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Accounting for Timebanking

In reading this post, please keep its age in mind.

Have you heard of ‘timebanking’? No, nor had I until Pro Bono Australia told me about it the other day. I was a little surprised (having made an effort over the last year to keep up-to-date with NFP things), but it turns out that, although time-based currency exchanges have been around since 1832, and this is the only mention on their site, it’s only been going since November 2012, and only in NSW.

It’s being run by timebanking.com.au. They say that timebanking is “…as simple as give an hour, receive an hour: by giving one hour of help to another member you earn one hour of time credits, which can be used to receive services that are of personal value…”. Seems pretty straightforward. Volunteering to get volunteered to.

But it gets interesting the more you investigate.

First up, under About Us they say it’s volunteering, but not like traditional volunteering. I’d agree. In fact I’d say it’s sufficiently unlike traditional volunteering that it’s not volunteering at all. This is despite the academics who did the evaluation of the initial trial saying that it is a type of volunteering, one that is distinguished from ‘traditional modes of volunteering’ by ‘reciprocity and co-production’. Let me explain.

Although there’s a debate going on at the moment about whether the definition of volunteering ought to be expanded, the reference for what is and isn’t volunteering remains with Volunteering Australia and their Principles of Volunteering[i]:

Principles of Volunteering
1 Volunteering benefits the community and the volunteer.
2 Volunteer work is unpaid.
3 Volunteering is always a matter of choice.
4 Volunteering is not compulsorily undertaken to receive pensions or government allowances.
5 Volunteering is a legitimate way in which citizens can participate in the activities of their community.
6 Volunteering is a vehicle for individuals or groups to address human, environmental and social needs.
7 Volunteering is an activity performed in the not for profit sector only.
8 Volunteering is not a substitute for paid work.
9 Volunteering respects the rights, dignity and culture of others.
10 Volunteering promotes human rights and equality.

Timebanking is fine against numbers 1, 3, 4, 5, 9 and 10. But:

*  Only with a narrow definition of payment – #2 – can we say that an hour banked in telebanking is ‘unpaid’. For after making that deposit you then have the right to receive an hour’s labour.

This is how the Director of NSW Volunteering Simon Watts reasons that timebanking is still volunteering despite the ‘timebanker’ getting something in return:

 A little internet coaching or learning how to use Coles online or a few English lessons are modest (but highly valued) additional benefits in the face of the multitude of benefits volunteers already enjoy.

I hardly think the right to have an hour’s labour on something you want done in return for your hour’s labour is just another benefit like increased well-being or social connection, but I’ll let you be the judge.

*  Reading the Terms and Conditions before one signs up – as of course one should – there is a little surprise: ‘organisations or companies’ can join. (And by the time of the evaluation of the timebanking trial, more than 350 had signed up.) So only if we extend the notion of ‘groups’ to include entities is timebanking OK on #6.

*  There is no guarantee that services will be provided to not-for-profits only – #7. In fact we know that local businesses are included in the 350 organisational members above.

*  And if somebody gets some work done that they would otherwise have had to pay for, then that violates #8.

So if it’s not volunteering, what is it? The answer to that lies in the title of the Pro Bono Australia article: ‘Barter System for Volunteers’. Barter is the exchange of goods or services for other goods or services. So if you are an accounting entity (either individual or organisational, not-for-profit or business) that will mean the transactions should be recorded. And if in addition you are a taxable entity that gets the Australian Taxation Office interested: “Barter transactions are assessable and deductible for income tax purposes to the same extent as other cash or credit transactions.

Although timebanking.com.au, by the lack of reference to tax under either About us or FAQ, believes that tax is not something that participants need worry about, their lawyers (as lawyers do) have put a warning in the Terms and Conditions:

You are responsible and liable for any tax or other liabilities incurred in relation to Timebanking services you provide to or receive from other Timebanking Members. Timebanking does not warrant or represent that it has examined the tax implications of any transaction that a Timebanking Member may enter into. If you are unsure about the tax or other liabilities that may arise in relation to the Timebanking services you provide or receive, you should obtain accounting and financial advice on this issue.

 Good advice.


P.S. If you are in business and you sometimes barter goods or services, either via a formal exchange or privately, and you are not recording these transactions, can I suggest that you also seek advice?

P.P.S.   Business by The Book exists to provide accounting, audit and governance services, for no fee if necessary, to non-for-profits who are themselves serving those who are the cultural equivalents of the Bible’s fatherless, widows and aliens. 


[i]in their National Standards (2nd edition, 2001).