How to Run a Business in the Gift Economy

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Maybe this is you: you've been working for a while on your own, making a little bit of money, maybe a lot of money. But something doesn't feel right. When you bill people for your time and expenses, something feels off. You hate that part. There are always the nagging thoughts, “Was it enough? Was it too much?” Maybe you've become friends with your client in the process of working with them and now sending an invoice feels uncomfortable to you. It nags at you. You feel apologetic about it. You think that the invoice monetizes a relationship that has become more than just about money. You won't work for your friends because you've always been told that mixing money and friendship doesn't work and now you are seeing one of the reasons why people say this. In fact, part of you would rather just give it to them as a gift, but you have to make a living. Right?

Or, maybe you are thinking about starting a small business on the side: selling kimchi or pickles or vanilla elixirs at the holiday market in town this year. You have real costs, but your experience tells you that if you are going to be selling these items to your friends and neighbors, what you really want to do is to give it away. What do you do?

Gift economics can help solve these nagging feelings that linger around the corners of for-profit businesses. But what is the gift economy? Gift economics was the basis for exchange practiced by many cultures around the world until the creation of money, even in the West up to the middle ages. (See David Graeber's Debt: The First 5,000 Years). The essential idea is that when you have enough of a surplus of something, you give away what you can to friends and neighbors. With everyone practicing this type of exchange, a web of connection is forged. Everyone “owes” everyone else a favor.

In this way, people get their needs for food, water, shelter, clothing, and luxuries met. The more generous you are, the more you are held in esteem by your community. Your community esteem matters because, in times of crisis, that web then supports you in turn. Your generosity is your wealth and your security. Receiving gifts from others acknowledges that you wish to be in relationship with them and that you will be there when they need you. It is a very beautiful way to live.

More and more people are turning to doing business “in the gift” as a way to help them feel more authentic in their business relationships and bridge the friend/client divide. Some businesses are better suited to it than others: small, service-based businesses (coaching, consulting, and design for instance) and small, home-based production businesses are most easily adapted, but other larger businesses, or parts of them, can be adapted to gifting as well. There is no road-map for gifting in business; no one way to do it. However, I can offer some things to keep in mind as you consider how to apply gifting to your work in the world.

Gifting Does Not Equal Free

If you are confusing those words, stop! Our culture defines giving a gift as something we do either anonymously or as giving without any return expected. Both of these definitions remove the opportunity for a connection between giver and receiver, and denies the creation of the web of connection that undergirds true community. When you work in the gift, what you are doing is asking the receiver to decide on their own level of gratitude rather than you, the seller/creator, dictating it for them by attaching a price to the transaction. You are also asking them to choose the the timing of the return gift. The idea that gratitude is created in a business exchange is a novel way to view buying and selling but is the very crux of gift economics.

Accepting Money is Not “Gift-washing”

There are gift economy purists out there that think any exchange of money is tainting the gifting relationship. We don't live in a hunter-gatherer culture, however, and money is needed by most people. It is a useful tool that allows us to give and receive gifts. Changing our relationship to money is a side effect of working in the gift. We move from a relationship where money is seen strictly as an asset to accumulate, to the view that money is just another way of expressing gratitude. Doing business in the gift is a new experiment and there is no right and wrong way. Don't let people tell you you are doing it wrong because you accept money as a gift.

Be Ready to Explain Gifting to Your Clients

This is a very new way of doing things and most people won't understand the concept of gift economics. They will hear “gift” and perhaps think “free.” They will get miffed when you ask them to check in with their own gratitude and come up with a number. They are likely to cry out in exasperation, “Just tell me a price already!” People are very used to not having to think deeply about gratitude, and it may cause some frustration. Be prepared with handouts and PDFs, as well as some links to essays and other online resources that explain gift culture and gift-based businesses (see below).

Serve Your Clients Deeply

If you are going to live your business life in the gift, you will need to examine the place from which you are acting and creating. No longer is your motivation necessarily about money. You are serving larger ideals: fostering gratitude, honoring friendship, serving connection to your community, contributing to the dismantling of the economic beast of neo-liberal capitalism. Whatever your motive, that place is what will keep you going when you are feeling doubtful about this whole gift economy experiment—and believe me, you will sit in that place of doubt often.

Be Ready to Turn Some Clients Down

Not every client is going to work out well for you. If you are going to have to work for weeks or months with a person and rely on their ability to grasp and participate in the gift economy with you, you want to make sure that you feel a deep connection with this person and enjoy the mutual project you will be creating together. If you are tabling at your local farmer's market, be prepared for the fact that some people will not be generous at the moment of sale. So many people have been programmed with scarcity mentality. Some people, no matter what you do, won't get it.

Let Go of the Idea of Immediate Return and Trust that Gifts Come in Many Guises

There are two main themes in gift economics: the first is service and the second is trust. You will do the work, hand it to your client or customer, and then ask them to assess their feeling of gratitude based upon their means and their satisfaction with the project. This is a vulnerable time, and you as the provider must move into a place of letting go of the outcome and self-talk around the project. It is easy to say to yourself, “Well if I was charging for money I would make X!” Even if the financial return is a disappointment, you never know what will come in the future: recommendations, new clients, food, emergency help, a second or third payment in the future, connections with people important to you, etc. Gift economics is a long game and in the end, in my experience, you come out better than you would if you had charged a set fee in the first place.

Barter is Taxable and Other Concerns

Some gifts may come to you in the way of barter and material goods. That is fine, as long as you can use these return gifts and that they are meaningful to you. Just keep in mind that barter is taxable, as are gifts over a certain amount. Talk that over with your accountant (who will, no doubt, look at you as if you have two heads when you tell him/her what you are doing.) If you are doing a lot of gifting work for one person, keep basic records for your taxes and report it as income.

Be Completely Transparent About Your Needs and Costs

You will have to humble yourself somewhat to work in the gift. If you are working with a client, be very honest about how much time and money you've put into the work. They need to know these details to be able to assess their gratitude. You aren't guilting them, you are providing them with the means by which they can decide on how to gift back to you. Help them see all the ways you need help in your life. For instance, you might want to create a list of expenses that you incur every month: coworking or office space rent, utilities, website hosting, food costs, etc. and offer up these expenses as potential means of gifted payment. You might want to have a “gift” button on your website so that people can appreciate your work in the future, long after the primary work has been done.

Use Social Media or a Blog to Talk About Challenges and Successes

Consider starting a blog to share your experience of working in the gift to others. Perhaps start a Facebook group for your business or join the many Facebook groups that have gifting as a theme. There are many gift-based businesses out there whose owners are talking about the challenges and joys of gifting. I can recommend Adrian Hoppel's blog about his (and his team's) experience designing websites in the gift. Another notable example is the work of Brice Royer, who developed a gifting group and is helping people, and himself in the process, in his local area in Western Canada.

Read Up on Gift Economics

You are going to talk about gift economics a lot doing this work. You probably will want to read up on it a little. Charles Eisenstein's Sacred Economics is probably the best known work right now (Eisenstein works as an author and speaker in the gift as well). Other notable resources are the works of Genevieve Vaughn, Riane Eisler's economic thinking, and, of course, Lewis Hyde's masterwork from 1983 The Gift: Imagination and the Erotic Life of Property.

Marie Goodwin is Chief Plate Spinner and External Hard Drive for Charles Eisenstein

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Top photo by PhotoAtelier (CC)

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