Implementation of the SCF
Non-profit organizations tackle many of society’s vexing problems that businesses ignore and government struggles to address. However, they have long relied on a donor model for survival. But many are now turning to self funding revenue models to break that perpetual dependency model. The Sustainable Communities Framework (SCF), development by National Commonwealth Group, Inc., is designed to provide a broad based revenue model for a large number of non-profit organizations simultaneously.
The SCF is designed to be implemented on a state-by-state basis. The program is capable of injecting a considerable amount of money into a state’s economy, both as dollars and a state-based local currency. The following information details how SCF will be deployed.
National Commonwealth Group (NCG), the developer of the SCF, will partner in each state with a consortium of non-profit partners. Those partners will determine the priorities, programs and implementation strategies in their respective states.
The premise is that the citizens of a state know best what their problems are and what they need. NCG’s role is to provide them with the tools and system for carrying out those goals.
Money is the key requirement to achieve the majority of those goals. That will be provided in both dollars and a state-based complementary currency (see this 5 minute video and this more detailed article Money – It’s Not What Most of Us Think).
That requires a multi-part financial ecosystem in the form of three types of banking entities – a complementary currency bank (a public benefit bank) a development bank (both of which are owned by NCG) and a non-profit-owned retail bank (or a credit union). The retail bank may be owned by NCG or the state partner, but in either case all the financial gains will inure to benefit of that state.
Each of them addresses a particular part of the financial ecosystem, and in combination provide the complete infrastructure needed to address the objectives of that consortium. The development bank and retail bank (or credit union) will work for the benefit of society rather than shareholders, but nonetheless will still operate inside the current financial paradigm (see the Money article above).
Not so with the public benefit bank. It introduces the most significant new element in the financial ecosystem that we all currently live under, and its impact is game changing. The role and impact of the complementary currencies it will issue cannot be overstated and are the key to fundamentally changing things for the better. This program has been modeled on successful programs of the past which have yielded dramatic positive results for the communities that have used them. We have captured a number of examples in this article Complementary Currencies In Use.
After reading the above Money article, the reader is recommended to read the Public Benefit Bank section to get a sense of how impactful that can be on society.
How those three entities fit together and are deployed on a state-by-state basis is depicted in the following graphic. That graphic is followed by a brief explanation of each of the piece parts, with links to a more detailed exploration of each.
A brief explanation of each of the components above
NCG will partner with a consortium of non-profit organizations to carry out the SCF mission in each state. The objective is to assemble experts related to the most pressing problems of the state and to create task groups that can formulate solutions and oversee their implementation. The three banking elements of this ecosystem should generate substantial financial resources that will be used by this partnership to address the problems identified by the consortium.
The Public Benefit Bank represents the key mechanism that enables much of the SCF program. It does so by issuing a “people’s currency” called a complementary currency, based on historical examples where citizens bootstrapped their own economies without help from government or others. Each state will have its own dedicated currency, used to address many of the major problems for which no other comprehensive solutions are available.
A development bank is a special type of bank that normally does not provide retail banking services (i.e., banking to the general public), but rather addresses various developmental needs of a region and works in partnership with local governments and other organizations. One of the primary functions of each state development bank would be to address a wide spectrum of troubled assets in those states, ranging from consumer debt (mortgages, car loans, student loans, business loans, etc.), seized properties and blighted properties.
Each state SCF partnership needs a central ownership vehicle through which all the money is created, profit is generated, programs are funded and properties (assets) can be acquired. A holding company would assume the role of owning the companies dedicated to specific programs. Banks usually require special bank holding companies. All other types of companies and assets can be held under a common holding company. Such a holding company can also own a bank holding company that owns one or more banks.
Development banks are intended by design to address large scale problems and are not concerned with the banking needs of everyday citizens. Nonetheless, to have a complete financial ecosystem that addresses all the needs of a state, there is a need for some form of retail banking to complement the development bank and the complementary currency bank (described below). Those retail banking needs are addressable by a non-profit owned retail bank or credit union. A credit union by default is a non-profit cooperative, considered tax exempt by the IRS and state taxing entities. Credit unions do not have shareholders and are technically owned by their members on an equal, one member – one vote basis. A retail bank owned by a non-profit organization is an alternative to a credit union. Which best fits a particular state is determined by the SCF partnership in that state.
There are many ways to get involved that range from a central role in helping to organize the SCF program in your state, to joining the consortium to contribute your particular expertise, to being a participant in the SCF ecosystem by obtaining and using your state’s complementary currency. You also can help by signing our petition to the federal government to make your state currency tax exempt, thereby substantially increasing its value in your state’s economy. See this page Government for more details and to sign our petition.