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WHAT ABOUT THE MONEY? LETS, Charitable Giving, Investing and Income


This first feature of 2001 began with an intention to focus on "Inspiring Change: Healthy Cities and Communities in Ontario", a new

book available from the Ontario Healthy Communities Coalition, full of stories of community change in Ontario, and reflections on what works (and what does not) in building healthy communities. It was hard to pick only one chapter in this great and wide ranging collection.

Looking over the areas that OHPE bulletin features have not covered, the issue of income and financial status stood out. We have a hard time talking about money, who has it, and doesn't, how it is shared and distributed and making an impact on economic conditions, within the global economy. The LETS story, where different forms of monetary exchange help community happen, is inspiring and sobering; an ideal and vision that has been tried and struggles to catch on, but has not [yet] been a success story. It is always helpful to have critical reflections, and to learn where we can do more.

This week's feature asks about what Canadians, and particularly health promoters, do about money, and giving to our communities. It is a

compilation of some articles, parts of the LETS story, and commentaries on money, giving, charity and socially responsible investment and actions. This is meant to be a starting point for more features, articles and discussions on what we can do for a 'healthy economy and community and the financial sides of 'civic participation'.

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- excerpts from LETS and Healthy Communities chapter in "Inspiring Change", by David Burman

"[A]fter decades of policies aimed at decreasing the disparities between rich and poor, the past few years have witnessed a worldwide reversal as the gap has increased - to the detriment of all but the very powerful. Answering calls for competitiveness, [governments] have cut back on essential programs at the very time when they are most needed. This chapter looks at how some communities have responded to these challenges through the development of community currencies, with a particular focus on the Local Employment Trading System (LETS).

In Ontario, besides the Canadian dollar, we have a variety of money systems, including some large business barter networks that account for millions of dollars' worth of trade every month. Canadian Tire money and Air Miles can also be considered alternative money systems, and at the community level, there are babysitting co-ops and barter clubs as well as organized local currencies. The most predominant organized local currency system has been LETS.

How does it work? LETS is really just a simple accounting system that enables a network of people to obtain goods and services by using credit points, called "green dollars". These green dollars are equivalent in value to Canadian dollars. Each participant 'pays' for a service or good with a transfer of 'green dollars' into another participants account, and brings their own account back up by providing a service or good to another LETS member, who notifies the system administrator of the transaction. As more businesses and individuals acquire accounts, participants can come closer to meeting their daily needs with locally produced goods.

At its peak, in 1996, Toronto LETS had almost 800 members, and about 40% traded actively. The same year, Toronto LETS obtained research funding from Health Canada to determine what effect participation had on their health and well-being.. [They] found general agreement that there was a community of people who traded with one another and that these transactions were different from carrying on commercial exchanges. For some participants, the presence of the community and the social support within it were their prime motivations. Many expressed the feeling that LETS contributed to social justice while challenging mainstream assumptions."

NOTE: in this chapter, David Burman expands on the healthy communities principles of LETS, the ups and downs of LETS around the province (in Ottawa, Peterborough, Belleville, Kitchener-Waterloo and Toronto) and what worked and did NOT work. His honest reflections are helpful and familiar to all of us - "we made mistakes, the most significant being trying to do too much with too few resources". What makes LETSystems work? Working with another established organization to provide administrative support. legitimacy, possibility of shared staff and/or income support, new ideas and an expanded network. Multiple local systems linked together, easier and more enjoyable trading - all a step closer to an abundant valuable local currency.

"Can a system like LETS provide people with most of their basic needs? Will it allow people to participate economically without the dependency caused by receiving charity. [O]ur answer is a qualified 'it depends'. All alternative currency systems have to deal with facilitating trade among their members. The impediments are always related to a combination of inconvenience and unavailability of services.. [A] 'critical mass' of traders and potential client must be recruited.

One challenge for local currency systems is to find a steady, reliable source of income for system development without depending on the capriciousness of granting agencies.

LETS is a pioneering effort that creates a stronger sense of community and healthy interdependence among people who use it. Although there are still problems to be resolved, LETS continues to enhance communities in many parts of Ontario."

In other communities, local economic development initiatives try to help individuals and small businesses grow through community loan funds, micro-lending, partnerships and supports and enterprises that contribute to a vibrant and diverse community.

As individuals though, are we contributing enough of ourselves to make a difference? There are differing opinions about the impacts of

charitable giving, voluntarism and 'socially responsible investments'.

Following are a few pieces for consideration.

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Just in time for the 'season of giving' in December, there were several studies and reports released by Statistics Canada, the Fraser Institute, and the Canadian Centre for Philanthropy on how 'generous' or not Canadians have been in giving to charity.

Charity Village online news cover story this week (January 2, 2001) reported that: According to the second annual ranking of generosity by The Fraser Institute, Manitoba leads the country again in terms of the number of people who give to charity, and Alberta tops the charts for biggest giving by amount. The article "Canadian & American Monetary Generosity," published in the December issue of Fraser Forum, finds that 26.4% of Canadian taxpayers donated to charity last year, giving an average annual donation of $822. [Ontario has 28.9% of the donors in Canada, giving only 1.21% of their income for an average annual donation of $944]. Canadians do not do well compared to Americans, who appear to be far more willing to give to charity, averaging three times the annual donation.

This notion of greater American generosity contradicts some other reports, including the "Caring Canadians" study, which used 1997 data and found that 88% of Canadians made donations, either of cash or in-kind help. Find the full report online at

On December 29th, the Globe & Mail newspaper carried an article written by Andre Picard, titled "Canadians becoming more generous". But reading further in to the article found a different situation - as a proportion of total household giving, charitable contributions declined He wrote:

The generosity of Canadians has increased steadily over the past three decades, according to a new Statistics Canada study, but the way we give has changed dramatically. There is an increasing preference for giving cash directly to others instead of groups.

"There is clear evidence of two long-term diverging trends: Rising generosity to individuals and a declining willingness to contribute to a

collective good of some kind as represented by charitable, especially religious, organizations," Paul Reed writes in Generosity in Canada: Trends in Personal Gifts and Charitable Donations Over Three Decades, 1969-1997.

A few days later, [January 2, 2001] the Globe carried an article by the same writer titled "Few Canadians roused by spirit of giving, study

says". Quoting another study by Paul Reed [and Kevin Selbee], prepared for Statistics Canada, they found that a mere 8% of adults contribute half of all donations and volunteer hours. This primary core of social leaders is backed up by a dedicated secondary core - another 20% of Canadians - and, between them, they account for 83% of all volunteer hours, 77% of charitable donations and 69% of civic participation.

"The civic core, although small, is clearly a pillar of enormous significance in maintaining a just and mutually caring society." the

researchers write. Mr. Reed and Mr. Selbee argue that learning more about this civic core of people is essential to understanding Canada's social structure.

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D. WHO IS GIVING OF THEMSELVES - the 'limits' of charity?

On Straight Goods - columnist Larry Solway launched a provocative commentary on the limits of charity... "Those who think voluntarism and charity will reduce the growing gap between rich and poor should think again.

Charity is good. Volunteerism is great. But we have to stop deluding ourselves that the problems go away if we have well-meaning volunteers. Many of those well-meaning folks also believe in less government, which also means fewer paid people working in socially needy settings. They contradict themselves.

Charitable giving and volunteerism are important because they give us the sense of being part of a caring society. They give dignity to

caring. But that still is not enough."

Solway's commentary sparked a lot of response from readers across the country. Of particular interest was long-time fundraiser Ken Wyman who suggested that there were two choices to 'charitable giving' to make a difference in challenging poverty:

1. Organize a serious lobbying effort to change government policies;

2. Organize our own alternative social infrastructure with effective structured systems for fundraising and volunteer mobilization, to do

what government will not.

See this and other commentaries at

As Mel Watkins commented at the end of his article on the Economics of Poverty (on Straight Goods): "What must not be forgotten, then, is that income can be redistributed in a good way. I ask you: Is there anything we can do with our time that is more useful than trying to make that happen?"

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E. SOCIALLY RESPONSIBLE INVESTING - another way to use your money?

If not directly to charity or fundraising for programs, there is also viewing our money as a way to invest with a conscience. According to a new study from the Social Investment Organization (SIO), Canadians are investing more in socially responsible investment products. The first Canadian Social Investment Review 2000 found that social investment assets in Canada total about $49.9 billion. Find more details and a copy of the study at SIO's web site at:

Straight Goods writer Tessa Hebb says that "Canada's socially responsible investors believe you can use 'the root of all evil' to grow something different." In an article that looks at the impact of withdrawing investment from South Africa in the 1980s due to apartheid,

to the current practices of investors, Ms. Hebb offers another way for people to use their money for social change. She notes: "The difference between ordinary investing and socially responsible investing occurs when a third factor - your values; personal, social or political - influence your investment decisions."

There are three distinct components in socially responsible investing (SRI): screened funds; shareholder activism; and direct investing in

local communities. All three involve a choice that is based on the value system of individual investors.

See this article at Straight Goods

The LETS story, and Riverdale Community Business Centre offer examples of direct investing in local communities, to build healthy economies and healthy communities.

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In May 1987 at the Prevention Congress III conference in Kitchener, John McKnight challenged health promoters to show that we are cost-effective in our work, and if not "get out of the field and turn our salaries over for income maintenance". I remember the three tests that John McKnight posed for health promoters to use to 'keep straight'.

1. How much of what you have done has improved the income of people you are concerned with?

2. How much of what you have done has enhanced the strength of locally controlled groups (not services or professionals)?

3. How much is your salary (and all those like you) and can you say honestly that you are 'cost effective'?

If you can demonstrate a tangible effect on #1 and #2, then your salary is justified because you are cost-effective."

Those were challenging words, and felt like cutting criticisms - especially when looking at the disparity between the income of helping

professionals and those we want to help.

McKnight was more provocative and direct than he has been in more recent years. Perhaps it is time again to push at the edges of our comfort.

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"Inspiring Change - Healthy Cities and Communities in Ontario, published by Ontario Healthy Communities Coalition (OHCC) October 2000, Toronto, ON 226 pages $10.00 per book + $2.00 postage To order the book:

"Caring Involved Canadians: Highlights from the 1997 National Survey of Giving, Volunteering & Participating" Statistics Canada, Ottawa, ON Canada K1A 0T6 in collaboration with the Canadian Centre for Philanthropy and Volunteer Canada. online at (requires adobe acrobat) [in OHPE #86.2 Jan 5, 1999]

"Patterns of Civic Participation and the Civic Core in Canada" Paul Reed and Kevin Selbee, for Statistics Canada, Ottawa, ON Canada K1A 0T6 December 2000

"Generosity in Canada: Trends in Personal Gifts and Charitable Donations Over Three Decades, 1969-1997" Paul Reed for Statistics Canada, Ottawa, ON Canada December 2000.

"Are Americans More Generous? A Comparison of Charitable Giving in Canada and the United States" Spring/Summer, 2000 Canadian Centre for Philanthropy Research Bulletin. looks at the complexities of comparing Canadian and American giving patterns and "confronts the public perception that Americans are more generous than Canadians". Available to CCP members or by ordering from

Straight Goods: Canada's online consumer & news watchdog.

- see the Library section on taxes and money, and the Straight Goods Forum for Larry Solway's commentary and responses.

Also see Mel Watkin's article on the "Economics of Poverty" at