Time is Money

Time is Money:
Time Dollars and the Money is Value Metaphor
by Esther Cervantes

Increased interest in "time dollar" programs raises debate over whether such currencies are money and are a detriment to volunteerism. But time dollars may play a key role in overcoming one of the major obstacles that the field of volunteerism faces. By assigning an explicit and equitable value to non-work tasks, time dollars can potentially lead us back to behaving as though we truly value community.

A "time dollar" program begins when a local community establishes a service exchange network and issues a local currency to facilitate the exchanges. The currency is usually based on time, so that one hour of any kind of service is equal to one hour of any other kind of service. Introduced by Edgar Cahn in 1980, time dollar and similar programs now exist throughout the United States and in some other countries, including the United Kingdom and China. [1]

The Time Dollar Institute, which functions as a support and education agency for the majority of time dollar communities, identifies time dollars as a medium of exchange that allows people to "step outside the monetary pricing system in order to value the things we really value." [2] The IRS has ruled locally within the United States that time dollar income is not money and is therefore not taxable, since its value is measured in time rather than money and is backed only by a moral obligation. [3] While this is good news for individual holders of time dollars, it may be that to deny that time dollars are money is to diminish their potential power for social change.

"Medium of exchange" is a popular synonym for "money," but economists generally assign several purposes to money. The four most common are: medium of exchange; means of payment; means of storing wealth; and standard of value. A currency that can be used for all of these purposes can be called a "general-purpose money." [4] Nothing rules out the existence of a special-purpose money, and such monies have indeed existed. For example, before their encounter with European colonizers, the Tiv of Nigeria had a special-purpose money in the form of brass rods that could only be used for certain types of transactions. [5] Time dollars are, in a similar manner, a special-purpose money.

Time dollars do function as a medium of exchange, facilitating the transfer of disparate services between members of a time dollar program and removing any need for directly reciprocal exchanges. [6] However, time dollars are limited in this function by the fact that they may be used to pay only for the goods and services provided by the limited pool who accept time dollars in exchange. The general-purpose monies of the industrialized economies, with perhaps the exception of the Russian ruble, are much more broadly accepted.

Payment is defined as "the discharge of obligations in which quantifiable objects change hands." [7] When time dollars are used to repay a time dollar loan, to make restitutions in a teen court, or to pay fees at a participating credit union, they are used as a means of payment, [8] with the same limit as that seen in the use of time dollars as a medium of exchange. Despite this comparative limitation, time dollars are in some ways a richer means of payment than ordinary dollars. Time dollars carry, ideally, a social value that dollars do not. A person receiving a time dollar knows that the time dollar was previously earned through service to the community. The same cannot be said with such certainty of an ordinary dollar. [9]

Time dollars also serve the purpose of storing wealth, but in a somewhat different way than general-purpose dollars serve it. In the use of time dollars, reciprocity within the community is assumed. This social reciprocity, and the knowledge that one can always earn another time dollar through another hour of any service one can provide, lead people to treat their time dollars differently from their cash dollars. A Brooklyn time dollar program participant reports, "For me, the credits mean nothing at all. It's my pleasure, my enjoyment, if I can help somebody in need." [10] Time dollars are given away, donated, granted, and used to make interest-free loans much more freely than ordinary dollars. For time dollar program members, the wealth represented by their currency is the wealth of the community far more than it is their individual wealth.

The Time Dollar Institute takes as its first core value the concept that each person has assets and skills that are valuable. [11] One of the basic goals of time dollar programs is to create formal value for those assets, and to create space for their use. It is not surprising, then, that time dollars function primarily as symbols of a standard of value. In the typical time dollar program, one hour of service - any kind of service - earns one time dollar. Time is the standard of value, and the physical objects that are the time dollars themselves represent increments of that standard of value.

By analyzing time dollars in terms of the commonly accepted purposes of money, it can be seen that time dollars are indeed money, despite the rulings of the IRS to the contrary. Time dollars should be considered a special-purpose money that is primarily a standard of value, but that also serves the purposes of storing wealth, facilitating exchange, and making payment, the latter two within organizational and geographic limits. It should also be recognized that time dollars store wealth and function as a means of payment in ways that are subtly different from those seen with most general-purpose monies. Time dollar wealth tends to be seen as residing in the community, regardless of who holds the physical time dollars, and discharge of obligation through time dollars carries the extra certainty that the means of payment is linked to a service that benefits the community.

People in the United States live by the metaphor that money is value. We ask people about their "net worth," as though a dollar figure could thoroughly represent their relationships, their beliefs, their skill at their hobbies, their volunteerism, and other unpaid intangibles, as well as the balance of what they earn and what they spend. We know that this is not literally true, but money is so readily accepted as representing the whole of value in our market economy that it is sometimes difficult to think of value outside of money.

This is an issue with which volunteer programs struggle on a daily basis. Good volunteer management practice indicates that volunteer programs should be evaluated holistically, with special attention to qualitative impacts on individuals. However, many volunteer managers find that unless they emphasize the quantitative - especially how much money the volunteer hours are worth - their boards or donors may undervalue the volunteer program, and funding may be difficult to come by. [12]

There is the risk that, by quantifying community service in terms of a special-purpose money, time dollars contribute to "the methodical destruction of community" accomplished by "our present efforts to monetize all value and reduce life to the tyranny of measurement." [13] However, if we do not place a monetary value on valuables such as community service or volunteerism, we run the equally real risk that others will assume that we do not value them at all. Time dollars, rather than allowing people to step outside of the money is value metaphor, allow them to live more fully within it, potentially granting them more power over the metaphor. [14]

The NigerianTiv, in addition to using special-purpose money, lived in a multi-centric economy that had three distinct spheres of exchange. Subsistence goods, such as food, agricultural tools, and household wares were exchanged by barter. They could not be traded for religious goods and services, which were exchanged during ceremonies, with brass rods sometimes acting as a special-purpose money. The third sphere comprised a market for dependents, especially wives, who were exchanged by a thoroughly separate method. The separation between the Tiv spheres of exchange was a manifestation of the different moral values they placed on items in the different spheres. Subsistence goods had the lowest moral value, while wives had the highest. [15]

The idea of a multi-centric economy based on moral values may at first seem quite foreign from the US perspective. However, the Time Dollar Institute recognizes a second center in the "core economy," or the set of traditionally non-monetized interactions that occur between friends, family, and neighbors. Values beyond money - such as love, duty, caring, and spirituality - are regularly applied to the core economy, further separating it from the predominant center based on markets that operate only in terms of general-purpose money. [16]

The use of time dollars is a formalization of the core economy within the money is value metaphor. It helps to highlight exchanges within our lives that are usually downplayed by this metaphor. By doing so, time dollars help ensure that these exchanges are not ignored and therefore undervalued.

Although it denies that time dollars monetize community engagement, the Time Dollar Institute does recognize this potential power within the concept of time dollars. [17] It is reflected in the Institute's long-term goals, many of which address widespread and profound social change:

In addition to monetizing and thereby highlighting the core economy, The Time Dollar Institute also seeks to fulfill its goals by encouraging co-production and by redefining work. [19]

The Time Dollar Institute asserts that volunteering comes from two disparate traditions: the cooperative tradition of barn raising, and the tradition of charity. Charity, while coming from the right motivations, according to the Time Dollar Institute, can create dependence relationships and cause the recipient to believe that he or she has nothing of value. Recipients of charity risk becoming perpetual recipients. [20]

Time dollars seek to avoid this by creating reciprocity in social service relationships, making them more like barn raising and less like charity. This is the essence of co-production, or the contribution of effort necessary from the consumer of a social service in order for the service to have an impact. "Without co-production," The Time Dollar Institute writes, "nothing that professionals, organizations, or programs do can succeed." [21]

The Institute does not claim that time dollars are the only way to achieve co-production. It recognizes that traditional volunteer programs, neighborhood associations, social movements, employee ownership, targeted professional practices, and peer counseling and support programs can all generate co-production, as well. [22]

As a consequence of living within the money is value metaphor, we sell part of our time to employers in order to earn general-purpose money with which we can obtain goods and services that we need and want. The money is value metaphor is so strong, however, that not to value the rest of our time in a similar manner potentially devalues it in that context. [23]

Childrearing, making friendly phone calls to neighbors, offering transportation, cleaning houses and tending lawns and gardens for others, and sharing home-cooked meals can all contribute to community well-being, as well as the well-being of the individuals who engage in the interaction. However, these and similar activities are generally not paid as work, and when they are, they tend not to be paid well. If a person's range of skills falls exclusively or primarily within the services classed as non-work, then that person's ability to obtain general-purpose money is seriously limited. The Time Dollar Institute believes, however, that "the reward for contribution ought, at least, to be adequate sustenance." [24]

To that end, the Time Dollar Institute seeks to cause social change and achieve its long-term goals by redefining work, in addition to highlighting the core economy and encouraging co-production. By monetizing, and therefore valuing explicitly, all forms of social contribution, the use of time dollars "takes us beyond our present fixation on permitting work, as defined by the market economy and general-purpose money, to define who is morally worthy to share in the abundance we have the capacity to produce." [25] Time dollars, in addition to contributing to this change of paradigm, provide an alternate means by which people, whether constrained in their ability to earn general-purpose money or not, can obtain some of the goods and services that they need and want.

Although time dollar programs are fundamentally based on the exchange of services between individuals within a community, they are not limited to such exchanges. In some locations, businesses accept time dollars as complete or partial exchange for goods and services. Some programs provide time dollar grants or, more in the spirit of reciprocity, interest-free time dollar loans. The borrowed time dollars can be used to obtain necessary goods and services, and the loan is paid off through similar community service. [26]

The Time Dollar Institute is also helping some time dollar programs integrate with the community service option for fulfilling the 20 hour per week work requirement for receiving American federal welfare funds. The Institute would also like to manage a two-tier mortgage system similar to that used by Habitat for Humanity, in which a person can forgo down payment and interest on a home by working 500 hours to help build homes for others (often referred to as "sweat equity"). The Time Dollar Institute also sees a potential match between the need for informal networks to support hospital discharge planning and the value that time dollar programs place on friendly calling. The possibilities, according to the Time Dollar Institute, are nearly endless. [27]

The Time Dollar Institute website gives the reader a thorough and plausible vision of the potential for good that exists in the time dollar concept. However, there are also potential risks associated with the use of time dollars.

Whether or not some types of work that receive material reward should be considered volunteering is still under debate. [28] The Time Dollar Institute contends that volunteering has little to with material reward or the lack thereof, but that "the word volunteer actually refers to something that comes from the heart." [29]

This paper will not attempt to resolve the broadest questions that persist in the study of volunteerism. However, it may be informative to explore whether participants in time dollar programs truly do work "from the heart" in the presence of special-purpose money remuneration.

The website for the Neighborhood Service Exchange (NSE) in Stillwater, Minnesota, offers comments from its participants. [30] In writing about their exchanges, NSE members tend to focus on the giving aspect:

In addition, some NSE members have observed that giving tends to be the easy part of their membership. When it comes to calling in the value represented by their time dollars, there is sometimes hesitation. "It was so easy to make the call offering a ride to someone to do their grocery shopping. It was so hard to make the call asking for help with some of my housecleaning."

The most revealing comments, however, are those in which Neighborhood Service Exchange members self-identify as volunteers:

Of course, the testimonials of a single time dollar program provide only the scantest anecdotal evidence of how time dollar monetization affects participants' attitudes. This question warrants further study. It does seem, though, that time dollar program participants identify themselves as volunteers in spirit.

It should also be informative to ask how the monetization of community service by time dollars affects social capital - the well-being of the community. If "community is composed of that which we don't attempt to measure, for which we keep no record and ask no recompense," and "the essence of community, its very heart and soul, is the non-monetary exchange of value," [31] then time dollars should be expected to have an adverse effect on social capital. Upon inspection, however, the issue reveals itself to be much more complex than that.

Cathy Dyball coordinates the Neighborhood Service Exchange. She reports that 90% of applicants to NSE, when asked why they wish to join, answer, "to get more involved in my community and meet new people." [32] Interactions and relationships are the threads that weave social fabric, and this data bodes well for the effect of time dollar programs on the well-being of a community. The comments of NSE's active members support this conclusion. [33]

One NSE member sees participation as a way to redefine a "world that is so individualized, we hardly know our neighbors anymore." In the comments of NSE members, there are many references to meeting new people:

These appear not to be only superficial acquaintances, either. An NSE participant asserts that "the lessons we learn are those of a true respect for the goodness in each person."

There is also a keen interest in the concepts of community and community well-being among Neighborhood Service Exchange members. One member writes, "NSE members have all brought their special skills, care, and concern for others and a desire to make the community their own." Others express their own perspectives on community:

At the very least, the members of this limited sample of time dollar program participants believe that what they do has a positive effect on their community. However, since most time dollar programs are to some extent membership programs, there is an element of exclusion that balances their inclusion. The subject of how time dollar programs interact with their broader communities and affect social capital beyond the scope of their membership merits further investigation. For now, though, evidence suggests that, through the explicit valuation of individuals' assets and as a catalyst for social change, time dollars are in fact an empowering agent for the formation of social capital, at least within the membership of a time dollar program.

Time dollars exemplify two of the core questions in the study of volunteerism: whether certain circumstances of remunerated work can be labeled volunteering, and what causes a volunteer to volunteer. Further research into the motivations of time dollar program participants seems justified. In addition, it seems that time dollar programs do build social capital, despite monetizing interactions that are usually not monetized. It remains to be seen, though, if that social capital is built only within the membership of the program, or if it spills over to the community at large.

However, the most important lesson that time dollar programs bring to traditional volunteer programs, and the voluntary sector in general, lies in the Time Dollar Institute's intent to redefine work. The work of all volunteers tends to be undervalued, and this may be precisely because it has not been monetized. Volunteering even carries certain social stigmas because of the discrepancy between its lack of pay and the heavy emphasis that our society places on that which can be counted, bought, and sold. [34] By paying volunteer work with a special-purpose money, time dollar programs give that work explicit value and highlight it where it was hidden before by the money is value metaphor by which we live.

In this way, time dollar programs help to bridge the gap between service volunteers and social activists. [35] While time dollar program participants volunteer to serve their communities, they also participate in a social movement that seeks to change the way in which people think about money, value, and work. As one Neighborhood Service Exchange member writes, "We are challenging the modern messages that tell us happiness comes from the stuff we own, the money we make, and how 'successful' we are." [36]

This is not to suggest that all volunteer programs should start using time dollars. Each type of program has its own value to contribute to the world. And traditional volunteer programs stand to benefit from the existence of time dollar programs, to the extent that they succeed in making people think about the value of the time they spend helping each other.

This is also not to suggest that time dollar programs can solve all problems. Time dollar programs work under the disadvantages that traditional volunteer programs do. They are limited in the range and quantity of services that they can supply, and these constraints mean that there will sometimes be problems that will be beyond them. There will sometimes be people whom they cannot help. [37]

In addition, time dollar programs are local in scope, while there are some problems that cannot be solved solely through local action. A neighborhood could reduce its crime rate through a cooperative patrol system and not see its inhabitants' incarceration rate drop, if they are predominantly minorities and the city police engage in profiling. A seaside community in India cannot ultimately protect itself from the effects of rising sea levels, no matter how hard it tries, no matter how much social capital it possesses. They could build dikes and convert all of their fuel to non-carbon sources through cooperative action, and still be flooded out by the actions of others around the world.

By insisting that people value that which is not usually monetized, the social action of the Time Dollar Institute obliquely addresses these larger issues, many of which have at their bases the neglect of aspects of reality that have been downplayed by the money is value metaphor. Time dollars have great potential to cause social change while their users help their own communities.

It also seems that many of the fears that are associated with the monetization of the core economy of personal relationships are not manifested in time dollar programs. Time dollar users seem to maintain their sense of volunteering "from the heart," and time dollar programs do seem to build social capital. Time dollar programs certainly deserve more attention from the field of volunteerism.

* This article was developed as a paper in a graduate course taught by Dr. Sarah Jane Rehnborg at the RGK Center for Philanthropy and Community Service of the LBJ School of Public Affairs, University of Texas at Austin.

**The author wishes to make this material available for use. Please contact her via Beth Cotton at 108 W 45th Street #102, Austin TX 78751 for permission.

[1] Time Dollar Institute. The Time Dollar Institute. Online. http://www.timedollar.org. Accessed 18 April 2002; Time Dollar Institute. More Time Dollars 101. Online. http://www.timedollar.org/101/xMore1_one.htm. Accessed 18 April 2002; and Time Dollar Institute. About Edgar S. Cahn, Founder of Time Dollars. Online. http://www.timedollar.org/About%20us/About_Edgar_Cahn.htm. Accessed 23 April 2002. See also the article on "Service Exchanges" in Volume I, Issue 4 of e-Volunteerism, /quarterly/01sum/allvol4.html.

[2] Time Dollar Institute. Medium of Exchange. Online. Available http://www.timedollar.org/theory/medium_exchange.htm. Accessed 18 April 2002.

[3] Time Dollar Institute. Time Dollars 101 - Question Three. Online. Available http://www.timedollar.org/101/xMore3_three.htm. Accessed 18 April 2002.

[4] Karl Polanyi, "The Market as Instituted Process," in Trade and Market in the Early Empires, eds. Karl Polanyi, Conrad Arensberg, and Harry Pearson. (Glencoe, IL: Falcon's Wing Press, 1957); and Paul Bohannan, "The Impact of Money on an African Subsistence Economy" (1959), reprinted in Anthropology for the Nineties: Introductory Readings, ed. Johnetta Cole (New York: The Free Press, 1988), p. 275.

[6] Neighborhood Service Exchange. Stories By NSE Members. Online. Available http://www.pressenter.com/~exchange/Stories.htm. Accessed 22 April 2002.

[8] Time Dollar Institute. Rebuilding Community: The Co-Production Imperative. Online. Available http://www.timedollar.org/theory/Co-Production.htm. Accessed 18 April 2002; and Paul Glover. A History of Ithaca HOURs. Online. Available http://www.ithacahours.com/archive/0001.htm. Accessed 23 April 2002.

[9] Time Dollar Institute. Core Value Two: Redefining Work. Online. Available http://www.timedollar.org/values/Redefining_work.htm. Accessed 18 April 2002; and Time Dollar Institute. Rebuilding Community.

[10] Time Dollar Institute. Time Dollars 101 - Questions Eleven and Twelve. Online. Available http://www.timedollar.org/101/x11Question_eleven_twelve.htm. Accessed 18 April 2002.

[11] Time Dollar Institute. Core Value One: Assets. Online. Available http://www.timedollar.org/values/assets.htm. Accessed 18 April 2002.

[12] Sarah Jane Rehnborg, Professor, Lyndon B. Johnson School of Public Affairs, Class presentation, Lyndon B. Johnson School of Public Affairs, Austin, Texas, 18 April 2002.

[13] Dee Hock, The Birth of the Chaordic Age (San Francisco: Berrett-Koehler Publishers, 1999), p. 43.

[14] Speaking in the context of the simple living movement: Aditi Gowri, Professor, Lyndon B. Johnson School of Public Affairs, Class presentation, Lyndon B. Johnson School of Public Affairs, Austin, Texas, 18 April 2002.

[16] Time Dollar Institute. The Theory Underlying Time Dollars. Online. Available http://www.timedollar.org/theory/theory.htm. Accessed 18 April 2002.

[18] Time Dollar Institute. About the Time Dollar Institute. Online. Available http://www.timedollar.org/About%20us/Aboutus2.htm. Accessed 18 April 2002.

[19] Time Dollar Institute. The Theory Underlying Time Dollars.

[20] Time Dollar Institute. Time Dollars 101 - Questions Nine and Ten. Online. Available http://www.timedollar.org/101/x9Question_nine_thru_ten.htm. Accessed 18 April 2002.

[23] Joe Dominguez and Vicki Robin, Your Money or Your Life, 2nd ed. (New York: Penguin Books, 1999), pp. 59-75; and Gowri class presentation.

[28] John Wilson, "Volunteering," Annual Review of Sociology, No. 26 (2000), pp. 215-216.

[29] Time Dollar Institute. Time Dollars 101 - Questions Nine and Ten.

[30] Following quotes are from Neighborhood Service Exchange. Stories By NSE Members. Online. Available http://www.pressenter.com/~exchange/Stories.htm. Accessed 22 April 2002.

[32] Email from Cathy Dyball, Director, Neighborhood Service Exchange, "Answers to Your Questions," to Esther Cervantes, 22 April 2002.

[33] Following quotes are from Neighborhood Service Exchange, Stories By NSE Members.

[37] Neighborhood Service Exchange. FAQ. Online. Available http://www.pressenter.com/~exchange/faq.htm. Accessed 18 April 2002; and Rehnborg class presentation.