The Interra Project

SUMMARY: Interra is a new economic infrastructure, piggybacking on the credit card interchange, for comprehensively facilitating such alignment of aspirations with economic activity. It creates an ecosystem and virtuous circle among conscious consumers, the businesses and products that reflect their values, and the causes they want to support. This unifies citizens’ sense that the environment and personal health are intimately tied to community health and social justice.

PROBLEM SPACE: Consumer behavior is perhaps the most influential determining factor in humanity’s impact on the planet, on many levels, from the environmental cost of materials and distribution, to the human cost of cultivation and manufacture, to the long-term legacy of disposal.

A necessary condition for sustainability is for citizens to align their aspirations with their financial behavior. The desire to reduce carbon footprint or resource use or exploitation of others is only that, unless there are financially viable, even forceful, ways to realize that desire.

SOLUTION: Interra is a new economic infrastructure, piggybacking on the credit card interchange, for comprehensively facilitating such alignment of aspirations with economic activity. It creates an ecosystem and virtuous circle among conscious consumers, the businesses and products that reflect their values, and the causes they want to support. This unifies citizens’ sense that the environment and personal health are intimately tied to community health and social justice.

It thus creates market forces and feedback loops supporting responsible, sustainable products, services, and markets by making them more competitive, and hopefully eventually dominant. Such market forces are very akin to the “”low pressure”” created by a trimtab, making the process of turning the entire financial “”ship”” much easier.

Interra’s Community Change system is a universal, globally scaleable way for communities of any size to shift dollars to the common good by issuing Community Cards that generate Community Rebates in exchange for loyalty to businesses that the community wants to support, e.g. local and independent, “”green”” merchants, etc.

Every time a cardholder uses the Community Card (see attached image) at a participating merchant, a percentage of the transaction is returned as a cash reward to the consumer and an equal percentage is donated to a community-based non-profit.

The system is designed to be replicated community by community, as a network of regional initiatives organized at the neighborhood level. Each adopts its own version of the system, called a local program, tuned to their own needs, and all such local programs interoperate and learn from each other. Boston was the first ( ), and Puget Sound is launching around Halloween 2007 ( ). Cleveland and the Bay Area have committed to start their own programs as soon as possible, and numerous others such as the Civic Trust in the UK ( are in development. Non-geographic communities, such as Coop America ( ), are also in the works.

The system leverages the global credit card interchange for tracking and accounting. Each community issues its own Community Card, with a magnetic strip and bar code unique to the cardholder. When swiped or scanned, it registers the ensuing purchase through the interchange using Interra’s “”bank identification number””, the first non-payment BIN in the world (all others are payment BINs for banks, etc.)

Interra aggregates the transaction data, provides online accounts for cardholders and merchants, bills the merchants according to the rebate they have agreed to contribute, and distributes the revenues to the cardholders and the beneficiaries they have chosen.

The results are:
a. more customers and more loyalty for locally-focused, socially and environmentally responsible businesses
b. values alignment and savings for the cardholder
c. new funding sources for the beneficiaries
d. significant retained revenues for the community (as opposed to outflows to big-box store corporate headquarters)
e. more jobs for the community

But perhaps the most important result is that the system helps to speed the growth of environmentally and socially responsible industries and markets by rewarding conscious consumerism, enabling new, sustainable products and services to compete more effectively.

The Community Rebate also facilitates a different kind of sustainability, that of the nonprofit organizations it supports, tapping the philanthropic impulse in all of us, and creating a new, reliable source of funding. This creates a strong motivation on the part of the beneficiary organizations to be the marketing arm of the system, promoting adoption and use.

In addition, Interra functions as an “”infomediary”” service to its users, aggregating consumer behavior information, intent, and results. These give cardholders, merchants, and beneficiaries feedback on what is working, and provide strong arguments and market forces for more ecologically responsible and sustainable products and solutions. Such information is verifiable and actionable, allowing emergent behavior that anticipates and converges on ever-improving changes.

Interra has many additional ways to exploit the unique power of citizens using the global financial networks for leveraging their purchasing behavior. The dimensions in which we plan to expand for even more comprehensive effect include facilitating and integrating with carbon trading, microfinance, complementary currencies, product lifecycle tracking, and other “”scaffolding”” tools for making global-scale shifts to sustainable practices.

Because of our value to non-profit constituencies, and the fiscal sponsorship of the Natural Capital Institute ( ), Interra works closely with Wiser Earth ( ) as a powerful way of linking the financial networks with social networks active citizens.

Value created
Interra is “”for-benefit””. Specifically, that means that it is legally a non-profit organization, but it is designed to be a thriving revenue generator for all participants. Revenues are effectively 5-10% of all transactions made with the card at a participating merchant (each merchant sets their rebate amount; some are less than 5% but most are more). 35% of revenues goes to the cardholder, 35% to their designated beneficiaries, 10% goes to the “”program partner”” (e.g. Boston Main Streets), and the remaining 20% goes to Interra to pay its infrastructure service providers and fund expansion.

Thriving financially long-term is all a matter of scale. There are startup costs in each community (which fortunately decrease with every new one), which each community recoups and surpasses when the transaction volume grows beyond the breakeven point. As can be seen from the attached financials, the cumulative value created will be very large as the number of communities and their volume increases, generating very significant benefits for all parts of the system.

Funding so far
To date, Interra has been financed by an enviable array of sources (volunteers, grants, program-related investments, earned income, and sponsorship). Lamentably, that has brought less than ideal funding for such an ambitious undertaking, primarily because, as a non-profit, traditional venture investment is not one of those sources. While it has sufficed, better access to working capital is necessary to realize the full potential.

Grants: Initial development of the concept, systems design, and infrastructure was provided by a grant from the Steltenpohl Family Trust. The Puget Sound and Bay Area programs each received planning grants from local community foundations, the Russell Family Foundation ( ) and the Columbia Foundation ( ) respectively. This is a very replicable model, because the system leverages their investment greatly by strengthening the community financially and augmenting their financial support for local non-profits.

Program-related investment: The Russell Family Foundation subsequently provided a program-related investment ( ) for full implementation of the Puget Sound Program, signaling their belief in the financial viability of the model. This funds the rollout, is tiered based on deliverables, and will be repaid out of revenues.

Earned income: Creation of the Boston Community Change program was funded, essentially as work-for-hire, by the city of Boston through Boston Main Streets ( ). Cleveland is also paying for setting up of their system.

Sponsorship and Partnership: The Puget Sound Program has innovated a tiered sponsorship program that provides a promising source of revenues. Partners that align with the vision and have the mindshare of early-adopter citizens pay to issue co-branded cards. Examples are KING FM ( ) and PCC Natural Markets ( ), the largest consumer-owned natural food co-operative in the United States. Other tiers pay less, and don’t issue co-branded cards, but get the halo effect of association with a positive initiative.

The next phase
With the launch of the Puget Sound program, Interra will have achieved a second generation program, building on the learnings from the Boston rollout and establishing powerful best practices for future communities.

However, there is still a lot of work to be done to make replication to many communities fast, efficient, and powerful. Primary areas of improvement include systemization of community alliance/team building, facilitating large-scale merchant adoption, replication of the web presence for each community, and better integrating with social networks and other tools.

The first of those is built around Interra’s detailed launch plan, and depends on each community identifying and empowering a small team of passionate, connected changemakers.

The second builds on learning from each new community and the documentation and systemization thereof.

The third and fourth are extensions of the technical development achieved thus far, with the required additional financial resources.

We plan to expand the Interra team in primarily two dimensions: community expansion, expediting and streamlining the adding of new communities; and general tools development, applicable to all communities. Our current team will be the kernel around which that growth happens.