This Artikel was first published on www.community-currency.info, the knowledge-center of the CCIA project (2012-2015). A archived version of the original article can be found here.
Timebanking is a community currency concept in which time, typically hours, are used as unit of account. Services provided for in the context of time banking are valued according to the time it takes to deliver them, regardless of who does it or what the “market value” is.
A Time Bank is typically are community-run organizations that, according to Gill Seyfang turns unpaid time into a valuable commodity, and aims to build social capital and promote community self-help through mutual volunteering (both giving and receiving help in exchange for time credits). Across the world, many different organizational models and have been developed to run time banks. The differences are often significant but overlooked in comparison to the idiosyncratic nature of timebanking itself.
The idea of Time Banking was described and popularized by Edgar S. Cahn in 1986. He applied the principle and the so called Time Dollars to social projects (education, healthcare, youth justice) in Washington D.C. He later expanded his projects to include Florida and Chicago. Cahn’s objective was to address the inadequacy of the government’s ability to provide sufficient social services and to deal with social problems existing in Washington D.C. . Consequently the idea rapidly spread across the US and from the 1990s, when the New Economics Foundation had invited him to speak at the TOEF conference in London, through the UK.
Often compared to other volunteering facilities, volunteers in a Time Bank are deliberately rewarded for their contribution with time credits for which they can in turn receive ‘voluntary’ benefits themselves. “One hour of everyone’s time is worth one time credit”, no matter the task. Social services accomplished through Time Banking may include education, babysitting, healthcare, computer tuition and gardening. Time Banks can attract socially excluded groups of people (e.g. unemployed, poor, retired, elderly and disabled), volunteers, and those dependent upon receiving services (e.g. elderly and disabled). This is accomplished building upon and referring to the core values of timebanking:
Five Core Values
- Asset: We are all assets and we all have something to give.
- Redefining Work: Some work is beyond price but needs to be honored.
- Reciprocity: Helping works better as a two-way street.
- Social Networks: We need each other, to reweave communities of support, strength & trust.
- Respect: Every human being matters.
Time Banking seeks to strengthen social cohesion and encourage a more human approach to interactions and exchanges. Despite some similarities with LETS currencies in terms of being typically run as non-for-profit initiatives and involving individuals as providers of goods and services, time banks have their focus outside of what is commonly seen as the economic sphere. The absence of a pricing mechanism in timebanking (one hour of service is always valued at just one hour) further illustrates this. Time Banks are thus designed in a complementary fashion to fill the gaps of social services (rather than goods) that the conventional economy cannot deliver.
In the understandings of Seyfang, the objectives of Time Banks are:
- to engage members of the population who are socially excluded and would not normally be involved with community volunteering initiatives;
- to enable them to meet their needs through exchanging time, earning and spending time credits, including boosting skills, self-esteem and confidence of participants;
- to build social capital and foster friendships, reciprocity and trust through participative engagement;
- to encourage community involvement, by valuing and rewarding the (normally unpaid) social work which is essential for healthy, sustainable communities.
Time banking is fundamentally anchored in the concept of co-production. Cahn defined co-production as a new way of thinking about society based on respect. Co-production values people as assets, recognises unpaid work and builds social capital through reciprocity. Timebanking lies at the heart of co-production, and is a key mechanism for changing relationships in a way that is integral to co-production.
Timebanking in Practice
The idea of using time as a unit of exchange can be traced soon after the Industrial Revolution. Time based currencies originate from the American anarchist Josiah Warren and British industrialist and philanthropist Robert Owen. While the American launched the Cincinnati Time Store in the late 1820s, the British founded the New Harmony community in 1824.
New Harmony was created to provide equality for all its inhabitants. Each citizen had to take responsibility to the labour force of the community. To make people contributing, Owen launched a time-denominated currency. The New Harmony time currency was worth the amount of time that a worker had labored, and could be exchanged for commodities worth the equivalent amount of labour.
There are several relevant examples of timebanking systems running around the world. Many of these evolved from the original concept to adapt to local conditions and to reflect the needs of communities. This section offers a series of examples including Fureai Kippu in Japan, TimeBanks USA, the St.Louis timebank, the Time Credits schemes developed by Spice in the UK, Talente Tauschkreis Voralberg in Austria, SEL (Système d’Echange Local) in France and finally the Tauschringe in Germany.
The Fureai Kippu (the caring relationships ticket) is an important example of timebanking. Fureai Kippu is a generic label for a series of systems designed to address the needs of care provision for a growing ageing population. A version of Fureai Kippu involves a classic reciprocal exchange system based on time currency focused on person-to-person activity, similar to Edgar Cahn’s time banking system. In this scheme, volunteers receive time currency for providing care to anyone in the system in need of it. Different tasks have different rewards, with some tasks being valued at more than one time currency per hour of work. The Fureai Kippu has been operating in Japan since the 1990s.
One of the pioneering organisations in co-production is the St. Louis Timebank, in operations since 1981 as a neighbourhood based time dollar exchange. The Member Organized Resource Exchange (MORE) program has become its most vital way of engaging neighbors in reciprocal help. MORE uses a time-dollar system of barter exchange, where members can offer services to each other. What is key is that hours of service not only help their neighbors, but translate into dollars too. People can use the time dollars to exchange services with neighbours, purchase services at the Grace Hill Neighborhood Health Centers and even purchase household items at MORE stores. It was reported that MORE helps increasing members’ self-confidence as they see the value of their work converted into assets.
TimeBanks USA is a non-profit organisation founded in 1995 to promote Timebanking (originally known in the USA as Time Dollars). It is the umbrella for all local, regional and national timebanking schemes in the USA. Time Banking ideator, Edgar Cahn, was one of the founders of the organisation.
An evolution to the overall notion of timebanking came with Spice Innovations Ltd. (Now called Tempo). This organisation put forward the concept of Time Credits as tools used to encourage local involvement for social purposes. Time Credits transform the way the public and voluntary sector agencies engage with communities by mobilising individuals and social networks as the core agents of change. The main difference between ordinary timebanking and Time Credits in the understandings of Spice is the fact that the latter is a hour-denominated system provided by agencies (e.g. community associations, housing corporations, local government) to individuals who contribute in the community – and thus not just person to person exchanges. People can correspondingly use Time Credits to access events, training and leisure services, as well as trade Time Credits with neighbours. The evidence shows that Spice Time Credits result in engagement of the many rather than the few, and more cooperative public and community services [Reference needed].
Other relevant cases of timebanking emerge from the Talente Tauschkreis Voralberg in Austria, the SEL (Système d’Echange Local) movement in France and the Tauschringe schemes in Germany. Talente Tauschkreis is a complex time bank scheme running with a mutual credit time-backed currency that circulates alongside a regional currency backed by euros. SEL is a timebanking system that enables people to earn ‘exchange units’ based on time. These can in turn be exchanged for goods or services within a closed group of voluntary people. Tauschringe, literally meaning ‘exchange ring’ is a system where people use time currencies to trade both goods and services. It should be noted that not all Tauschringe systems operate on an hour-by-hour model. Those which do not are to be considered as a version of LETS.
Volunteers have reported increased social engagement, recognition, self-esteem and social inclusion as well as forming new and deeper friendships . By valuing social services and their providers, which the conventional system assigns no monetary value to, a substantial improvement in community cohesion is achieved.
A major problem faced by most time banks relates to the lack of demand. People seem to be generally hesitant to ask for help. Because of this, the availability of services to be exchanged, is often limited 17. Moreover, a large segment of the targeted participants (e.g. elderly and disabled) are often unable to repay their incurred debt. Nevertheless, the fact time banks have experienced dwindling transactions over time might be a sign their success. Timebanking has proven its effectiveness for establishing solid social connections. It might be the case, therefore, that members continue to help each other outside the realm of timebanking.
Research on the social impacts of joining a time bank illustrate there are both social and physical advantages to membership. For instance, “members have had help with issues such as dealing with unmanageable gardens, provision of childcare and lifts to local shops”. On the social side, being an active member has proven to be effective to ‘reduce social isolation, increase local networks and enable to feel part of a local community’.
Although there is little comprehensive, reliable and up to date information, due to the diversity of time banking initiatives, research carried out in 2000 there were 300 Time Banks worldwide. Currently, the network of TimeBanks USA shows a similar number of timebanks to be running on their software alone. In 2002 in the IJCCR saying that the UK had approximately 29 active Time Banks. Time Banking UK currently reports working with 290 time banks. By January 2014, Spice was working with 521 organisations who were using Time Credits. Japan has witnessed an explosion of Time Bank initiatives since the second half of the 1990’s. It is estimated that by May 2003, Japan alone had 372 Fureai Kippu and similar schemes.
Although the impressive rise of Time Banks around the world, the average number of participants in a Time Bank seldom exceeds a few hundred active members. Spice’s model of Time Credits has an average of 500 – 1500 members. The amount of transactions vary from project to project. At present there have been no global survey on Time Banks, thus it is difficult to estimate the amount of transactions taking place and their frequency.
- Function and Unit of Account
The primary function of Time Banking is to facilitate exchange of services. There is neither interest nor demurrage. The units of account with Time Banking are typically ‘hours’ or fractions thereof.
One of the other defining factors in time banking is that any contribution is valued equally by the time it takes to deliver it, often paraphrased by saying “an hour equals an hour”. This in effect means timebanking does not have a market pricing mechanism, it only measures and compares services.
A few timebanks allow good (mostly donated second-hand items) to be acquired for time credits. A common practice in assigning a time value to these items is to estimate how long it took to organize the sale and delivery. In this regard the “Hour” currencies, most prominently the Ithaca Hours in up-state New York, USA, are fundamentally different from timebanking as they are only denominated in time on paper notes ranging from 1/8 Hour to 2 Hours. But the price and of goods and services is negotiable, taking an average hourly wage (e.g. 10US$/hour) as an informal anchor.
Typically Time credits are created when two people make a transaction; one person provides a service, the other person acknowledging that by their payment. All participants in a Time Bank start with an account balance of zero. When a service gets paid, the account of the provider of the service gets credited with the corresponding amount of hours directly from the account of the recipient of the service. . No central issuance entity (e.g. a bank) is involved in this transaction or the issuance of the credit. Thus this mechanism is referred to as mutual credit. In effect this means that all balances of accounts in such a system always add up to zero. When having a negative balance, it is assumed that this participant feels obliged to deliver services to anyone else in the Time Bank community. The ones having ‘earned’ time credits can in turn spend them by getting help from others or save them for future use. It is also possible to donate hours to someone else.
Since there are typically no formal contracts in place enforcing this rebalancing of time credits, they are not strictly backed by any good or service. Trust in the value of earned credits, is reportedly not the motivation for people to contribute. Time credits cannot be redeemed for conventional money.
In this sense, Time Banking as mutual credit is essentially the running of a bookkeeping system, just as Barter or LETS. Nowadays, the majority of transactions take place electronically.
The innovation brought by Spice to the original timebanking thinking is the fact that Time Credits are not exclusively a matter of reciprocal exchange between individuals but set within a wider setting that includes agencies like community associations and local government. In this case, Time Credits act as rewards from agency to individuals who contribute time to the good of the community. Examples of such schemes are the West Norfolk Time Credits and the Lancashire Time Credits.
The Makkie is a combination of both original timebanking and Time Credit schemes. The system rewards local residents who volunteer in neighborhood associations or help cleaning public space with time denominated currency equivalent to the amount of time contributed. At the same time Makkie scheme enables individuals to exchange the currency with each other for reciprocal help.
In most countries time banking is excluded from tax considerations, up to a certain amount, since services are mostly of an informal and non-professional nature.
Since some timebanks act as intermediaries for volunteering indemnity and accident insurance are another important issue.
Some timebanks conduct background checks before registering new members, since much of their target membership are from vulnerable groups like elderly, handicapped our children and a fully registered member can typically freely contact other members.
How it works
When participants register at a local Time Bank, they submit to the central register (today mostly an online database) the types of services they are willing to offer and correspondingly the help they seek. These offers and wants directories can then be searched, members can contact other members to ask for help and record the delivered services through the online accounts. Typical services exchanged in a Time Bank include child care, elderly care, language lessons, home repair, gardening, companionship, computer tuition, help with shopping etc. In most of the prolific timebanks a broker, matchmaker or community worker will help members to find services they can get through the timebank or find ways in which to earn timecredits. After a service is performed, time credits are transferred from the account of the receiver of the service to the account of the provider. In some timebanks this happens through cheques which get compiled in a central account, but mostly accounts are kept electronically and users can transact freely. For members with difficulties in operating computers, “online-buddies” or stewards are put in place to help.