The development of community loyalty points, which aim to give a leg-up to people living on the poverty line, is picking up momentum with two proof-of-concept projects slated to go live later this summer in Wigan and Hull.
The aim is for the points to become the world’s first digital community currency specifically aimed at alleviating economic hardship and promoting social value.
A Bitcoin-style ‘crypto-currency’, will allow people to earn digital credits in return for voluntary work or contributions to their local community. The tokens would then be redeemable against goods and services provided by participating companies and organisations.
Kindly.com and its social sector partners are expecting that councils will opt to support the idea so that people will be able to use points in part payment of core expenses like council tax, rent and business rates.
The idea for the digital currency came about as a result of adult social care and social prescribing work carried out in the Scholes area of Wigan, and anti-poverty work carried out by Hull City Council welfare rights and financial inclusion teams.
Community or complementary currencies are nothing new. They have been used throughout the 19th and 20th centuries to fill the void when national currencies or welfare systems fail. In recent years, initiatives such as the Brixton and Bristol Pound have achieved some success retaining spending power within their own communities.
Money is generally loaned into existence as debt. In these new schemes, community loyalty points will be earned into existence against the completion of defined socio-economic outcomes.
The objective is to stimulate grass roots activity that is measurable and which serves the public interest thus giving funders an opportunity to commission specific outcomes that the community get paid to deliver.
It also gives business an opportunity to support such activity in a way that produces measurable social impact.
In Wigan, the rewards scheme will begin with paper-based tokens that can be redeemed in a local shop for products supplied by commercial wholesalers that are looking to reward more sustainable lifestyles. It will soon progress into a digital rewards scheme where individual users will carry their own password-protected wallets on smart phones or other devices so that transactions will automatically update their points balance.
For the scheme to take off, residents must be able to use the points to buy things they actually want. Wigan is consulting its community on the 25th June.
Councils could agree to back the currency, for instance by accepting payments of points against written-off council tax, rent and business rate arrears.
Business could play a part, redeeming the currency for low-risk, low-value commodities, such as off-peak services or unsold tickets for one-off events.
This helps them unlock stored value in expensive and under-utilised assets like football clubs, cinemas and theatres. The community loyalty points can help these businesses develop pricing that rewards social outcomes and increases the use of their facilities.
It also helps them to capitalise on the personal and community connections that are difficult for online companies to establish.
Potentially it’s a win for business, a win for community and a win for individuals.