Common Good, without fees: Payment system expanding to Hampshire County

NORTHAMPTON — William Spademan had an idea — create a way to put more power in the hands of ordinary people and limit a community’s dependence on large financial institutions and the federal government.

To that end, he launched a nonprofit and developed a payment system — both under the name Common Good — that allows people to pay for goods and services with a prepaid card or phone app. It may sound like any other bank service, except for one major difference — there are no transaction fees for businesses that accept the cards.

Additionally, Common Good awards grants for community organizations, nonprofits and projects chosen by members of a participating community using an online voting system.

On a recent Saturday afternoon, Spademan, 61, of Ashfield, held an informational session at Forbes Library in Northampton to explain how the credit-system process works and share the broader goals of his vision.

“Common Good communities take our destinies out of the hands of big businesses and distant government and brings it back into our hands at the community level where we see what is needed, care enough to fund that, and create a better world for everybody,” said Spademan, noting that the nonprofit is not considered a financial institution.

Common Good launched in 2012 in Greenfield, and has steadily grown — so much so that Spademan said the organization is broadening its reach into Hampshire County and other parts of Franklin County in the hopes of signing up another 1,000 members in the next year.

“The strategy we chose is to build the Common Good economy on a small scale within the mainstream so that we can grow easily without requiring any big change at once,” Spademan said.

Common Good has five employees and one volunteer working for the nonprofit, according to Spademan.

To become a Common Good member, one opens an account online and a card is delivered in the mail. There is also a phone app available. The system works by purchasing Common Good points, also called credits, that are equivalent to dollars spent. These points can be used at participating businesses and they can be redeemed for cash any time.

The money spent to purchase Common Good points goes into a community fund, separate from the nonprofit, which is controlled by members of each individual community.

Since 2002, the nonprofit has been funded almost entirely by donations from individuals and participating businesses for “seed” funding, according to the organization’s website. Participants and businesses can also choose to donate portions of their payments to support Common Good, but Spademan said there is “very little overhead” required for the payment system to work.

In Greenfield, where the payment system has been used over the past five years, there are nearly 50 participating businesses, a total of over $1 million in transactions completed to date, and, currently, there is over $100,000 in the community fund, Spademan said.

Businesses include the Acupuncture Center of Greenfield, Bicycles Unlimited, and the Mexican restaurant Mesa Verde, to name a few.

Since there are no transaction fees for purchases used with Common Good points, Spademan said the payment system saves businesses 1 to 3 percent from every payment transaction — which could add up to thousands of dollars per year for some companies.

Participating businesses may even choose to pay their employees in Common Good points, Spademan said.

In Northampton, there are far more Common Good members than businesses, with 100 members to only three businesses, according to the organization’s website.

In total, Common Good has signed up 729 members and 99 businesses.

Elsewhere in the country, the Common Good system has taken root. In mid-2016, a group of businesses in Goshen, Indiana, began using the Common Good payment system and, in early 2015, businesses in Ann Arbor, Michigan, launched Washtenaw County Common Good.

John Coull, former owner of Valley Bicycles and former executive director of the Amherst Area Chamber of Commerce, attended the Common Good presentation at Forbes, just a few days after becoming a member.

What drew him to the payment system was how businesses could benefit by not losing money to credit card transaction fees.

“My interest in this is coupled with a healthy skepticism,” Coull said.

He pointed out that if there are not enough organizations participating in the Common Good system, there would be less of an incentive for people to sign up.

Therefore, he said intends to urge more Amherst businesses to sign up for Common Good, as well as letting people know the benefits they could reap from it.

“I want to cover all the bases and, yet, I want to see this succeed,” Coull said.

In the past year, Co-op Power, a sustainable energy cooperative in Florence, has switched almost entirely to the Common Good payment system for billing customers in its Community Solar Subscription program, according to Lynn Benander, the cooperative’s chief executive officer and president.

Since not every western Massachusetts resident can install a solar array on their property, one of the services Co-op Power provides for National Grid or Eversource customers is a 15 percent discount on their electric bill each month for signing up through its subscription program.

When these subscribers are billed by Co-op Solar, they pay in Common Good points, saving the company nearly $12,600 a year in transaction fees.

“It doesn’t cost us anything to do it, and it takes about a minute to bill everybody,” Benander said. “We have a spreadsheet that automatically populates the numbers, we enter the array production for the month, and the spreadsheet calculates each person’s share, how it applies to their electric bill, and what they have to pay.”

Benander said that it can cost nearly $10,000 in upfront charges alone to pay for a similar billing system. Add transaction fees, which would could be up to 3 percent of purchases, it would cost Solar Co-op about $1,050 a month to bill customers, according to Benander.

“We are able to give people a much higher discount than what we would be able to give them if we had to actually bill it all through a fancy ACH (automated clearing house) program through a bank because they cost money.”

She added, “In Franklin County, I can get paid in Common Good credits and go buy my food at Foster’s or Green Field’s Market. The more I can recycle the Common Good credits that I receive to other vendors, the more it builds the system.”

The Common Good system has developed over the past 10 years, Spademan said, and after five years of testing in Greenfield, he is confident that the nonprofit is ready to expand into Hampshire and Franklin counties more rapidly than when it began.

He said he is hoping to get local public officials, nonprofit organizations, and college representatives in the area for workshops on Common Good in the next year.

“We want to expand into Hampshire and Franklin all at once and fairly quickly,” Spademan said.

The nonprofit is working toward hosting workshops at local colleges next fall with the goal of getting large groups of people on board at the same time, according to Spademan.

Common Good recently signed up its first business in Amherst with Bart’s Ice Cream on North Pleasant Street and they will hold an event on Tuesday at 6 p.m. where Common Good members will get a free ice cream cone with a purchase using their Common Good card or app. There will also be an informational session for people interested in signing up for Common Good.

Spademan also noted the benefits that members of the Greenfield Common Good have reaped using the payment system’s investment capabilities.

Last year, Spademan said Greenfield Common Good used its online democratic system for the first time to use $10,000 from the $50,000 in their community fund to invest in eight projects. Members voted to fund revitalization of the Shea Theater Arts Center in Turners Falls; a low-income farm share through Just Roots in Greenfield; a community-shared solar project through Co-Op power in Greenfield; a rooftop solar for Ashfield Lake House; upgraded appliances for the Stone Soup Cafe in Greenfield; art-making at The Art Garden in Shelburne Falls; a town-owned edible permaculture garden in Wendell; and a worker-owned Compost Cooperative in Greenfield that employs former prison inmates.

Even though there was a dip in the community fund after funding those projects, Spademan said “almost immediately, it started to go up again because there were new places to spend your Common Good card, so people on average put a little more money on their card.”

All the projects that were awarded funding through Common Good’s voting system agreed to accept Common Good credits once they were awarded the funds.

“There’s going to be more money going around in circles, so there was more money in the community fund,” Spademan said. Whenever grants or loans are given from community’s fund, an individual’s account is not impacted.

He said over the next couple years, he hopes to sign up at least 500 or 600 participants, giving the communities they live in the ability to choose how to fund projects that members recognize as important.

“The Common Good system is ready, we just need people to sign up,” Spademan said.
Luis Fieldman can be reached at lfieldman@gazettenet.com