Cash gifting is an act of giving gifts in the form of money and since it is a form of a gift, donors of such gifts are not supposed to expect anything in return. This is the essence of gift giving in its strictest sense. But it seems that the meaning of gift giving is almost tainted.
Leaders of organizations and clubs seem to encourage donors to make cash gifts and in return promise them that if they continually make donations, they too will become “captains” of the club in the near future.
But promises are made to be broken. When these clubs do not get enough members to financially support the organizations, operations get paralyzed and eventually the club collapses and all donated money is lost.
According to the Federal Trade Commission, clubs that encourage cash gifting are usually schemed in a manner that they are characterized as a pyramiding scam.
A pyramiding scheme is an organization that is highly unsustainable due to its full dependence on the enrollments of people into the group. When the group does not achieve the desired number of people joining voluntarily, financial income declines and eventually the organization goes bankrupt and disintegrates.
Cash gifting clubs usually follow the “8-Ball model” of many pyramids recognizing the importance of large number of people into the club. In order to achieve the required number of people to continue the operation, each person is encouraged to recruit two others who must each recruit two others and who must recruit two others. This is the “8-ball model”. Members near the bottom of the pyramid are called into the “gifting circles” with money that serves as a gift. These people usually are the victims when the pyramid collapses. When this condition transpires, only those at the top get away with a return and 88% of the members near the bottom of the pyramid have lost all their money.
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