The Problem With Gifting Circles - It isn't a Gift or a Circle
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Have you ever been invited to a Women's Gifting Circle? I have been invited three times in the past few months. In the past few weeks more than five of my friends have been invited by multiple groups. "Gifting Circles" are not circles and the "gifts" are not gifts. These groups are illegal pyramid structures. Learn more about the details, structure and non-viability of Gifting Circles. I describe in detail how they operate and ultimately fail. They neither create abundance nor empower women. These systems need to stop. We need REAL, sustainable economic empowerment opportunities for women, not scams.
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The Problem With Gifting Circles - It isn't a Gift or a Circle
- 1. The problem with “Gifting Circles” It isn’t a Gift or a Circle To read the blog, visit www.green-ideas.com
- 2. Why am I doing this? This information is needed I am passionate I have the knowledge More than five of my closest friends have been invited into a “Gifting Circle” in the past three weeks. I am committed to a radical re- visioning of our economy one that moves into alignment with Earth’s rate of regeneration I have spent a good portion of my career exploring economic empowerment of women. I have been invited to three different “gifting circles.”
- 3. This is URGENT! “Gifting Circles” have caught like wildfire Most women don’t understand that this type of growth always has a collapse Many women are in desperate economic situations The women who profit don’t see other women in the subsequent circles get hurt Women need to understand the math on why this system isn’t sustainable.The more women involved, the more get hurt. Turning $5k into $40k is very alluring
- 4. The economic need is significant Over 24 million women live below the poverty line in the US 25% of women with infants live in poverty Only 6% of mothers in poverty receive public assistance Women are desperate for new economic opportunities That enable them to provide for their families Women need truly sustainable economic opportunities We need sustainable alternatives to an unhealthy economic system!
- 5. What you will see in this presentation Introduction to a Gifting Circle The Visual Math of Gifting Circles Why They Must Always Collapse The Impacts and Consequences Sustainable Alternatives
- 6. “Each woman gives a gift of $5,000 to another woman to support her in financial empowerment and manifesting her dreams.” “Each woman moves through the circle, arriving at the Dessert position, where you receive eight gifts of $5,000, totaling $40,000.” “The Circle is a way to achieve personal growth, remove blocks to manifesting, and participate in a path to personal empowerment that teaches us to support each other on many levels.” I was invited to a “Gifting Circle” called “Women Empowering Women” where:
- 7. Why the Gifting Circle attracted me A close group of women creating abundance together Money - I could turn $5,000 into $40,000 in just a couple of months – this could pay back my student loans or help with a house downpayment! Sisterhood - I could have an amazing support group of other spiritual women – something that I have been missing in my life. Trust - A close trusted friend invited me – she and I share a lot of the same values and perspectives on the world.
- 8. This is what I was told about the circle “Our Circle is NOT a hierarchy; it is a Circle. There is no one at the ‘top’ or at the ‘bottom.’ Unlike a ‘pyramid,’ women are constantly cycling through ALL the positions on the Circle.” “Since the early 1980’s, this circle has remained unbroken, and has grown in numbers, strength and integrity. Today it is a powerful moving force, providing many blessings to the women who participate.” “Nobody loses in order for you to win. Our intention is to benefit women, PERIOD.” “It's very important that we understand we are truly giving a gift when we come into the Circle, like a birthday or Christmas present. It is not an investment.”
- 9. Sounds great right? But . . . Here is what I learned: I researched the legal issues . . . I did the math . . . Something didn’t seem right . . .
- 10. The Story of a Gifting Circle Dessert The first woman didn’t make any investment, but suggested that the women who followed her could earn 8x on their “gift.” She asked them to “trust their intuition and disregard the negativity bias perpetuated by patriarchal nay-sayers.” The circle I was invited to used a “dinner party” theme to differentiate the levels
- 11. Dessert Tally = $10,000 Entrée Entrée Then she found two “Entrées” to give her $5,000 each . . . Tally 3 women $10,000
- 12. And with weekly “abundance calls” they found four “Salads” who also gave $5,000 Dessert Tally = $30,000 Entrée Salad Salad Entrée Salad Salad Tally 7 women $30,000
- 13. And with all the good vibes they found eight “Appetizers,” each gave $5,000 Dessert Tally = $70,000 Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Round 1 15 women $70,000
- 14. The first Dessert walked away with $70,000 and nobody knows who she is! Dessert Remember, the first woman didn’t make any financial contribution
- 15. Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer But, what do you do if both Entrées want to be Dessert? And now the Entrées are ready for Dessert! The group has to grow!
- 16. DessertDessert Receive $40,000 Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Dessert Receive $40,000 Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer They split into two groups Round 2 2 circles 30 women $80,000 Tally in Round 2 31 women now involved $150,000 “gifted” or invested 3 women have profited NOTE: Appetizers pay $5,000 directly to Dessert. When Dessert receives $40,000 she steps off the “circle.”
- 17. Round 3 4 circles 60 women $160,000 Tally – Round 3: 63 women now involved, $310,000 “gifted” or invested, 7 women have profited Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Then Four Groups
- 18. Round 4 120 women $320,000 Tally– Round 4 - 127 women now involved, $630,000 “gifted” or invested, 15 women have profited Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Eight Groups Growth is Exponential
- 19. Round 5 240 women $640,000 Tally– Round 5 - 255 women now involved, $1,270,000 “gifted” or invested, 31 women have profited Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Dessert Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer Entr e Sala d Appe tizer Appe tizer Sala d Appe tizer Appe tizer 16 groups
- 20. Can’t it just grow forever? Human Population = Probably Not Sustainable: Growth at our current rate of consumption of the Earth’s ecosystem resources will probably lead to ecosystem collapse. Gifting Circle = Not Sustainable: The growth quickly exceeds economic resource capacity (ability to bring in new women at $5,000), inevitably leading to collapse. Growth That Exceeds Resource Capacity Always Leads to Collapse! Population doubling time for the Gifting Circle is 6 months. Global population doubling time is approximately 25 years.
- 21. But isn’t abundance infinite? Gifting Circle Limit: At round 31 in the gifting circle, the number of participants required is 17 billion women, investing $85 trillion, exceeding our economic and human capacity. Economic Limit: The total human population on Earth is 7 billion people and the value of the global economy is $69 trillion. It is estimated that the Earth can only support about 12 billion people. In the non-physical realm, abundance is infinite, for example: Love = infinite Joy = infinite The physical world is finite: We are limited by population, econo my, etc. It’s exciting to live in a finite world. It causes us to be more creative!
- 22. But what about The Law of Attraction (thought + allowance = manifestation)? The Law of Attraction isn’t about fixating on a material object, such as money. Money rarely brings the happiness or “abundance” we think it should. The way to manifest using the Law of Attraction is to focus on the feeling of abundance and gratitude, which will bring more abundance and gratitude, arriving in the form most authentic to what is really desired, often not in the form of money. “I’m not hurting anyone else by manifesting financial abundance for myself, right?” Manifesting “abundance” does not necessarily mean manifesting money. Within the “gifting circle” structure, in order for some to win, most women lose
- 23. In order for the “Desserts” to profit, at least 88% must lose their money Round Number of Circles Women Involved Cumulative Dollars Invested # of women who have profited # of women who have lost money % of women who lose their money 1 1 15 $70,000 1 14 93% 2 2 31 $150,000 3 28 90% 3 4 63 $310,000 7 56 88% 4 8 127 $630,000 15 112 88% 5 16 255 $1,270,000 31 224 88% 6 32 511 $2,550,000 63 448 88% 7 64 1,023 $5,110,000 127 896 88% 8 128 2,047 $10,230,000 255 1,792 88% 9 256 4,095 $20,470,000 511 3,584 88% 10 . . . 512 8,191 $40,950,000 1,023 7,168 88% 31 1 billion 17 billion $86 trillion 2 billion 15 billion 88%
- 24. Gifting Circles Increase the Divide Between Haves and Have-nots! 12% 88% Gifting Circle Profit Distribution Women who profit Women who lose their money At some point, the circle must collapse, leaving 88% without ever receiving a gift. Not exactly equitable.
- 25. But isn’t this better than the 1% taking all the wealth in the US economy? The US economy Gifting Circle System No! The Gifting Circle is Worse!
- 26. The Bottom 88% Lose Big Time! $35,840,000 $(35,840,000) Top 12% Bottom 88% Gifting Circle Net Income After Round 10 It’s the women who are shy, have less time or just a smaller network that lose their money.
- 27. Many women who join gifting circles can’t afford to lose I heard about a woman who used her student loans to join a gifting circle One woman cashed out her small retirement account to participate I know at least three women who have borrowed money to participate
- 28. The top 12% are taking from their community (friends and family)! What does the loss of $35 million do to a community? How does this impact friendships?
- 29. I haven’t yet measured the economic impact, but it has ruined friendships . . . It destroys trust It creates a feeling of inequality Fosters feelings of hurt or judgment I have heard many stories of broken friendships and have personally experienced the loss of friendship because of my lack of support for a friend’s participation
- 30. “But if Dessert reinvests, it’s not a pyramid, right?” Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer
- 31. Dessert becomes one of 16 appetizers Dessert could reinvest her entire $40k, replacing all the other appetizers for ONE group (but since the group split, the need is now $80k). Also if she wants the 8x return (like $5k to $40K), she would need to invest in 8 different groups and help bring in 64 new appetizers to make that happen. Dessert Dessert Receive $40,000 Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Dessert Receive $40,000 Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Remember the group splits! Previous dessert at $5k It’s still a pyramid!
- 32. No matter which way you frame it Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer
- 33. Or what you call it . . . Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer
- 34. Or how you make it look . . .
- 35. A “Gifting Circle” isn’t a Circle Dessert Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Entrée Salad Appetizer Appetizer Salad Appetizer Appetizer Nothing circular in this shape!
- 36. It’s a Pyramid! One that grows through repetition, not accretion (like MLMs) . . . Instead of one big pyramid, you end up with a bunch of small pyramids that replicate faster than rabbits – yikes!
- 37. And the “gift” is not a gift ANY expectation or hope of financial return by definition means that it isn’t a gift. If the “Appetizers” were truly giving a gift without expecting a return, why do they try to move up to the “Dessert” position? There are many reasons women participate, but the biggest one is the hope of a $40,000 return. If this weren’t so, many women would also be participating in abundance circles that don’t involve a financial commitment. I don’t know anyone participating in such a group. If women were truly in the circle to gift $5,000 to someone in need, the structure would look very different – more like a philanthropic organization or charity (it would probably have the tax exempt status too).
- 38. If it isn’t a circle or a gift, what is it? It’s an Investment Pyramid!
- 39. Which is why it’s illegal Learn the Law! • http://oag.ca.gov/consumers/gene ral/pyramid_schemes • http://www.dca.ca.gov/publication s/legal_guides/u-2.shtml Participation is a felony governed under the “endless chain scheme law.” Have you ever heard of a Ponzi Scheme or Bernie Madoff?
- 40. A number of women who reached “Dessert” have felony convictions Guilford, Connecticut – May 2013 - two women found guilty and sentenced to 14 years in prison for conspiracy, fraud, and tax evasion. Sacramento, California – 2003, 20 women arrested. Plead guilty to felony charges, paid $150,000 each in fines. This is much worse than getting caught with a few illegal plants . . .
- 41. Links to Stories of Other Women Convicted of Fraud for Gifting Circles Maine, Texas and Pennsylvania: http://www.nytimes.com/2002/10/27/us/authorities-say-8-women-ran-12- million-pyramid-scheme.html Oregon:http://blog.oregonlive.com/complaintdesk/2012/12/the_desk_pyramid_scheme_seemed.html California: http://www.sacmag.com/Sacramento-Magazine/March-2004/Sacramento-Women-Women-Helping-Women/ Connecticut: http://guilford.patch.com/groups/police-and-fire/p/jury-finds-guilford-women-guilty-in-gifting-tables-trial and http://clinton.patch.com/groups/police-and-fire/p/report-investigations-into-gifting-table-schemes-will46882061b5 Michigan: http://www.mlive.com/news/muskegon/index.ssf/2010/12/seven_newaygo_county_women_cha.html
- 42. However . . . THERE ARE SUSTAINABLE ALTERNATIVES
- 43. Sustainable Economic Empowerment Opportunities for Women are Growing 44% of coops are still in business after 10 years, vs 19% survival rate for non- coop businesses Cooperative Businesses Social Enterprise Women’s Entrepreneurship Women will create over half of the 9.72 million new small business jobs expected to be created by 2018 Women are leading the way in social enterprise and outperforming standard businesses
- 44. Lending Circles • (Savings Clubs) Sisterhood Circles • (Women’s Groups) Investment Circles • (Group Investments) Giving Circles • (Charity Groups) Women pool their money and make small-med investments in women-run businesses. Philanthropic women’s groups that pool their money and give it to a particular charity or cause with a 501c3 tax status. No financial commitment, b ut emotional and spiritual investment and support. 10 people put in $100/month and at different points of the year, each person gets back exactly what they put in: $1,200. And yes, there are sustainable Women’s Circles that do economically empower women! This is VERY different from the pyramid “Gifting Circle!”
- 45. There are lots of other ways to give, invest and receive money that empowers women Micro- lending • Kiva, Prosper, Acc ion, TrickleUp, et c. Social Impact Investments • Investors Circle, RSF Social Finance, etc. Crowd Sourcing • Kickstarter, Indie gogo, etc. Low interest loans • Small Business Administration • Rural Development This is a way to legally fund your friend’s project or business with a gift! Women-run businesses qualify for specific low- interest loans If you have the money to invest, Social Impact Funds vet new ventures If you have a small project, you can apply for micro-credit
- 46. Why “Gifting Circles” or Investment Pyramids Don’t Work You will probably lose your money (you only have a 12% chance of winning). If you win, you do so by taking from other women. It doesn’t empower women or increase abundance! It’s an illegal pyramid scheme – you could face jail time. It isn’t sustainable! It requires 8x growth, inevitably leading to collapse. There are many other ways to invest or give $5,000. There are many sustainable systems and circles that actually empower women.
- 47. Who put this presentation together? Amber Bieg, MBA, Sustainable Management • Sustainable Business Consultant • Social Entrepreneur • Economic Feasibility Analyst Wife and Mama • Theo – 4 years old • Toby – due in 4 weeks • Chloe – 15 month old puppy Artist, Explorer, Spiritual Seeker • Fiber Artist • World adventurer • Philosopher
- 48. Stop the “Gifting Circles” Invest in REAL abundance! Share this with everyone you know Thank you for taking the time to read this! For more visit www.green-ideas.com - Amber Bieg Remember . . . “Gifting Circles” are not circles and the “gifts” are not gifts. These groups are neither creating abundance nor empowering women.
Editor's Notes
- Each gave her $5,000, she promised that together they could bring more women into the group to give gifts and that they too could get $40,000.