Dancing Rabbit Ecovillage’s Local Currency
We have a complementary currency called the Exchange Local Money (ELM) system. Almost everyone at Dancing Rabbit has an ELM account, and we can pay for almost anything we want with it, including all of our daily living expenses. Our local currency has become so popular that it is now used by a number of our neighbors, including the members of two communities that are located within three miles of us, Red Earth Farms & Sandhill Farm.
Due primarily to its ease of use, the ELM has become the preferred currency in our immediate local area. In fact, as of July 6, 2014, the ELM System had just over $100,000 worth of currency in circulation, with an average of about $70,000 worth of monthly transactions flowing through the system over the previous 6 months. This is a significant accomplishment for an alternative currency that is used by approximately 70 individuals and 30 businesses, nonprofits, co-ops, and community groups in rural northeast Missouri.
The ELM system is a modified version of a LETS (Local Exchange Trading System), a term for locally-initiated, democratically-organized, not-for-profit community enterprises that provide a community information service and record transactions of members exchanging goods and services.
How does the ELM System work?
ELM balances are tracked in a database that’s accessible through an online interface. Users can log in to see their balances, view a list of goods and services being offered, and make exchanges.
Our daily interactions with the ELM system are very simple. ELMs go into your account when other people send them from their own accounts; ELMs leave your account when you send them to other people in the system.
Organizations and businesses like accepting ELMs because they can avoid hassles with bounced checks, sending cash or checks through the mail to be deposited, and having to deal with credit cards and their associated fees. Furthermore, because the system is so convenient for users, people tend to pay more promptly when using ELMs. Businesses and individuals also like using ELMs because the system keeps a record of all exchanges in real time, which provides an excellent way to double-check bookkeeping.
People can use our local currency to pay for all of their living expenses as well as many luxuries. Housing, transportation, food, telephone, laundry, photocopies, beer, coffee, showers, massages and much more are all available from ELM-accepting businesses and co-ops.
The key to understanding how the ELM system works is to start with the concept that everyone starts with zero ELMs. Every time a transaction occurs between two accounts, one account goes down and the other goes up by the exact same amount. The total number of positive ELMs in all accounts is always equal to the total number of negative ELMs in all accounts.
Currently, individuals are not permitted to have negative account balances. Some community organizations and businesses are permitted to receive financing through the ELM system by carrying negative balances. There’s no penalty or interest for having a negative balance for any length of time and the ELM system does not require negative balances to be repaid.
We do screen requests for ELM financing and only give it to organizations that have proven to perform well financially. The only businesses allowed to hold negative balances are those that buy goods from outside the community with dollars and sell them within the community for ELMs. The account balances and transaction histories of organizations and businesses that receive ELM financing are public information.
What’s sustainable about the ELM currency?
The financing capacity within the ELM system is used to invest in infrastructure that will benefit us, our community, and the projects and causes we believe in. Because of how the ELM system works, the more people who hold positive ELM balances and the higher those balances are, the more money we have to collectively invest in our community infrastructure and institutions.
As of July 6th, 2014, the ELM system has provided the following interest-free financing:
E2,000 to BEDR, a co-op that provides solar power at Dancing Rabbit Ecovillage.
E2,000 to Cattail, a co-op that provides people in our community with a wide range of services.
E10,500 for Dancing Rabbit, Inc., our 501(c)3 that does environmental research and education to further our mission.
E14,000 for Dancing Rabbit Land Trust, a daughter title-holding corporation to Dancing Rabbit, Inc. that owns and manages our land and common buildings.
E28,500 for Dancing Rabbit Vehicle Co-op, the co-op that owns and manages our commonly-owned vehicles.
E2,000 for the ELM System itself.
E570 for The Grocery Store, a local business that sells primarily bulk dry goods.
E870 for the Milkweed Mercantile, a local business that operates a restaurant.
All together this adds up to 60,440 in interest-free ELM financing that is available for funding the organizations that make our demonstration village more viable and more effective in its mission.