the problem with gifting circles - it isn't a gift or a circle
DESCRIPTION
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.TRANSCRIPT
The problem with “Gifting Circles”
It isn’t a Gift or a Circle
To read the blog, visit www.green-ideas.com
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.”
This is URGENT!“Gifting Circles” have caught like wildfire
Most women don’t understand that this type of growth always has a collapseMany 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
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!
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
“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:
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.
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.”
Sounds great right? But . . .
Here is what I learned:
I researched the legal issues . . .
I did the math . . .
Something didn’t seem right . . .
The Story of a Gifting Circle
DessertThe 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
DessertTally = $10,000
Entrée Entrée
Then she found two “Entrées” to give her $5,000 each . . .
$5,000$5,000
Tally3 women$10,000
And with weekly “abundance calls” they found four “Salads” who also gave $5,000
$5,0
00
$5,0
00
$5,000
$5,000
DessertTally = $30,000
Entrée
Salad Salad
Entrée
Salad Salad
Tally7 women$30,000
And with all the good vibes they found eight “Appetizers,” each gave $5,000
$5,000$5,000
$5,000
$5,000$5
,000
$5,0
00
$5,00
0
$5,000
DessertTally = $70,000
Entrée
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Appetizer
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Round 115 women$70,000
The first Dessert walked away with $70,000 and nobody knows who she is!
DessertRemember, the first woman didn’t
make any financial contribution
Dessert
Entrée
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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!
DessertDessertReceive $40,000
Entrée
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DessertReceive $40,000
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They split into two groupsRound 22 circles30 women$80,000
Tally in Round 2 31 women now involved $150,000 “gifted” or invested3 women have profited
NOTE: Appetizers pay $5,000 directly to Dessert. When
Dessert receives $40,000 she steps off the “circle.”
Round 34 circles60 women$160,000
Tally – Round 3: 63 women now involved, $310,000 “gifted” or invested, 7 women have profited
Dessert
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Appetizer
Appetizer
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ThenFour
Groups
Round 4120 women$320,000
Tally – Round 4 - 127 women now involved, $630,000 “gifted” or invested, 15 women have profited
Dessert
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Eight Groups
Growth is Exponential
Round 5240 women
$640,000
Tally – Round 5 - 255 women now involved, $1,270,000 “gifted” or invested, 31 women have profited
Dessert
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16 groups
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.
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 = infiniteJoy = infinite
The physical world is finite: We are
limited by population,
economy, etc.
It’s exciting to live in a finite world. It causes us to be more creative!
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
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%
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.
But isn’t this better than the 1% taking all the wealth in the US economy?
The US economy Gifting Circle SystemNo! The Gifting Circle is Worse!
The Bottom 88% Lose Big Time!
Top 12% Bottom 88%
$35,840,000
$(35,840,000)
Gifting Circle Net IncomeAfter Round 10
It’s the women who are shy, have less time or just a smaller network that lose their money.
Many women who join gifting circles can’t afford to lose
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?
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
“But if Dessert reinvests, it’s not a pyramid, right?”
Dessert
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$5,000
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
DessertReceive $40,000
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DessertReceive $40,000
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Remember the group splits!
Previous dessert at $5k
It’s still a pyramid!
No matter which way you frame itDessertEntrée
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Or what you call it . . .DessertEntrée
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Or how you make it look . . .
A “Gifting Circle” isn’t a Circle
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Nothing circular in this shape!
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!
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).
If it isn’t a circle or a gift, what is it?
It’s an Investment
Pyramid!
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?
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 . . .
Links to Stories of Other Women Convicted of Fraud for Gifting Circles
However . . .
THERE ARE SUSTAINABLE ALTERNATIVES
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
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
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, but 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!”
There are lots of other ways to give, invest and receive money that empowers women
Micro-lending • Kiva, Prosper,
Accion, TrickleUp, etc.
Social Impact Investments• Investors Circle,
RSF Social Finance, etc.
Crowd Sourcing• Kickstarter,
Indiegogo, 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
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.
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
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.