Website story on Toronto Dollar - By Murray Macadam

Joy Kogawa and John Flanders are on a mission. It’s one that’s already reaping dividends for some of Toronto’s poorest residents, while building a new path to community economic development.

Kogawa, an author renowned for her books such as Obasan, and her partner Flanders, an architect and photographer, are pouring their energy into a community currency called the Toronto Dollar. After a mere five months of operation, the Toronto Dollar is on the verge of becoming the most successful community-building currency in North America.

Here’s how it works. The Toronto Dollar is paper money, backed and used like regular money by participating businesses, organizations and consumers. First, businesses and organizations agree to accept Toronto Dollars at par. Individuals buy Toronto Dollars at par with Canadian dollars. Then as residents, local businesses, community organizations, churches and other groups spend their Toronto Dollars with each other, they generate business in the neighbourhood.

But the benefits extend well beyond a boost for local businesses, thanks to the Toronto Dollar "tithe." Ten percent of all Toronto Dollars spent go to a Toronto Dollar Community Projects fund to create work through community initiatives for people who are low-income, unemployed or homeless. So, for example, Out of the Cold, a church-based project to provide shelter for homeless people, received a $1,000 grant in January, 1999.

In effect, then, every time someone spends a Toronto Dollar on basic everyday activities and needs such as grocery shopping, restaurant meals, visiting the dentist or buying clothes, he or she is donating 10 cents from that dollar to charity. [editor's note: The 10 cents for charity is generated once only, at the time of the initial exchange. - See Q & A on this site.] Meanwhile, participating merchants know that they can cash in their Toronto Dollars, if they choose to, receiving 90 cents for each Toronto Dollar. 

Special attention to security has paid off. Toronto Dollars are printed on special paper by the same firm which prints federal currency and include special measures against counterfeit printing. The bills are strikingly beautiful, carrying historic images of Toronto , and come in denominations of $1, $5, $10 and $20.

The Toronto Dollar has made astounding progress since it was launched last December, with the enthusiastic blessing of Toronto Mayor Mel Lastman. By April, 1999, $45,000 worth of Toronto Dollars were in circulation. They can be used at more than 70 stores, restaurants and other businesses concentrated in and around the St. Lawrence Market area of downtown Toronto. Another dozen or so organizations also accept Toronto Dollars, including Oxfam and three downtown churches.

CED efforts need media exposure to help them grow. Most haven't been able to attract media attention, and the resultant lack of public awareness often leaves them weak and isolated. In contrast, Toronto Dollar organizers have skillfully  used the media to publicize their efforts, garnering widespread coverage, including two positive articles in Canada's biggest circulation daily, The Toronto Star.

The impact of the Toronto Dollar was readily apparent at a flamboyant April 8 party to celebrate the new currency. Three thousand people streamed through the St. Lawrence Market to buy and spend Toronto Dollars at participating merchants, visit displays by community organizations and churches, and raise $3650 for the project through a silent auction.

Meanwhile, three more Toronto Dollar grants were made: to a school breakfast program, to provide bursaries for community worker students, and to the Yonge Street Mission.

"It's been an amazing adventure," says John Flanders, who like Kogawa, has put in countless volunteer hours to give birth to this unique venture.

Community currencies have been launched elsewhere, with one of the larger ones based in the university town of Ithaca, New York. One of the best-known ones is a sophisticated barter system called LETS (Local Exchange Trading System). There are LETS systems in various Canadian communities, as well as other countries. LETS members trade goods and services with each other using "green dollars." Transactions are tracked through a computerized database. While LETS has attracted some support, it has never really caught on in terms of the general public. A major reason is is that while its easy to get a massage using LETS, it's difficult to pay for necessities such as food or clothing using green dollars. As an alternative currency, the Toronto Dollar has had much greater success, in the course of just a few months.

Building on barter -- and on faith The genesis for the community currency grew out of the experience Kogawa and Flanders had several years ago while promoting LETS. Few businesspeople or stores will accept payment in green dollars because they find the system too cumbersome. That major shortcoming, coupled with internal conflict in the Toronto LETS group, led Kogawa and Flanders to continue their quest for a community-building currency.

That search led them to develop a local currency, which they began promoting in their own neighbourhood, the St. Lawrence Market of downtown Toronto. The fact that it is a backed currency helped establish credibility. Besides their time, Kogawa and Flanders helped finance the start-up costs largely out of their own pockets, helped by a benefit concert and other donations, including a $5,000 contribution from former NDP Member of Parliament Lynn McDonald.

Another big boost came when David Walsh came on board. Walsh, a downtown businessman heavily involved in community activities, has become a key player in developing and sustaining the Toronto Dollar. Initially he was sceptical of the venture, but was drawn toward the concept of a backed currency that would be attractive to local merchants.

"The Toronto Dollar is a means of involving business people in community development --something which has proven difficult to do," says Walsh. "We receive calls from business people such as bank managers , wondering how they can help because they see it is a project that really benefits the community. It's also an umbrella for community events to happen, such as the recent Toronto Dollar party which supported the work of 35 community groups and connected people who do not often have the chance to meet."

A major breakthrough came when St. Lawrence Market manager Jorge Carvalho threw his weight behind the currency. Within days he persuaded 30 businesses based in the Market, a huge enclosed building, to accept Toronto Dollars. "The currency immediately had a usefulness," notes Flanders. "You could buy food with it."

Kogawa waxes eloquent when she outlines the spiritual values which she spurred her passion for the Toronto Dollar. It grew out of her last book, The Rain Ascends. "The book was a search for the presence of mercy," says Kogawa. "You only experience the presence of mercy when the presence of abundance is there. The opposite of the spirit of abundance is the spirit  of scarcity. In our world there's not enough money for the real things of life. The cry of hunger has to be addressed. "Mammon is so powerful and huge, it seemed ludicrous to think I could tackle it, to look Mammon in the eye. I felt my aim was to look at Mammon's clay feet and think of a toothpick I could put in Mammon's toenail."

She readily admits that she was staking a lot by going out on a limb with this high-profile, risky venture. "Losing a reputation is nothing. Jesus lost his reputation. People are losing their lives in the name of the Gospel. It was enough to know I trusted in God."

Spiritual values are also a key motivating factor for other Toronto Dollars organizers, such as David Walsh. "We do not seem to have many prophets around anymore," notes Walsh. "The Toronto Dollar is a way to help people express their values and make connections with others that are meaningful in both a prophetic sense and in a way that builds community.

Community is empowering, but our economic power is very small. This paradox is one which people of faith have to wrestle with continually in their daily lives." A sign of hope

Some are excited about the Toronto Dollar because of its potential to raise funds for worthy causes like helping the homeless, at a time of government cutbacks. Others share the broader vision of a different, people-centred economy, and society. Graduate student Mary-Beth Raddon is excited by its potential to bring back old-fashioned neighbourliness, and what she calls a "gift economy." If many other societies have built structures for trading goods and services around the circulation of gifts, as her studies in social anthropology have affirmed, why can’t we do likewise?

"There are precedents where people could get a lot of their needs met through neighbourly exchanges like building bees and barter," notes Raddon "Gifts were aimed as much at building group relationships as they were toward the normal way we think of the economy, in terms of matching goods and resources."

"The great thing about the Toronto Dollar is it symbolizes community in a tangible way. It’s a very tangible expression of your loyalty to local shopping." Some St. Lawrence merchants are now keen to help their local community, after seeing local residents support their businesses through the Toronto Dollar.

The Toronto Dollar project is at a crossroads. In order to expand into other areas of Toronto and to become economically viable, it needs to draw in new people, expand the number of dollars in circulation, and perhaps hire staff. "It's been very exhausting," admits Kogawa, adding with a laugh, "The money has gone one way -- out of us!"

At the same time, Flanders and Kogawa are struck by how their little seed has grown. "The time is right for this," says Kogawa firmly. "There's a lot of passion in this city. It recognizes the value of community. The creative imagination is such that all kinds of things can happen, once you begin to see the possibilities."

Adds David Walsh: "We should not underestimate the power of the Toronto Dollar as a symbol and how it might be used to further our vision of a more just and socially responsible economy."

* U.S. author Thomas Greco is currently rewriting his 1994 book, "New Money for Healthy Communities."