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UK LETS and Complementary Currencies
Development Agency

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GUIDELINES for setting up PROJECT FUNDS

The original idea of LETS was member-to-member trading. Constantly accepting new members to replace those who drop out and keeping the numbers stable has worked for some schemes, along the lines of an exclusive "club" model. This counteracts the tendency for members to become "too friendly to trade" and simply start bartering or doing favours for each other, or the tendency for professionals who have built up too many credits saying they can't afford to do more on LETS.

However a more community-minded LETS could develop some features that work differently. First of all they can become more flexible about sterling funding by soliciting donations in exchange for local currency, and holding public trading days with a sterling-free area and a bureau de change where printed vouchers are given in exchange for sterling and used to obtain a percentage in sterling from the traders.

Web-based systems can be set so that inactive accounts become invisible but can be re-activated on request. They can also be set to accommodate a number of different Project Funds, each with a manager. These funds would support any activity that was deemed appropriate, ranging from hospice-visiting to taking children on outings, to doing the catering at community events, to grow vegetables in a community space - participants might then help to sell produce at the market for local currency. Organisers can also ask local theatres or complementary therapy centres to accept a proportion of trade in the local currency so LETS members can increases their spending options. Once these working methods are established, local businesses will be able to assess whether it's worth their while being involved. In this way local currencies become "real", ie based on wealth created independently by activity in the community.

Organisers can outreach to local charities or volunteer projects or respond to requests from them to create project funds. These would supplement volunteering. For example, a charity may be invited to nominate an activity they would like to run but cannot for want of sufficient volunteers, and the LETS organisation would make a decision about whether to support this activity. Such decisions could be made subject to democratic process. Once agreed, local currency is placed into a project fund and members are incentivised into taking part in this project by receiving credits from the fund.

Project Funds can be created initially from the system fund (which receives regular income from each member account, either on a set-fee basis or commission basis). Or they can be created in response to sterling funding, which can be used for expenses on the project, and "matched" by local funding. Subsequently they can receive legacies from individual accounts, or members can make occasional donations, or the system enables members to tithe regularly into projects of their choice.

Engaging with projects in this way enables the LETS group to go beyond member-to-member trading and outreach usefully into the community at large. Group activities in support of such projects are also a way of generating social activity amongst the members, and bringing together people who may then be able to trade with each other on a one-to-one basis. So in this way organisers can "drive" the organisation, whereas before there was little they could do if individual trading began to fade.

MF/mf
Draft as at 27/8/2009 - link to power-point presentation on Integrated Community Currency (Carers)

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