Sonoma County GoLocal Cooperative: economic localization, monetary reform and public journalism

Sonoma County GoLocal Cooperative: economic localization, monetary reform and public journalism

United States
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$250,000 - $500,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

We need to create a world where mutual support, trust, and prosperity have replaced deceit, suspicion, and scarcity; where neither human beings nor the living environment are exploited. I believe that the best tool for realizing this change is a model that creates money not as interest-bearing debt, but as payment for concrete value: a mutual credit system that puts responsibility for money issuance in the hands of the community it will benefit.

The GoLocal Cooperative pursues these goals through education and by recruiting locally-owned, independent business and individual members to participate in reward-based economic behavior that will lead ultimately to using locally issued, trustworthy money to the greatest extent possible to meet our daily and long-term needs.

About Project

Problem: What problem is this project trying to address?

The GoLocal Cooperative was founded to help Sonoma County, California, reclaim its local economic power. Sonoma County comprises nine incorporated cities ranging in population from 7,200 (Cotati) to 154,200 (Santa Rosa) , with another ~165,000 citizens residing outside municipal boundaries. Prominent for its wines and a broad range of other prized agricultural products, Sonoma County is also home to a swath of high-tech production and service companies, plus two highly-regarded higher public education institutions (Sonoma State University and Santa Rosa Junior College) and several private elementary and secondary schools. Thus its economic base is well-diversified and its population well-educated. Political patterns tend toward majority support for the Democratic Party and progressive social and environmental causes. The County is experiencing rapid growth of its Latino population, reflected in the recent election of our first Latino county supervisor and Santa Rosa city councilman. Public engagement in social and environmental causes is high, as evidenced by the scores of thousands of participants in the annual “Human Race”, the frequent peace-oriented lectures and drives organized by the venerable Sonoma County Peace and Justice Center, the well-supported Food Bank, and a host of other public-benefit activities and events. An outstanding example is the Volunteer Center of Sonoma County, which mobilizes tens of thousands of volunteers to work with hundreds of non-profit member organizations. Several of these NGOs are GoLocal members as well.

Solution: What is the proposed solution? Please be specific!

The GoLocal program is unique in several ways: 1) the organization is run cooperatively, with each member having one vote in policy decisions. We have studied and are emulating the successful Mondragón cooperatives in Spain. 2) The mutual credit program addresses not only daily transactional needs, but long-term savings and investment potential as well. (Detailed documentation available on request.) 3) The GoLocal card is different from other merchant-loyalty rebate cards. Credit accessed via the card can be spent not only at the business that issued it, but at all participating merchants in the GoLocal network. The card also mediates other, non-credit rewards at each merchant’s choice. No other localization network we’re aware of incorporates so many innovative features. Compare e.g. the “Berkshares” program in Massachusetts. You need US dollars to get Berkshares. That means the system is subject to the same scarcity that plagues the dollar economy. The GoLocal model, by contrast, gravitates away from reliance on the dollar as merchants facilitate an ever greater portion of their trades via GoLocal credit, which they issue to each other rather than begging banks for it. Global-scale, the social issue we’re addressing is the unavailability of sufficient money to meet everyone's needs. The solution, everywhere, is mutual credit. We're developing a flexible, reliable model for others to emulate and modify to suit their own local economy and culture.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

The GoLocal Cooperative runs an extensive outreach program to recruit business owners and individuals as members. In collaboration with our sister organization Sustaining Technologies, we have also introduced a unique rewards card that incentivizes local buying habits. Ultimately the credits that change hands between customers and merchants who use this card will become the basis for increasingly dollar-free transactions among the merchants themselves: a true mutual credit system. In a time when the centrally-controlled banking system fails to provide us with the credit we need, this new self-generated credit has the potential to save most of the jobs and public services we are currently losing.
About You
Organization:
Sonoma County GoLocal Cooperative
About You
First Name

Philip

Last Name

Beard

Twitter
Facebook Profile
About Your Organization
Organization Name

Sonoma County GoLocal Cooperative

Organization Country

, CA, Sonoma County

Country where this project is creating social impact

, CA, Sonoma County

How long has your organization been operating?

1‐5 years

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Innovation
What stage is your project in?

Operating for 1‐5 years

Share the story of the founder and what inspired the founder to start this project

The GoLocal Cooperative emerged from a nascent economic localization movement led by a number of people at various times, so it would be inaccurate to single anyone out as “the founder”. But they all shared a broad vision of locally controlled, environmentally sustainable economic growth, recognizing that modest prosperity is the precondition for responsible change – and that that reliable prosperity cannot be achieved within our dominant economic and monetary systems.

The current writer, a co-founder of GoLocal, was inspired by his discovery that the most influential single cause of human destructiveness and misery is economic scarcity; that this scarcity is not an immutable fact of our existence; and that it can be overcome by implementing different monetary tools that promote collaboration and mutual trust. Other founding members have been inspired by insights and mentors in areas including environmental and social activism, public journalism, socially responsible investment, and the human potential movement.

Social Impact
Please describe how your project has been successful and how that success is measured

In GoLocal's first 2 1/2 years, we have recruited about 300 business members and about 760 individuals and several non-profits. Since opening up the Rewards Card program to non-members two months ago, cards in use, transactions facilitated, and credit rebates earned have shot up, each by over 100%. Cardholders now total about 2,000. Total sales facilitated since the card’s inception in Jan. 2010 amount to $88,827. Credit issued by member businesses currently stands at $1,600 and credit accepted by them at $1,400, demonstrating that the credit is circulating effectively.

How many people have been impacted by your project?

1,001- 10,000

How many people could be impacted by your project in the next three years?

More than 10,000

How will your project evolve over the next three years?

We foresee expanding our business membership to 800 Sonoma County-based businesses by 2015. The ratio of Rewards Card holders to merchants will be 40:1 by then (i.e. 32,000 cardholders); by June of 2012 we will have issued 12,000 of these cards. We shall expand our income streams by launching “vertical” campaigns (e.g. Made Local, Bank Local, funded by member businesses in the related sectors) and inviting members to invest directly in GoLocal (including up to 35 “non-accredited investor” members, allowable in accordance with California cooperative law). We project that our operations will become self-sustaining by FY 2013, based on our membership and monetary growth since 2008.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

The main barrier to the success of innovative economic models is widespread public skepticism about their viability. This skepticism is sometimes justified – witness the high failure rate of typical “local currency” initiatives, 80% of which fold within three years. But it also stems from intellectual inertia: We have been trained to believe that the existing economic system, controlled by central banks, is as responsible and effective as we have the right to expect.

We intend to overcome this skepticism and inertia first by building public awareness of how supporting locally-owned, independent businesses creates jobs and provides increased tax revenues to local governments. (A realization embodied in our “Think Local First” campaign.) This educational mission goes hand in hand with a momentum-gathering member recruitment effort focusing on local merchants, non-profits, and government agencies as well as individuals. Then, starting with the well-accepted promotional concept of the “rewards card”, we are establishing a complementary payment medium which ultimately will allow participants to transact both their daily purchases and their longer-term investment and savings plans using, in part, locally-generated credit. Gradual at first, this process will pick up speed as public awareness grows.

Tell us about your partnerships

Aside from our large network of business members, the GoLocal Cooperative counts as members about 20 non-profits and local government agencies – e.g., the Sonoma County Bicycle Coalition, the Climate Protection Campaign, Santa Rosa Community Health Centers, Schools Plus, Credo Waldorf Charter High School, the American Philharmonic of Sonoma County, the Post Carbon Institute, etc. Other partners providing essential public services are our local bank and credit union members, seven in all; and our local media partners (KRCB radio and tv, KFTY tv, KSRO radio, Sonoma County Gazette, Bohemian Weekly). We share resources and information feeds with all these organizations, benefiting from exposure to their respective memberships and offering them free publicity via our own website, www.golocal.coop.

Since its inception, GoLocal has been a member of the nationwide BALLE organization (Business Alliance of Local Living Economies).

Explain your selections

Both the GoLocal Cooperative and its broad spectrum of members (businesses and NGO’s) rely on a huge informal network of family and friends to spread the word about their good work, and to help recruit new dues-paying members. We have also received significant financial support from the Kailo Fund and the Lydia B. Stokes Foundation, which funded much of our operations from 2008 through 2010. (That support has now run its course, which is why we need further assistance before reaching financial self-sufficiency.) Our primary source of income for the long term, however, will be member dues and transaction fees. The business member dues follow a “tiered” model based on the business’ annual revenues; the top tier pays $2,500 per year, the bottom tier $150. Fees will be computed as a percentage of transactions facilitated by the GoLocal Rewards Card, and may be paid either in dollars or in “GoLocal bucks”.

How do you plan to strengthen your project in the next three years?

As indicated above, we intend to grow our business membership to 800 by 2015 and our Rewards Card holders to forty times that. We expect Rewards Card use to grow very quickly now that we are inviting customers to become cardholders even if they choose not to join GoLocal as voting members (dues are $25 a year). Our business members themselves are taking responsibility for distributing these free rewards cards. We expect that appreciative cardholders will also want to join the cooperative once they’ve sampled its benefits, which are worth much more than the $25 annual dues.

We will also be expanding the reach and the value of our website, www.golocal.coop, which is becoming an increasingly important part of the Sonoma County public journalism network. In addition to the site’s business directory services, we publish other material submitted by members highlighting their activities, plus articles and blogs written by GoLocal staff exploring mission-related topics such as local banking and investing, the potential of cooperativism, etc.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Other (Specify Below)

SECONDARY

Inadequate transparency

TERTIARY

Need for regulatory/policy support

Please describe how your innovation specifically tackles the barriers listed above.

The primary barrier to employment addressed by our innovation is the systemic lack of sufficient liquidity to fund our societal and individual needs.

The secondary barrier, “inadequate transparency”, results from the arcane workings of the U.S. and international banking system.

Both are addressed by GoLocal’s program of local/regional credit generation.

The tertiary barrier is a systemic lack of economic leadership by our elected officials. We intend to educate them about sustainable, responsible solutions to budget problems (as opposed to draconian cuts). We urge them to lend their policy support to the GoLocal community development model.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

Leveraged technology

SECONDARY

Influenced other organizations and institutions through the spread of best practices

TERTIARY

Please describe which of your growth activities are current or planned for the immediate future.

Our immediate focus is to establish GoLocal’s self-supporting viability within Sonoma County. “Leveraged technology” is crucial to our realizing this aim. Sustaining Technologies LLC, GoLocal’s technology designer and provider, is responsible for maintaining the GoLocal website and managing the Rewards Card program.
While at this developmental stage we are not actively pursuing the spread of our program and its associated technology beyond Sonoma County, we welcome expressions of interest from other BALLE members, and have in fact received several inquiries; we are currently licensing use of our platform to a localization group in Santa Cruz, CA, for example, and to a governmental economic development agency in Ontario, Canada.

Do you collaborate with any of the following: (Check all that apply)

Government, Technology providers, NGOs/Nonprofits, For profit companies, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

As technology providers ourselves via Sustaining Technologies, we rent software development tools from various others to maximize our efficiency. Many of our members are NGOs/Nonprofits; we mutually support each other’s efforts and campaigns. The same goes for our hundreds of for-profit business members. We practice cooperativism, and are expanding its popularity in our community. Our emergence as a leader of economic localization in Sonoma County has been assisted by faculty in economics, psychology, and environmental studies at Sonoma State University over the past ten years. We also propose to work closely with the new Credo Waldorf Charter High School in Rohnert Park to teach the value of cooperativism to young people, and to avail ourselves of their energies as interns.