08091 Alternative Currencies and Investment Structures
There is nothing like a dream to create the future. — Victor Hugo, Les Misérables
Alternative currencies are legal in the United States as long as there is no attempt to avoid federal or state taxation.
While investment is more highly regulated, opportunities remain for raising capital “outside the box.” There are special difficulties raising money for small scale local enterprise, because the Wall Street’s friends in Congress rig the system to drive money toward the stock market and mutual funds. But it’s possible.
Ithaca Hours archive.org link to http://www.ithacahours.com/ (retrieved 2026–03–15)
Ithaca hours are an alternative currency created and used in Ithaca, New York. Each Hour is worth one hour of labor or $10. They can be spent at local businesses and with people who have agreed to accept them.
Time Banks https://www.timebanks.org/ (retrieved 2026–03–15)
A time bank is a way to trade time and services. People “deposit” time by doing things for people in their local Time Bank. If they need a service, they can use the Time Bank to get services.
Peer to peer investing — Solari Circles
Peer to peer investing involves no more than a dozen people, who make investments with people they know. For example, people could form a club and decide to pool a certain amount of money each month. Members of the group could apply for investment funding for the group or bring information about investments in opportunities outside of the group. The group considers the issues, does the research, and makes decisions on where and how to invest the money. A particularly innovative way of doing this is the Solari Circle, developed by permaculture finance expert Catherine Austin Fitts. https://solari.com/solari-circles-an-intro-for-financial-permaculture-students/ (retrieved 2026–03–15)
Crowd-sourced funding
Crowd-sourced funding uses the internet to arrange financing for projects. One example of this is Kickstarter, where supporters can pledge to support projects. If people pledge the full amount of the project, it funds and the entrepreneurs get the money. Google “crowd-funding” or “crowd-sourced funding” and you will find a world of capital formation waiting for your start-up business or worker-owned cooperative.
Ecosystem Investing
This is a concept developed by the financial permaculture folks in Tennessee. It combines concepts of investing IN an ecosystem with investing LIKE an ecosystem. They seek opportunities that are:
- Diverse (risk management!)
- Possess qualities of intimacy, integrity, authenticity
- Local oriented
Deposits in Credit Unions.
Credit unions loan locally and typically do not sell loans to outside investors. Instead they keep their loans so the interest paid remains in the local community. Besides this, there are innovative ways that credit unions can help local enterprises. Outside investors that want to invest in the Equal Exchange Coop can buy a 3-year targeted CD from a local bank, and the bank uses that as a collateral for a low interest loan to the Coop. archive.org link to http://www.equalexchange.coop/eecd (retrieved 2026–03–15).
Cooperatives
Most state laws authorizing cooperative incorporations exempt cooperatives from some or all of the state’s laws regarding securities. Coops can sell non-interest-bearing membership shares, and depending on the state, may be able to sell shares that bear dividends.
Local Investment Network
This is a structure, similar to the investment club profiled above, except that individual investors make personal decisions about investments. The group is a way for people with capital needs to meet people who want to invest in local enterprises. See for example No Small Potatoes, sponsored by Slow Food Maine, which links local farmers with investors. archive.org link to http://www.nosmallpotatoesinvestmentclub.com/ (retrieved 2026–03–15).
Cash Mobs
A cash mob isn’t an investment. It is a bunch of people who get together and agree to spend a small amount (say $10 or $20) at a local business.
Advance Sales
People raising money for a start-up can offer advance sales of products or services, typically in the form of a discount.
Direct Private Offering.
The general rule is that you can’t advertise the sale of securities (stock) to the public without going through the registration process. However, you may be able to sell stock privately, to people you know, without going through the registration process. See archive.org link to http://cuttingedgecapital.com/how-we-work/financing-strategies/five-categories/ (retrieved 2026–03–15) for more info.
Low-cost Direct Public Offering
In a conventional Initial Public Offering of a stock, the an intermediary bank sells the shares. This process requires a considerable amount of financial and legal work to register the securities for public sale. It can cost upwards of a million dollars to go that route. There is a loophole for smaller enterprises who want to sell their stock directly without using a bank. Details vary based on your state, but it may be possible to sell stock directly without incurring the huge fees involved with an IPO. More info is available from https://www.entrepreneur.com/money-finance/getting-started-on-direct-public-offerings/52818.
Open a local exchange.
Set up a local exchange where local businesses can sell shares to local investors. See LanX — a local exchange for Lancaster, Pennsylvania — at archive.org link to http://lancasterstockexchange.org/ (retrieved 2026–03–15). And Mission Markets Sustainable and Impact Investment Exchange archive.org link to http://missionmarkets.com/platform/ (retrieved 2026–03–15).
Self-directed Individual Retirement Account (IRA)
In the US, the IRS allows an individual to set up an IRA that the beneficiary will make the investment decisions for. It requires a legal custodian, so there are some fees. The account holder of a self-directed IRA could direct the custodian to invest the assets in a limited liability company managed by the account holder, which would then make investments in local enterprises. Besides the local impact, it has the advantage of reducing custodial fees and transaction costs and delays.