app, “so that they can try it out, use it, and [put their money] toward local businesses,” said Wang (with 10% of the incentive shares earmarked for the local farm and food industry). This move, in particular, encourages business-to-business transfers and creates local economy links among food retailers, restaurants, farmers markets, farmers, and consumers according to Wang, who wants “to see if we can make all those processes easier for both the business and the consumer.”

“This is essentially a pilot,” said Moriarty, who hopes the new format encourages increased participation in the program. Paper BerkShares will remain viable until data is available about how well the digital format takes root in the community.“It’s a super simple design to facilitate [use]” added Wang, both underscoring the same truth: it is always free to accept BerkShares, whether digital or paper, and it’s always free to reuse them. Only when a merchant needs to exit the BerkShares economy, and cash out to USD, is there a 1.5 percent fee — paid to the bank — to move the money around.

Beyond convenience, Wang sees the digital application opening the door to building “other features that encourage this community aspect of a community currency.” She and Moriarty envision merchant-specific incentives, and the popular “round up” feature where, when paying with BerkShares, the surplus is donated to a Monopoly-esque “Community Chest” as a form of cash assistance for those in the community who need it.

“The [digital BerkShares] app becomes the hub for all things local” said Wang, from morning coffee to gym memberships, all of which support local businesses.

NOTE: Look for more information about the digital rollout, currently targeted for December, just in time to put extra cash toward local businesses during the winter holidays; additional features will be rolled out in the new year.