What are Flagstaff Neighborly Notes?

Flagstaff Neighborly Notes are a local medium of exchange. They are backed by our skills and labor and our trust in each other. The currency is complementary to federal dollars. There are three denominations, a 1-hour note, worth $10 or 1 hour of labor, a 1/2-hour note, worth $5 or 1/2-hour of labor, and a 1/10-hour note, worth $1 or 1/10 of an hour of labor.

Flagstaff Neighborly Notes are similar to commercial barter clubs. Barter systems can save participating businesses a lot of money. The major difference between a community currency and a commercial barter system is that the community currency is non-profit. There is no large yearly fee for participating, so the savings are even greater.

The Notes are also similar to coupons. If you accept, say, 10% in FNNs, it’s like a 10% off coupon. As with coupons, the Notes will bring in new customers who might not otherwise patronize your business. Unlike coupons, however, there is no cost to print up the coupons, and the money can be re-spent locally.

Neighborly Notes have counterfeiting deterrents: two-color designs, embossed serial numbers, and colored stamped dates of issue. Counterfeiting of Flagstaff Neighborly Notes is punishable as a felony forgery.

It costs $10 to sign up for the program. In return, a business receives $40 worth of Flagstaff Neighborly Notes. Your listing(s) of goods and services offered in exchange for FNNs will be published in the “Flagstaff Neighborly Notes Community Pages” directory, a bimonthly insert in Flagstaff Tea Party. Additional listings of goods or services under different headings cost $1 per additional listing.

Why would I want my business to accept Neighborly Notes?

Research from other community currency systems, most notably Ithaca HOURS, shows that community currencies increase business volume for participating merchants. Community currencies inject more cash into the local economy. Local money provides an incentive for people who have such money to spend to shop at a local business that accepts the currency.

Additionally, because Neighborly Notes re-circulate within the community indefinitely, rather than leaving the area after only a few transactions, as dollars often do, the entire community benefits from them over and over. As more and more businesses and individuals choose to accept Flagstaff Neighborly Notes, our local economy will be strengthened, making Flagstaff less vulnerable to outside economic dominance and instability.

Your business will also receive free advertising and promotion. Furthermore, interest-free FNN loans are available.

Do I have control over how many Flagstaff Neighborly Notes my business accepts?

Absolutely. You decide how many Flagstaff Neighborly Notes your business will accept per purchase. You may change your policy BEGIN ITALICS at any time.

We suggest that you begin by accepting a small amount that is easy to re-spend. In addition, make sure that you continue to accept enough federal dollars to cover expenses that can only be paid in dollars. As Flagstaff Neighborly Notes become more widely accepted, you could change your policy later to accept a greater amount of Neighborly Notes per purchase.

Here are a few ways to accept the currency:

·         As a maximum percentage per purchase.

·         As a maximum total per purchase.

·         Only on purchase minimums above a certain amount.

·         On certain days of the week, times of day or off hours.

·         On certain types of merchandise, like sale items.

Will my business be able to easily re-spend the Flagstaff Neighborly Notes it receives?

Yes. Because the currency is only issued to businesses that also accept the currency, you will not be flooded with more currency than you can easily re-spend. As more business and individuals choose to accept the currency, the choices will multiply.

Signing up local businesses that provide supplies and merchandise to other local businesses that already accept FNNs is a priority for us. We encourage you to tell us about local suppliers, or retail businesses where you would like to spend FNNs for personal purchases.

Here are some ways to re-spend the currency:

·         Pay it to employees or yourself as part of wages or bonuses. Employees must receive the federal minimum wage in U.S. dollars. Employees may agree to voluntarily accept any amount above that in Neighborly Notes. Wages paid in Flagstaff Neighborly Notes are not subject to tax withholding, and in some cases are tax-exempt (IRS Reg. [1322.01] 1.132-1, Federal Tax Reporter ‘91 v.2: 20,009).

·         Buy goods and services for your business.

·         Make donations and grants to community organizations.

·         Customers may receive Flagstaff Neighborly Notes as change or swap them for dollars.

·         Flagstaff Neighborly Notes can also be “bought” from your cash register with a personal check or cash.

Accounting with Flagstaff Neighborly Notes is easy.

·         Store FNNs in cash registers beneath $10, $5 and $1 bills.

·         Treat the Notes as petty cash. SImply record their dollar value, either in your regular petty cash account, or in a separate FNN petty cash account, if you want to track how many FNNs you are receiving and spending.

·         The dollar value of professional trades made with FNNs is taxable income, just like dollars.

·         Collect sales tax in dollars.

  Questions?
Call FNN Program Director Lisa Rayner
At 774-5942