Bay Bucks Means Business!
Local currency opens new doors for entrepreneurs
by Rachel Trachten • photos by Gabriella Gamboa
Bay Bucks founders Chong Kee Tan and Kendra Shanley convene at the co-working space Impact Hub Oakland.
Berkeley architect Michael Robbins needed a website to launch his new business, but found himself short on cash. At such a time, many businesspeople might apply to a bank for a loan, but instead, Robbins turned to Bay Bucks, a new barter exchange for businesses that lets members give and receive both products and services.
As a newcomer to the exchange, Robbins hadn’t yet earned any Bay Bucks. But the system affords new members some credit, so the architect was able to buy a nifty website from Oakland designer Jay Gregory. In turn, Gregory used the Bay Bucks he earned creating the website to get his taxes done by an accountant who also belongs to the exchange. And while Robbins’ balance remained negative, another exchange member, San Francisco’s Mamá Art Cafe, found itself in need of an architect to help remodel their cafe and gallery space. Cafe owner Paulo Acosta Cabezas was eager to use green building materials and delighted to learn that Robbins specializes in sustainable design.
And so it goes at Bay Bucks, with one transaction flowing into the next. Members don’t trade directly with one another; rather, they offer their goods or services to the exchange at retail price and in return, can take advantage of any other members’ goods or services.
“The thing I love about this,” says Bay Bucks cofounder Chong Kee Tan, “is that when the first piece moves, you have no idea where the second move is.”
Since its launch in December 2012, the exchange has grown to 200 members located throughout the Bay Area. Businesses range from a chocolate maker to a bookkeeper, from a lawyer to a contractor. With Bay Bucks, members can buy bread, wine, tea, and meat; they can receive business coaching, have their refrigerator repaired, or get their groceries delivered. It’s a system based in reciprocity, in which giving and getting are both essential.
Bay Bucks works because many businesses have some form of unused capacity: excess inventory, extra space, or unfilled billable hours. Instead of wasting that capacity, owners can exchange it for something they need, saving cash they’d otherwise spend and building friendships and connections along the way.
“We help businesses become more resilient by reducing their need for cash,” says Tan. Bay Bucks are not a replacement for cash, but a complementary currency that provides something else to rely on. The “bucks” are digital and equivalent to U.S. dollars for ease of accounting and pricing. However, Bay Bucks can’t be exchanged for dollars, keeping the flow of currency 100{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} local.
Iced tea wizards Caroline Sandifer and Trey Jalbert recently launched SolidariTea: Strong Tea for a Strong Community. They plan to share their fruit and spice teas with fellow Bay Bucks businesses and to tap other members for marketing and website help.
Dynamic Duo
Cofounders Tan, who is 51, and Kendra Shanley, 31, are an unlikely pair. He’s an academic, with a PhD in Chinese literature and a background in Chinese economic reform. After losing “tons of money,” in the 2008 financial crisis, Tan decided to build his expertise in alternative economic systems. Shanley is a public health researcher who holds a master’s in parasitology. Her concerns about funding for health care fueled her interest in community currency. She met Tan at a gathering hosted by Transition San Francisco. “We were the only two people who repeatedly showed up for the breakout groups on alternative economies,” says Shanley. “We decided to join forces.”
Their list of businesses has evolved organically. “We recruit around our members,” says Shanley. For example, one member needed dental work; Shanley had a personal connection with a dentist who was willing to join. The two cofounders also spend a considerable chunk of their time “onboarding” new members and brainstorming with them about what they might give and get through the exchange. The system is legal and well understood by the IRS, with members paying taxes on Bay Bucks transactions as if they’re transacting in U.S. dollars.
“In my case, Bay Bucks was a business booster,” says Perrin Clark of Berkeley’s Free Juice. (The juice is free of additives, sugar, and water.) Last year, as Clark was getting Free Juice off the ground, he met Albany Arts Gallery co-owner Miles Williams through the exchange. Over dinner, Williams offered Clark two months of access to a commercial van, a canopy tent, and a table: just what Clark needed to set up shop at the Ecology Center Farmers’ Markets. “As a new business we didn’t have the capital or the credit to get a vehicle,” says Clark. Instead, he paid Williams in Bay Bucks. To give back to the exchange and earn bucks, Clark provides catered juice parties as well as nutritional consults for people interested in a juice cleanse.
Shanley and Tan developed Bay Bucks by weaving together ideas from other complementary currencies and barter systems. In particular, they studied the Swiss Wir, developed in 1934 as an exchange system to help small and mid-sized businesses stay afloat during a global depression in which cash was in short supply. Today, the WIR Bank has over 60,000 members, and the currency is credited with helping to keep the Swiss economy stable and resilient.
Down the road, individuals will be invited to join Bay Bucks, but not until the list of businesses reaches 2,000 members. Why the wait? Bay Bucks is committed to growing its business network first so that once individuals do join, businesses won’t be inundated with currency they can’t spend. In addition, Shanley says, creating a thriving business-to-business supply chain helps to re-localize the economy.
Juicer in Chief Perrin Clark pours samples at Berkeley’s Live Oak Park Fair. Clark says Bay Bucks was a “business booster” for Free Juice.
Earning Bucks with Art
This fall, as Bay Bucks continues building its membership of businesses, the organization is hosting a conference in Oakland. Featured speakers at Living the New Economy on October 23–26 include “degrowth activist” Charles Eisenstein and economist Thomas Greco, Jr., author of The End of Money and the Future of Civilization.
The conference also offers a perfect opportunity for Mamá Art Cafe owner Paulo Acosta Cabezas to square his account. Since he got remodeling help from architect Michael Robbins, Cabezas’ balance of Bay Bucks has remained negative, so he’s looking forward to the art auction at the upcoming conference, where he’ll earn Bay Bucks by providing paintings and photographs for the event. If Cabezas brings his balance back to zero (by spending and earning an equal amount of Bay Bucks during the tax year), he avoids any excess tax liability.
Tan and Shanley are also working on a system for donations, so members could donate extra Bay Bucks to nonprofit members for a tax deduction. But the larger point is a flow of goods and good will. “We have this principle, which is if we can help, we’ll help,” says Tan, “and someone else will come along to help the next step and the next. We want to build this ethos that every member of the community will help each other whenever we can; ultimately, the good karma comes back.”
