Complementary currency helps local communities.

• Author: Herro, Alana
• Position: Community programs

Over the past 10 years, more than 5,300 school children from underprivileged Chicago neighborhoods have tutored their peers and earned free computers. Five parks in Calgary, Canada, have become pesticide free, and a formerly homeless 70-year-old woman in Wisconsin received free crochet lessons in exchange for cooking and cleaning for neighbors. All three of these community successes can be attributed to a single trend: "complementary currency" programs.

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Complementary currency, a form of exchange that aims to complement standard monetary currencies, comes in many forms. So-called local currency systems rely on homegrown paper money that is accepted only in a small geographical area and not backed by the national government. The intention of the currency, explains Gerald Wheatley, founder of Canada's "Calgary Dollars" project, is to promote a sense of community and to ensure that cash stays in the region.

Time-based currency, in contrast, is designed to strengthen communities by accepting that every individual has something to offer, says Edgar Cahn, founder and CEO of Timebanks USA. Under this system, a member of a local time bank who performs an hour of service will earn an hour of service from another member in return. Thus, the elderly Wisconsin woman was able cook for a neighbor and was repaid with a crochet lesson from a 15-year-old boy. Similarly, the Chicago school children were required to provide 100 hours of tutoring services each to earn a refurbished computer. These types of programs convert residents who are conventionally recipients of support into more active community participants.

Both approaches have their advantages. Steve Burke, board president of Ithaca Hours in New York state, says...