In this guest post, Loretta B. describes a unique way to build social capital and to save money.
Two weeks ago my boyfriend and I enjoyed a rare night out on the town. We dressed up in our best clothes, had dinner at a special restaurant, and headed off to the symphony. This was my first time at a symphony, and we had a fantastic time. Our tickets were worth $75 a piece.
Make no mistake, I am very frugal. In fact, I fall into the “make your own laundry detergent” category of frugality. How on earth could $75 tickets fit into such a person’s budget? I do something called time-banking. 
Some refer to it an alternative currency system, a form of volunteerism, a way to build communities, and an international movement for social change. I think it’s all that and more. I encourage you to watch the introductory video on the national timebank website.
Where did those symphony tickets come from? The symphony is a member of our timebank. Members of the timebank do bulk mailings for the symphony, and the symphony makes tickets available for each performance. The symphony was two hours long. So I spent two time dollars for each ticket. We could have volunteered to be ushers; but the ushers wore uniforms and were not allowed to sit down, a far cry from our romantic date.
What is time-banking?
Time-banking is built around the basic concept of earning and spending hours. Everyone’s skills, whether they are a medical professional or a house painter, are worth one “time dollar” per hour. The hours that you earn are stored in a “timebank” and can then be redeemed for any service of your choice from any member of the timebank. That is the thing that I like the most about time-banking — it is a great equalizer.
My local timebank is called Community Exchange (CE.) I think that is a perfect name, because the people I have met though the timebank have become my friends and neighbors.
How is this different from bartering?
With bartering you need to find two people who each have something that the other wants or needs. You may have to haggle or compromise about the value of your item, or compensate in some way, if the exchange of goods or services is perceived as being unequal. With time-banking, everyone’s skills are equally valuable, and you can make your exchange with anyone you want.
Everyone has a skill — some might surprise you. An elderly shut-in who doesn’t drive can make beautiful wedding cakes. A woman in a wheelchair who needs her house painted used to train police dogs and now provides puppy training. The retired school-teacher who needs her leaves raked has a kiln and is teaching ceramics. A common question when we meet each other is, “What do you do?” “What do you need?” or “What can I do for you?”
I have provided house painting, taught basic computer skills, and helped people job search and post resumes online. It felt great to make such a difference to someone on such a personal level, not an anonymous contribution of money.
I house-sat for a woman who was a certified yoga instructor, and then I spent my first hour — on yoga. I had always wanted to take yoga, but the expense had stopped me. It was a disaster — I promptly fell on my rear! But I had paid with time dollars, so I tried again, and now I love it. Time-banking allows you to do things that you might not normally be able to afford.
Weaving community
There’s a serious side to time-banking, too. The biggest needs are transportation and companionship. That seems so simple — take a bus, join a club! In reality, getting a ride to a medical procedure is more complicated than simply taking a bus, and a daily phone call to check up on the elderly who have no family is extremely important. Time-banking allows the elderly or handicapped to stay in their homes and live independently an average of three years longer than an isolated individual.
There are doctors that participate in our timebank. Other members will provide babysitting in the office lobby while parents are being examined, and these members can in return attend medical workshops and receive certain medical care, (there are some restrictions for legal and liability reasons).
I recently took several months of family leave to take care of my Dad. There were complications. A century ago, family and neighbors would have stepped in and helped. My boyfriend was my emotional rock, but his job was not flexible enough that he was able to help me on a daily basis. So for much of the time I was alone, and I felt like I had no-one to turn to. I found a lovely woman through my local time-bank who does respite care. She came over and stayed with my Dad, allowing me to run necessary errands. And, having gone through this herself, she had lots of useful advice. The hospital’s physical therapist wanted grab bars put in the shower, and a timebank member who provides handyman services installed them for me.
When my Dad died, my yoga teacher from the timebank came and stayed at the house during the funeral. She removed all the medical equipment, restoring the house to normal. Others served food and cleared up at the luncheon after my Dad’s funeral. I cannot tell you the relief I felt having people I could trust take care of that for me, and financially, I would not have been able to afford the luncheon any other way. When people around me complain that they don’t even know their neighbors anymore, I want to tell them — become a good “neighbor” and you will have good “neighbors”!
Time is money
What if going to the symphony isn’t your thing, and what you really want is an Xbox 360? Can you buy one with time dollars? Not in my timebank. But what if you had money in your home repair account to have your house repainted this summer, and instead you spent only time dollars and the cost of paint? Or had your car’s oil changed or your hair cut and paid in time dollars instead of cash? Maybe in an indirect way, you can buy that Xbox with time dollars — with the money you saved!
Read more about time-banking at the official Time Banks web site.
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Sorry, When I said “Peoples willingness to pay, income, and capitalism aren’t based on the need of society, but only peoples willingness to pay.” the first item should be ‘the price of goods’, not ‘Peoples willingness to pay’ . . . Jeez, I must be getting tired from all this common sense today.
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Wow! I came on to post how great of an idea this is but am shocked to see all the negative posts. I think this is a great idea, regardless of the controversy. I wish someone would arrange a time bank in NJ. I’d sign up in a heart beat. It is a great alternative to volunteering, of which there aren’t many opportunities in my area for which I am qualified. Timebanking I could do. If you look at the services people provide it’s really a great way to bring together the community. In this society we are so distant already. If I can help cook or clean for an older person and someone comes to mow my lawn in exchange, thats great! If a hair dresser or masseuse participates, you could treat yourself to free services that you might otherwise chose not to spend cash on. Who is to say that the value of these services are not just equally important to the people who need/want them? Not to mention it is a wonderful way for people who may not get great joy out of work, to use their skills or things they enjoy doing to help others, there for enriching both parties life. So how about it? Anyone up for starting a group in central NJ?
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It DOES seem a wonderful idea. Alas, although Illinois seems to be marked as having a Time Bank, the lack of linkage makes me think that there was one and it disappeared, and they have not been able to update their map as fast as they have done with their links page.
I just wanted to say I found this an enjoyable and informative guest post, and thank the author.
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It was said that communism and socialism are good ideas in theory but poor in execution. Really they are very bad ideas, and it is their practical imperfectness which has saved lives, great art, traditional food, religions and other good things in life.
To Traciatim: Aristotle warned us that republics, in which cultured communities are sovereign and are governed by confederation, can turn into democracies, where the majority, controlled by demagogues, tyrannically oppresses the minority and then themselves. Democratic socialism is such a system. But he also warned that aristocracies, in which nobles, though wealthy, promote culture and have real obligations to those under them, can turn into oligarchies, where the powerful owe nothing, do little anyone will care about in a thousand years and live off of everyone else. That is capitalism. So, both socialism and capitalism are dangerous, and more dangerous as they grow less voluntary and bigger. You should fight them both, not attack one by promoting the other.
The time bank sounds good enough, although I’d rather start an informal “Ledger” than use Timebank USA’s system, and I don’t know if it would promote neighborliness if the bank covered an area bigger than a neighborhood.
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I think Traciatim is the one being attacked in all of this. There was no personal remarks in any of his/her (sorry, ambiguous name!) posts, but there are in other’s responses. This is a common misconception it seems, that someone making a logical argument against something you said is a personal attack to yourself. Traciatim did not attack Loretta, but rather the idea of time banking. And honestly, the system pretty much is the embodiment of Communist ideals. That is not necessarily a bad thing! But you can not really argue the point, because it is true.
Secondly, the private letter did one thing only: It confirmed that the IRS believes that the Time Bank organization is indeed a non-for-profit company and not a barter exchange for tax purposes. It made no mention of whether any tax implications would exist for members, and I have to agree that such exchanges are taxable. This is an exchange of services, no matter how the exchange is tracked or the method of determining what is a fair exchange.
Also, Loretta, I think it is your view of this as more of a volunteer work than as an exchange of services, that is providing the rosy coloring that Traciatim is seeing through. Sure, if everyone in a system like this goes in intending to do work simply on a voluntary basis and never intending to redeem any hours, it will work great. It’s basically a huge volunteer organization, but with more paperwork involved. But, and this is the point Traciatim is making, if you begin introducing members who have no intention of providing quality service, and instead only wish to provide the bare minimum necessary to receive whatever services they desire, the system will rapidly degrade.
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Pay attention to your local public radio station. Whenever our symphony has a guest soloist, the local public radio station has them come into the studio and perform live on the radio. In order to get a “live studio audience,” they open this up to the public who can sit close and meet the soloists afterward for free. Not only that, but as a thank you, every person attending gets 2 free tickets to the symphony, good at any time during the season. Bigger cities may not have this, but it might be worth checking out.
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I did not mention this in my first post, but timebanking is not exclusive to the US. In fact, there are timebanks worldwide. If anyone is inerested in starting a timebank, there is information on how to do this on the national website. Here is another link to online timebanks. This is by no means a complete list. The one in IL is small, maybe new?
http://community.timebanks.org/findtimebanks.php?sid=9eb3ed53672d92d9dc9ebd81e6687ad4
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“… if you begin introducing members who have no intention of providing quality service, and instead only wish to provide the bare minimum necessary to receive whatever services they desire, the system will rapidly degrade.”
Justin, I agree with you, and this does happen. But again, the fact that this is voluntary keeps this in check. It does not take long to discover that someone is taking advantage of the concept. I simply do not help that person again. If this were govermently mandated, I would not be able to say no. The fact that we need to attend orientations and training before membership seems to also help keep those wanting something for nothing away.
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“But again, the fact that this is voluntary keeps this in check. It does not take long to discover that someone is taking advantage of the concept. I simply do not help that person again.”
Loretta, how can you confirm that the time dollar was given to the person for an honest hours good work? Just like real money you can’t really tell if that 10 bucks someone just gave you was given to them at a job, or just stolen from some old lady on the bus?
Are you able to track which dollars were given to which people when they spend them on your services?
P.S. Male . . . I pronounce it tray-key-at-em to keep a hard sound in there.
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Under some peoples assumptions here I would have to report my free flight that I earned with sky miles as taxable income. This is because I have engaged in a “bartering system” with my airline where I fulfill certain requirements and they give me one ticket in return which has a set value that someone else on the flight would have had to pay. I wonder if they have a letter from the IRS specifically stating that I do not have to report this income, I sure hope so.
I would also have to report the 25 cents off I got on that can of soup the other day because I used a coupon which I only receive because I subscribe to a local newspaper. So I guess I have engaged in “bartering system” with the entire soup company where I fulfill a set of obligations by buying a newspaper and in exchange I get 25 cents off my soup. There is definitely a set value in that as well because I get exactly 25 cents for my trade. I hope the soup company has a letter from the IRS as well because I wasn’t going to report that either. I must be a horrible person involved in some kind of communist scheme to evade taxes.
The negative comments have just gotten more and more ridiculous with less and less foundation in anything related to this program and how it really works.
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Nigel, those are not bartering transactions, because the is no exchange of services. How you gained those airline miles and coupons makes all the difference. I’ll take the newspaper and coupon, since it is a simpler example. You paid cash for the newspaper subscription. That is the end of the transaction for you to receive the newspaper. There is no obligation for the newspaper to then provide you with coupons. In fact, the only reason it does so, is because those companies that publish the coupons pay the newspaper to include them. This makes your subscription much cheaper. The airlines miles are similar; you complete some other cash or credit transaction, and at that point the transaction is complete. The fact that you receive airline miles is completely irrelevant to the other transaction.
These are both what I would qualify as ‘reward systems’. They are not bartering; they are incentives for you to complete another transaction. If they would qualify under any sort of taxable category, it would be as gifts.
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Let me start by saying I like what I understand about the time bank idea.
It is a voluntary system. I love freedom, it creates most of what is good in the world. Freedom also lets you sleep late, go to a museum, volunteer in your community, and shovel your neighbors driveway. A free market is only one color in the spectrum that is freedom. A free market can do many things, and I am a big fan, but not everything can be planned for. It is the kindness of people that can pick up the slack.
Full libertarian freedom is hard to come by. Freedom to do anything as long as it is not an attack on others. The USA does not have that level of freedom, but this is not always noticed by those of us that are the USA. Our system enforced by the IRS taxes “income.” There have been many barter exchanges that have been shut down by the IRS. The logic they use to shut them down is the same logic that would make shoveling your neighbors driveway, or helping an old lady cross the street taxable. It is only because the system is run by people and not logic machines that this works at all. Taxation is not freedom, and the system needs its taxation. I believe the strict logic of “26 C.F.R. 1.61-2(d)(1) provides that if services are paid for other than in money, the fair market value of the property or services taken in payment must be included in income.” means the IRS could tax everyones received hours in this system. And, it sounds like time banking organizations maintain good records. Your moral outrage at this idea is justified. As justified an outrage you would feel if your neighbor was taxed after you shoveled their driveway, or your child was taxed because you fed him dinner. The community benefit goals of the organization and participants is something of a political shield. That shield is not however guaranteed. If you donate $50 to NPR, and receive a t-shirt, you are only allowed to deduct your non-compensated portion.
I have two hours a week I am willing to contribute, fixing peoples computers. If there were ten people a week in need of this service, eight of them would go without. A free market is said to be the most efficient allocator of resources. Adjustable pricing would let me raise my fee until only two hours of my service was in demand. This new higher price is a signal to competitors to jump in and offer their services too. Hey, I too might want to offer more hours now that it has become so lucrative. The free market system which means flexible prices has “solved” the shortage problem. The time banking system must rely on a benevolent dictator, or maybe a first come first served method of allocating my hours, or best of all let each volunteer choose those they wish to help. Eight people will go without in this system. The benevolent dictator might advertise the need for computer fixers, but that is not as efficient as a free market profit motive to recruit more help. It is the compulsory aspects of communist systems that are bad and should be avoided, and this system is voluntary. The free market has this system beat as far as efficiency, but first there is no completely free market. Second time banking is as of yet not taxed, and in this sense more free. Third it is run as a charitable organization, which I believe is necessary to pick up the slack left even by a completely free market. My neighbors computer might need repairing, and in a free market the price may have become unaffordable. Through an organization such as time banking, and the volunteer spirit, my neighbor’s computer too can be fixed. Although the free market doesn’t know it, my neighbor could be running a time banking organizations operations on his computer. One hours generosity could end up helping many many people, and that is a good thing.
I hope we get to keep both systems, and I hope the IRS (made of people) leaves time banking alone
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I would like to point out to everyone that in Canada the time banking idea may be tax free as long as the service provided is not something that you regularly provide for income. For instance, a web developer can help someone build a deck, but can’t help someone build a web site and not include that on their income.
Check out this section from the IT490 bulliten found http://www.cra-arc.gc.ca/E/pub/tp/it490/:
In the case of services bartered by a taxpayer for either goods or services, the value of those services must be brought into the taxpayer’s income where they are of the kind generally provided by him in the course of earning income from, or are related to, a business or a profession carried on by him.
So unlike the USA, in Canada it may be legally tax free, you could call the CRA to verify I’m sure . . . contrary to popular belief they are pretty helpful.
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Thanks JD, this was exactly the kind of article I was looking for!
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I just have a few things to add to the conversation.
One is that I don’t see this type of thing as a socialist or communist program. It is a voluntary program for people who want to trade their time for somebody else’s. It is bartering, but in a different fashion than has been seen in the past.
Second, in response to people who are saying there is no consequence for mediocre service. If people were able to review other’s services (think feedback on ebay), people who performed sub-par services would not get the same amount of “business” that somebody who performed stellar service would get. They would then not receive as many time credits and therefore would not receive the same amount of service in return. Thats consequence enough for me.
I believe this is a great idea and is doing a lot of good, especially in small communities. Its people caring about other people more than they care about money. Its people taking care of things that might not be done under normal circumstances.
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Okay, I’ve read everbody’s comments and I agree with a lot of Traciatim’s posts.
In a volunteer community, there is no need to keep track of who does what, because once you start to do so, the profit motive comes into play and it no longer becomes a pure volunteer activity. This is how the Ledger system fell apart (posted way back somewhere in the beginning) when people felt they wanted to help out, just to help out, not to be rewarded by a time dollar or some other metric of keeping track of good deeds. Would Mother Theresa want to know that all her good efforts were worth millions of time dollars? Would she use any of them? I don’t think so.
Since we live in a capitalist society that is becoming more and more disconnected with each other, I think creating a community atmosphere where people can help each other out with their learned skills is warranted.
How you go about helping each other out should be rewarded on a cash basis as all the above posts suggests that different activities are worth different amounts. Yes, you will have situations where you can barter services if there are equal in value, but most often cash or another version of currency would be needed. The benefit of creating such a community is realizing who’s everybody’s skills and needs are.
This system falls apart too when there aren’t enough volunteers, too much demand for certain services and not enough needs that do not require specialized skills.
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Great post, thanks for sharing.
I’d probably agree that it would be hard for this system to work on a large scale but who cares? If it works for a group of 5 or 50 and people are in it for the right reasons, why knock it?
This system is under the assumption that people are generally good and if you don’t think you can fit into the system for fear of thinking someone else is gaming the system or you possibly wanting to game the system, find another way to share or volunteer your time that works for you.
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One problem with Loretta’s time bank exchange that no one pointed out is that a ticket for a 2-hour symphony concert shouldn’t be equivalent to 2 hours of work.
Loretta’s 2 hours of work constitutes 2 man-hours. The 2 hour symphony concert is probably several hundred man-hours (ushers, building staff, symphony members including rehearsal time, etc.), but then it is also divided by the number of attendees (or potential attendees, depending on how you want to figure it). This may make a ticket worth substantially more or less than 2 hours.
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I think we should give Traciatim a few time hours for all the time and effort he put into his postings here. Because he seems to believe his time and effort is worth more than most slags in the general population, we ought to double it. However, all the time wasted reading his posts must add up to 20+ hours collectively. That puts Traciatim at a time debt of at least 14 hours…
So I suggest Traciatim go out there and work off his debt by getting out there and helping some people out. It seems he is good at shoveling (snow and other things), so I suggest a few hours of shoveling for starters.
Oh and we should all make sure he claims these transactions on his tax return. It should be filed under “too much common sense”.
P.S. Looking to build a time banking network in LA. Maybe we can get Traciatim to work off some of his debt by helping us put toghether a website.
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I still don’t understand why all the attacking. Why do you have to set up a communist governing body just to help people?
Why not do a ‘free cycle’ style help page where people can post looking for help with projects and other people just help them.
Then at least you aren’t reducing everyones time value to an equal amount no matter the job and issuing currency in the form of time billed just to evade taxes.
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[...] An Introduction to Time Banking – This is a really interesting concept – you give of your time and in exchange for the time given, you can cash in the time dollars (hours) for things you need. The author points out numerous ways she’s cashed in… [...]
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For Pete’s sake, why is it so hard for the naysayers to understand? They are not exchanging ‘professional’ or any other services, they are exchanging the time it takes to do them, period. Thus the value cannot be assessed as anything other than time.
I’ve been a member of a timebank for three plus years. I’m on the board (we’re a licensed non-profit, but you don’t have to be). Many of the exchanges amount to things that would never be paid for.
A woman had an old cat that could not jump up to his favorite spot on the mantle anymore. Someone with carpentry skills made some simple steps (small wood blocks) and attached them the wall – voila, the cat can get up there without jumping.
We also have local non-profits as members. The senior center will provide space for a meeting and earn time dollars they can use for someone to come in a give a talk, or a class.
We have businesses that CHOOSE to be members.
That’s it for now.
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how do i get started?
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Great article! We’ve developed a new time banking website called Omnui.com
The idea was to develop something that is easy to use and can be used via mobile phones as well.
It was launched just 2 days ago, so very new and we’re looking for feedback.
Kind regards,
Carlin
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