Gifting Circles – Building Sustainable Alternatives

I recently posted a presentation about Women’s Gifting Circles. In just a few weeks, the presentation was viewed over 30,000 times. The feedback and response has been overwhelming. The vast majority has been very positive and supportive. The primary critiques of my presentation have targeted my credibility by suggesting that I “don’t understand the benefits of women’s circles” or that I have been “brainwashed by a patriarchal system.” So I have decided to tell the story that can’t be conveyed in a presentation.

The Power of Women’s Circles

After 36 hours of labor, my mother gave birth to me at home, with the support of her friends and a midwife. I grew up surrounded by a community of amazing women. My mother’s circle of “sisters” are my “aunts” and they are now the “grandmas” to my sister’s daughters and my sons. I can turn to any of these women for support and advice, as I do with my own mom. This group taught me how to connect to the Earth, see our sacred relationship to all things and understand my responsibility as a steward. Through them, I learned that womanhood is grounded in the embodiment of the divine feminine and this is only supported by a circle of women.

Near the end of a nine-hour crowded bus ride in Oaxaca, Mexico, an indigenous woman begged me to take her two-year old son, Roberto, back to the US with me and raise him as my own. With tears, I said “no” and gave up my seat on the bus. In that moment, I vowed to myself that I would work towards the economic empowerment of women so that no woman would feel desperate enough to beg a stranger to raise her child. After returning from Mexico, I focused my university education studying gender and women’s economic empowerment.

In my early 20’s I moved to Los Angeles and joined an incredible group of women who held monthly New Moon ceremonies. Every month, Aleks generously hosted all of us at her home, where we brought food for a potluck and contributions for the bath salt ceremony. There was no financial “gift” or investment, however everyone usually pitched in a few dollars to help pay for bath salts, jars, etc. We each took turns sharing our intentions and placing symbolic alchemical ingredients into the bowl of bath salts. This often included herbs, tears, milk, essential oils, our hopes and dreams. Each one of us would take a small jar home with us and bathe in our collective intentions on the full moon. During the bath salt ceremony we would share food, laughter, hugs, tears and sisterhood.

Like so many women who participated, this women’s circle transformed my life. It helped me see through an unhealthy relationship and gave me the strength to leave. These women encouraged me to stand in my power, declare what I wanted and manifest it. I declared that was going to move to San Francisco and needed $10,000 in order to step into my dream. Two weeks later I won a large-format HP printer in a raffle drawing at a work-related conference (which I sold on eBay for exactly $10,000). This windfall allowed me to move to San Francisco and find a new job, which eventually led me to fall in-love with my amazing husband and raise over $1 million in grant funding to manifest my vision of expressing the true value of trees (www.urbanforestmap.org). Through this magical Women’s Circle, I awakened into my own power, womanhood and abundance. Nearly ten years later, I live a life I love: I’m doing meaningful work (Fibershed and Food Commons), I’m married to a wonderful man and we are blessed with beautiful children. Aleks the host of this circle, an amazing midwife, co-founder and clinical director for the Sanctuary Birth and Family Wellness Center and one of the leaders in the sacred birthing movement, is still one of my best friends. Our now four-year old children were born within a month of each other. She is also my midwife and in a few weeks, will support me in delivering my second son.

My experience of a women’s circle is one of many sustainable models for how women can empower women through sisterhood circles. Like my circle experience, no financial involvement is necessary for powerful abundance and manifestation. But even within circles that ask for  financial commitments, there good structures. There are Lending Circles, where 12 women pool a monthly sum of $100 and one month a year, each woman receives $1,200. This moves through the circle each month. So at the end of the year, you end up with $1,200, exactly what you put in. You could have saved that money using a savings account, but it is much more powerful to do this through sisterhood. This is a very sustainable system that women use around the world, especially where women don’t have access to bank accounts. Also, there are Giving Circles, or philanthropy groups, where women pool their money and make charitable donations to organizations that support women. And there are Investing Circles, where women pool their money and make investments in women-run businesses. Investments such as these can help to start sacred businesses like the Sanctuary Birth and Family Wellness Center.

Why I Was Attracted to the Women’s Gifting Circles

In 2012, my husband and I were struggling financially. I had just finished graduate school and my husband was in a career transition. We decided that we couldn’t really afford to raise a family in San Francisco on our income and wanted to move to a community where life could be easier. We wanted a place with plenty of wilderness access, a co-housing community, a Waldorf school and a strong spiritual community. We found a beautiful community where some close friends had recently moved and decided to plan our move, but were still short $40,000 to make it happen. During our planning time, I took a solo trip to visit the community and sat in ceremony overnight with an amazing circle of potentially new neighbors. I felt completely embraced by the community. It intuitively felt like “home.” In the morning I shared with one of the women who sat across the tipi from me all night about how much I missed the women’s circle in LA and how I hadn’t found that circle of sisterhood in San Francisco yet. I also told her how my family was ready to move, but were short about $40,000. She got very quiet, looked deeply into my eyes and said: “I know how you can get $40,000 and find your sisterhood circle at the same time. ”

While I pondered this opportunity over the following week, a good friend called me with a very hushed tone of voice and said: “I want to share a really exciting opportunity with you. I’m sharing this with you because I know how committed you are to the economic empowerment of women and I know that you need $40,000 to move.” She described her women’s circle as a group of spiritual women on a quest to create abundance in other women’s lives by holding weekly abundance calls and giving each other financial gifts. She told me that this was a very secret and exclusive group, only for women on a “conscious path.”

My friend emailed me a packet of information describing a “gifting” structure, where each women “gifts” $5,000 to the woman leading that circle (at “Dessert” level), after the woman at the dessert level receives $40,000 from the newcomers she leaves the circle. The group splits and the two women below her move into the “dessert” position, each taking half the circle members. The woman who left the top has the option to reinvest in either or both circles. The two new “circles” then need to recruit eight new members at $5,000.  I mentioned to her that this looked like a pyramid, not a circle. She responded, “its an upside down pyramid.” I took a week to sit with the information and do some calculations, I called her back and said, “I did the numbers . . . this is a really bad financial structure. People will get hurt. In order for you or I to get $40,000, eventually other women have to lose their money.” She responded defensively: “I trust my intuition to make decisions, not numbers.”

A week later, another friend called me, initiating a conversation that felt like déjà vu. This time, I explained the math and urged this friend to leave the circle. In tears, she responded: “I know that some women are going to lose their money and that sucks, but I will never meet them and I’m too close to quit now. I need that $40,000.” She was in the middle of a divorce and was desperate for a way out a really bad marriage.

The Power of Abundance

I know that feeling of desperation when a huge change is needed, especially when trapped in an unhealthy relationship. The $10,000 windfall from the printer I won helped me more than I ever could have imagined. The idea of a windfall is why so many women join gifting circles. They envision their own windfall and how it will manifest their dreams. Especially for women who struggle financially, a windfall can make “things a little bit easier,” manifest their dreams or get them out of a bad situation. Its like finally having a fairy godmother bless you. This is exactly how I felt when I won that printer. I could finally move forward in life.

So many women need this. So many women struggle and just need a break from the difficulties of life. For many of the women who join gifting circles this money is critical to the changes they need to make. The women who receive the money in gifting circles feel amazing. For many of them, it is the first time they have ever been allowed to receive. For many, it is the first time they have ever felt truly supported and held. They feel empowered. The combination of the women’s circle with the gifting feels incredible and makes such a huge difference in women’s lives. So how could it be bad?

The “Do No Harm” Motto

If someone told me that the $10,000 printer I won in that raffle was going to hurt someone else and that 8 people would lose money by me winning, I hope that would have said “no thank you” and returned the prize. But the truth is, I have an idealized version of my past self. I really needed money and I’m not so sure what I would have done. Luckily that wasn’t a choice I had to make. My windfall was 100% luck. Today, I picture myself as an altruistic person who tries to minimize my impact on the planet and other people. I work on projects that bring about sustainable solutions to local economies. I don’t buy clothes made overseas. I drive a used Prius. I eat locally sourced, organic food. But I do fly across country once in a while, contributing to climate change, I bought an iPhone a few years ago, furthering bad manufacturing practices and I am sure that there are other impacts I am unaware of. My footprint on the planet isn’t 100% clean. Nobody’s is. However, like Patagonia, my motto is to “do no harm” and where I discover the possibility of harm, I work to change my behavior or habits.

If someone told me that my actions would cause significant harm to others, I like to think of myself as someone who would seriously consider that information and change my actions. However, I am not sure this is information I would want to hear. It is difficult to hear that you are hurting someone else, especially if you are living a life that aims to “do no harm.” I am presenting this information so these circles stop growing and that they harm the least number of women. I hope that in reading the next few sections, the women who have been involved in gifting circles or who are currently involved, consider what I have to say with an open mind and heart.

Why It Isn’t Sustainable

While it feels amazing to be “gifted” $40,000 and the women’s support is truly empowering, there are two problems with the gifting circles: 1) It isn’t sustainable – It can’t grow infinitely, and 2) In order for some to win, most must lose (in order for 12% to win, 88% must lose).

To understand why it isn’t sustainable, it’s really important to understand exponential growth (most people don’t’ understand it, so don’t feel bad if you don’t). This is why I created the Gifting Circle presentation. I wanted to visually communicate the math so that it is easier to understand. But the basic premise is this: In order to have 800%, return (turn $5,000 into $40,000), the “circles” must replicate at a rate of two times per cycle (it can take a month or years to reach dessert . . . depending on how successful the circle is).  This growth by replication means that each cycle requires twice as many new women gifting $5,000 to support all the women in the receiving position of “dessert.” When you have a doubling rate like that, you eventually lead to collapse, because population doesn’t grow that fast (Earth’s human population doubling rate is 25 years). By the time you reach 30 cycles, there are over 500 million circles and the need for new women gifting at $5,000 exceeds the entire population on Earth. This would mean that there is nobody left to “gift” to the women at the bottom or mid levels (88%) and only the women who have made it to dessert (12%) have had the benefit of receiving. This is far from fair.

The saddest part is that these circles self-perpetuate in “an endless chain” as the “dessert” steps off, the other women step in, allowing it to continue without the top person ever seeing the consequences of her actions . . . it operates like a exponentially spreading virus. As the groups split and more and more people join, there are less people available to come in as appetizers. Also, the people who are more popular, more influential, and/or more tenacious have a better chance of getting their money than an introverted shy person. The new entrants become fewer and fewer as the number of circles grow and less people are available to join.  Eventually the time-frame gets longer in which the new woman in “dessert” receives her money. Finally enough time goes by without new entrants that someone starts to complain . . . leading to a criminal investigation or collapse. To understand the magnitude of impact: If the circle requires each person to enroll just eight others, by the 10th level (starting with just one person at the first level), there will be 8,184 people involved. If the circles stop growing or collapse at this round, 7,202 women will lose out (this number grows as more and more circles split). And if each one paid in at $5,000, that’s a loss of more than $36 million. Imagine what that could do to just one community.

Why It’s Pyramid

A pyramid scheme doesn’t necessarily require one person to be at the top with infinite growth underneath like multi-level marketing companies. A pyramid can be a bunch of small pyramids that replicate, like the “gifting circles” do. One woman is at the top (“dessert”), two women are on the second tier (“entrées”), four women are at the third tier (“salad”) and eight women are at the bottom (“appetizer”). Each time “dessert” steps off, the group splits into two (or doubles) so that the two “entrées” can both be in the “dessert” position with their own group. However, eight new women are needed to join each group, with a total of 16 new women gifting $5,000 each. The unfortunate part of using the term “circle” to describe this system is that it confuses people.

I have heard some women say that it isn’t a pyramid because “dessert” reinvests. After a dessert receives her money, steps off and is ready to reinvest, she is only one of 16 people at the bottom to support the money she took out (remember, her group split and now 16 people are needed at the bottom to support the two now at the top). This still means that exponential growth is required to sustain this system, which makes it by definition; a pyramid.

Pyramid

Why It Isn’t a Gift

Giving is a beautiful thing. A gift is unconditional; there is no expectation of reciprocity. Not one woman I know who has joined a gifting circle is in a financial position such that letting go of $5,000 is no big deal and they are only doing this to help others move forward in life. That relationship is called philanthropy. So many women need and deserve philanthropic gifts. The world needs more philanthropy in general. There are a number of philanthropic organizations that receive gifts and give scholarships, grants or loans to help women kick-start their lives. These systems need to be more utilized and supported. However, the women who join the “gifting circles” often do so when they aren’t in a financial position to lose that money. They are hoping or even planning to receive $40,000.

While there may be some women who join the gifting circles to give freely, if they stay till “dessert” it means that they expect a larger gift than what they put in. If a woman aims or works to reach “dessert,” it inherently means that she is expecting or hoping for a “return on her gift.” While giving money and receiving 800% more money than what you contribute is a very exciting prospect and feels good, it is NOT a gift. If you put $5,000 in and receive $40,000 out, technically this makes it an investment, not a gift. This is an important distinction, because here is where the legal definition comes into play. It is critical that we aren’t blinded by this illusion of calling it a “gift,” when it isn’t.

Why It’s Illegal

As soon as you are in “dessert” and receive money, you are perpetuating an “endless chain scheme.” In California, the “endless chain scheme law” governs this. If you are caught, you will be charged with fraud, theft and operating an endless chain scheme, all of which are felony crimes (See CA DOJ site  and the CA.gov legal guide). While you do have to worry about tax evasion, the criminal charges for that are much less significant. Women participating in Gifting Circles are going to prison for fraud and theft, not just for tax evasion. Two women on the East Coast were convicted in May 2013 and are now going to prison for 14 years for reaching “dessert.” The Justice Department is investigating this further and because of pressures to not “blow the whistle,” the FBI is now involved. Here are some news stories about other women who have faced criminal charges:

“Gifting Circles” Are Not a Sustainable Alternative to a Sick Economy

Yes, our existing economic systems are exploitative, unsustainable and we need new alternatives. Gifting Circles are NOT a sustainable alternative. But there are a number of emerging money systems that are regenerative, representing a sacred connection to Earth; community exchanges, local currencies, etc. These systems have a fair exchange with the idea of reciprocity at the core. A pyramid system, like the “Gifting Circle” is one of the most exploitative systems out there. Many women who participate are seeking alternatives to our screwed economic system. I am too. But it’s critical to understand how these systems work. A pyramid scheme is even worse than the fractional reserve system (for example). It’s not just creating money out of thin air to benefit a few, it’s literally stealing from the women who come in later. If you want to better understand new models of fair, conscious and sustainable economics, please read Divine Right of Capital by Marjorie Kelly or Sacred Economics by Charles Eisenstein. Both authors make these concepts simple to understand and offer the kind of economy that a true shift in consciousness would produce.

Does the government have the right to tell me where I can invest my money?

Actually the government does have this right. We all have the right to stick out or fist, but the person next to you has the right to not be hit in the nose by your fist and the government’s role is to balance this conflict of rights. Many have argued for minimal government involvement in markets or “investment decisions,” but in doing so makes the assumption that everyone has equal access to information. The problem is that with the “Gifting Circles” most people involved don’t know that they only have a 12% chance of a return on investment. This is a definite “lack of information,” or a non-disclosure of risk, also called fraud.  When someone loses his or her shirt on an investment, it costs the government money (in lost tax revenue or financial support).  It also hurts local economies and communities. This is why anti-fraud laws or endless chain scheme laws are in effect.

My request to all of you

I am only asking you to think clearly and open your heart. I want your help in designing and birthing new economic systems (please comment with your ideas and suggestions). As women, we are tasked with midwifing the birth of a new consciousness – a more balanced consciousness that embraces the sacred feminine and masculine. As a society (men and women) we are tasked with bringing more of the flow of giving and receiving into our economy. This needs to be done in a balanced and harmonious way. We need an Earth-based economy; one that is in alignment with the natural rhythms of ecosystem regeneration (very slow rate of return). Our economy is far from sustainable and if we continue at this rate of growth will eventually collapse. We need to build new models, but in order to do so, it is important to understand why the existing models don’t work. The reason why the Gifting Circle’s 800% return doesn’t work is that it isn’t in alignment with the rate of regeneration of Earth.

To build a new model for sustainable economics, the core tenets of permaculture are a great place to start:

  • Care of the earth: Provision for all life systems to continue and multiply. This is the first principle, because without a healthy earth, humans cannot flourish.
  • Care of the people: Provision for people to access those resources necessary for their existence.
  • Return of Surplus: Reinvesting surpluses back into the system to provide for the first two ethics. This includes returning waste back into the system to recycle into usefulness. This also includes the fair redistribution of wealth (not 100% equal), but fair.

I am committed to the economic empowerment of women and all people on Earth. This needs to be done in a sustainable and just way. This is why I am writing this story. The key to empowerment is information. Women need good information to understand why these “gifting circles,” among other sick economic systems, hurt other women. I am giving you this information freely as a gift. I expect only love and gratitude in return. Feel free to share it with as many women you know. If you are interested in learning more about sustainable Earth-based economics, look for my next blog post.

Thank you for taking the time to read my blog.

– Amber

10 thoughts on “Gifting Circles – Building Sustainable Alternatives

  1. Amber! I am so grateful for your lucid and no-nonsense explanation of a very tricky subject. I know the social ramifications of “Circle” are quite complex and confusing as well. something I can testify to personally.

    Mostly, I have been quite concerned as many of my dear friends in “Circle” have shut out the concerns even of their partners and best friends, under the pretense that they are “too linear,” or “stuck in scarcity mentality.” This sealing off from feedback (called “social hygiene” by one of my Circle friends) is the very definition of a vicious cycle, a system in runaway mode and destined for collapse.

    Here is the link to an article I wrote entitled “Seeking the Sacred in Women’s Empowerment Circles”, in which I critique Circle based on Living Systems Theory and Sacred Geometry.

    I welcome feedback on this article, and encourage folks to share wherever appropriate.

    Thanks again for your tireless dedication to illuminating the shadow sides of “Circle.”

    Nala Walla
    Port Townsend, WA

    http://ecosomatica.wordpress.com/2013/07/28/womens-gifting-circles-sacred-economy-or-pyramid/

  2. Amber! I am so grateful for your lucid and no-nonsense explanation of a very tricky subject. I know the social ramifications are quite complex as well. something I can testify to personally.

    Mostly, I have been quite concerned as many of my dear friends in “Circle” have shut out the concerns even of their partners and best friends, under the pretense that they are “too linear,” or “stuck in scarcity mentality.” This sealing off from feedback (called “social hygiene” by one of my Circle friends) is the very definition of a vicious cycle, a system in runaway mode and destined for collapse.

    Here is the link to an article I wrote entitled “Seeking the Sacred in Women’s Empowerment Circles”, in which I critique Circle based on Living Systems Theory and Sacred Geometry.

    I welcome feedback on this article, and encourage folks to share wherever appropriate.

    Thanks again for your tireless dedication to illuminating the shadow sides of “Circle.”

    Nala Walla

    http://ecosomatica.wordpress.com/2013/07/28/womens-gifting-circles-sacred-economy-or-pyramid/

  3. If you don’t know who the first woman was–since no, ” no one knows who she is” then how do you know how or the amounts are factual? I appreciate the slideshow and the information. You are basing your figures on something that can’t be verified by any sources.

  4. Thank you Amber for your beautiful wisdom. I have heard of this before and it really concerned me. I understand the urge and need to find help from other sources especially financially. I also understand the need to feel connected, supported and part of something encouraging. The key is to evoke empowerment within ourselves. The best way to do this is by accomplishing something we can be proud of! And true friends are there for you not out of gain but out of love. That’s why i joined an amazing company that allows me to build my own business, embrace mentorship and help others naturally along the way. It is not a get rich quick scheme, it takes hard work, but all things worth while don’t come easy. But what feels great is to know you are part of something far bigger then yourself and the empowerment to build something for yourself. If anyone is struggling and looking for options please check out my website. http://www.ylscents.com/stacyfleming With this opportunity you can truly create something to be proud of that is fully sustainable and can be passed on to your family to continue to grow into the future! I wish for all women to truly believe in there self worth and highest potential! Step up, stand tall and take action. Start working towards real change for your health, relationships, family and financially. Love to all :)

  5. Hi Amber,
    Thank you for your write. If these circles have been going for 30 years how is this hurting people?
    It has been working well for 30 years. Im not sure I understand your concern?
    I re read your math and am having a hard time following .

  6. Pingback: What Would You Do?

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