The first time I heard about Gifting Cirlces, I was sitting in the dentist’s chair getting my teeth cleaned. My dental hygienist was telling me about the one she was in.
I was her captive audience, as I sat wide-mouthed in the chair. She told me that the circles started during the Second World War, as a way for women to help each other when their husbands were off fighting overseas.
The concept sounds simple:
- One woman in the middle.
- Two women in the next outer circle.
- Four women in a third circle.
- Eight women in the outer circle.
Here’s a visual:
When you join a circle, you “gift” $5000 in cash to the woman in the centre. Upon receiving her gift, the woman leaves the circle. Then the group splits in half. Each of the other two then becomes the centre of her own circle. When eight more women are added, she accepts a cash gift of $5000 from each of them, for a total gift of $40,000. She then leaves the group and the circle splits again.
The idea is that everyone who joins the circle, ultimately leaves the circle with a cash gift of $40,000.
You can buy in again after you have left, but you have to move to the outer circle and contribute another $5000 each time you re-join.
I listened to the dental hygienist for almost a solid hour as she performed regular maintenance on my pearly whites. As she was finishing up, she said that if I was ever interested in investing, I could let her know and she’d get me an invitation.
I was intrigued. (I questioned whether the dentist knew that her hygienist was informally recruiting patients to this gifting circle. I suspect she didn’t, as she was busy in another area, filling teeth…)
Nevertheless, I was very, very curious. I loved the idea of women helping women. Having been raised by a single mother, I know how hard it can be for women to make ends meet from month to month.
There were elements of this that didn’t sit quite right with me…
- We were not supposed to tell the men closest to us about the circle. It is just for women.
- It had an element of mystery that I found as captivating as I did suspicious… No last names, no cheques. Cash only.
- There was an almost cult-like feeling… You must be “chosen” to take part in a gifting circle. This seemed to be a blatant appeal to my ego… I was suddenly special. I was “chosen”.
I didn’t join… but remained curious.
I’ve recently been invited to another “Gifting Circle”. They are also called “investment circles”, “gift clouds” or “gifting clouds”. This one is primarily targeted towards teachers.
“We are under paid, you know…” The person inviting me said. “The system won’t really help us get ahead… not financially, anyway. We have to help each other. This helps us build our financial literacy and become empowered as women. We teach our students how to shine their brightest, but we don’t always do the same for ourselves. The Gifting Circle helps us do just that… be the very best you can be.”
For me, these words are seductive. Phrases such as “build our financial literacy” and “become empowered” speak to my heart. They invoke a deep and visceral response of wanting to help my fellow woman, as much as myself.
But at heart, I am a skeptic. Before I put my $5000 in an unmarked envelope and headed to a meeting, my head took over and I began doing some research. Sadly, all I found was bad news:
- From Reader’s Digest – http://www.rd.com/advice/scam-artists-praying-on-women/
- From the Calgary Herald – http://www2.canada.com/calgaryherald/news/neighbours/story.html?id=d47a953f-70ec-4a28-9aed-930cd563593f
- A Lawyer’s Rant – http://lawyerrant.wordpress.com/favorite-scams/gifting-circles/
- A local Calgary woman’s perspective – http://prettyobsessedopinions.blogspot.ca/2009/11/women-circles-pyramid-scheme-or-easy.html
The article from the Calgary Herald was particularly poignant, as it talked about how these Gifting Circles can ruin friendships and professional relationships.
I am all about women building their financial literacy and learning how to develop personal leadership for themselves and their money. I am no longer convinced that joining a Gifting Circle is a way to help my fellow teachers… or that it will build my financial literacy.
Besides… who would want to risk losing a friend over an investment that might just constitute illegal activity? My teacher-friends are among those nearest and dearest to my heart. We often have lots in common when it comes not only to work, but also to our values, ethics and who we are as people. We are almost compulsively supportive of one another… in a really great way.
I wont’ be joining a gifting club or investment circle (or pyramid) any time soon. I will find other ways to support my fellow teachers this year.
What do you think? Have you ever heard of a “gifting circle”? Or an investment club for teachers? What was your experience?
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