Start a Bartering Co-op

Article From Houselogic.com
By: Carl Vogel
Published: February 26, 2010

Want to exchange music lessons for help managing a garage sale, or any other number of tasks? A bartering co-op can help you find the right match in your neighborhood.

A barter co-op helps neighbors share their skills and talents with each other by trading tasks instead of money.

In communities around the country, homeowners have rediscovered the benefits of barter trade. By organizing a structured barter system, neighbors can go beyond an infrequent "I'll cut your lawn and you'll make me lunch" agreement. A barter co-op allows local residents to exchange with multiple partners, access a wide range of local services and goods, and help their neighbors.

Barter co-ops can be focused on one service (a babysitting club, for example) or include any service that participants want to offer. They can be limited to one neighborhood, be citywide, or even cross state lines. Barter systems can be run using a supply of simple paper money, or a sophisticated electronic spreadsheet.

In suburban Minneapolis/St. Paul, Donna Cullen has had her basement cleaned and her bushes trimmed, and she's been driven a few times to the airport through the local Hour Dollars barter program. For her part, she offers simple services like dog walking, gift-wrapping, and leaf-raking.

"The most popular categories are things like haircuts and massage, and people ask for a driver for when they need to do errands. But we have lawyers willing to do wills, too," says Cullen, an Hour Dollars board member. "Everyone has value and something to offer."

How It Works
Since a barter co-op allows members to trade with multiple partners, your program must have a system to keep track of things. Many groups use a currency based on hours. If it takes me an hour to shovel your snow, you pay me one "neighborhood dollar," which I may use next week with another member who is offering to tutor high school math.

Some co-ops say that every hour of work is worth the same, regardless of the tasks; others let participants negotiate-weeding a garden for an hour might be worth one neighborhood dollar, while a plumber might ask for three for the hour it would take to fix a leak.

It's easier to keep track of everyone's neighborhood dollars electronically than to print and issue barter co-op money. Just have both members email the cost and the transaction, and have a designated member keep track. A small group can get by with a spreadsheet on a coordinator's computer with email messages sent to members about their balance. For a system that can be accessed online by anyone in the co-op, a free database program can be modified by a tech savvy member.

An added benefit of the electronic system is that if a member wants a service that costs more neighborhood dollars than he has right now, he can run a deficit for a while, rather than having to wait until he's earned enough. Keep an eye on borrowers, though, and be willing to help them earn more neighborhood dollars.

A password-accessible website for members to check their hours is also a good spot for posting what each participant offers. A typical barter co-op member might use and return a half-dozen to 20 or so hours a year. Sending out a regular newsletter (http://www.houselogic.com/articles/condo-association-newsletter-helps-owners-feel-more-home/) -email or printed-lets everyone know what services are available, builds a sense of community, and keeps the co-op visible.

If you'd like to see exactly what's involved in starting a barter co-op, Timebanks USA (http://www.timebanks.org) offers a $65 start-up kit that includes six months' access to its barter co-op management software program, a manual, and online peer coaching.

Smooth Sailing
It's a good idea to pull together a core team to operate the program and set the ground rules. Here are some other key ideas for that team to consider:

Create clear parameters. A member might barter for just a few hours of service, but it's still an economic transaction. Treat everyone equally. Be sure the rules are fair and the system is transparent to avoid misunderstandings.

Issue hours to new members. Currency works best when there is liquidity. Give each new member a set number of hours when they join (two or three), and consider giving a member an hour when they bring a dish to share for a quarterly meeting or write the co-op newsletter. When people have a few hours in their account, they're more likely to use them and keep the system moving.

Keep members comfortable. Providing or receiving services from someone you've never met can be daunting. "Help everyone remember: Every transaction is voluntary, and the terms are negotiable," says Jon Hain, the board president of Madison Hours, a barter group in Madison, Wis. "You never want anyone to feel that having credits is a burden."

Explain the tax implications. The IRS considers bartering with unofficial money a taxable transaction. For a group of neighbors who are trading babysitting and car washes, you probably don't have to worry about this. However, if some of your members are businesses, they should consider any payment in "dollar hours" in the books as cash.

A community barter co-op takes some work to establish. Although it might take up to 150 hours to get one going, once it's running, it doesn't require that much time to maintain its progress. And, it can be more than a way to find someone to clean your gutters--it can be a great way to get to know your neighbors as well.

Carl Vogel, a Chicago-based freelance writer and former editor of The Neighborhood Works magazine, has written about public policy and community organizing and development for more than 15 years. He would trade some babysitting with someone willing to paint his garage.

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS (R).
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