Hey, can someone take a look at this & tell me if they think it makes sense?

[Washougal_Otaku]

I got an e-mail from my mom recently, asking for my opinion.  I told her I thought it made no sense, and she called me a jerk for it.  Anyways, I'm wanting someone else to look at what she sent me.  Maybe one of you guys could either explain to me what I'm not seeing, or confirm that I'm correct about this.

"I'm so excited about this and I just couldn't wait to share it with you! A friend of mine from church told me about a way to help each other give and receive more cash into each others hands. This activity is nothing like I have ever seen before. It's designed to be a blessing to one another. Let me give you a brief run down on how it works.

"Step 1
Send a $2.00 gift amount to 3 people. (That's only $6.00 for getting the ball rolling!)
Receive $2.00 gift amounts from 14 other people. (These 14 people are fellow participants in this activity already.) This will give you $28.00.
Keep $7.00 Harvest for yourself and Hold $21.00 for step 2.

"Step 2
Send a $7.00 gift amount to the same 3 people as before. ($21.00 from step 1)
Receive $7.00 gift amounts from same 14 people as before. This will give you $98.00.
Keep $8.00 Harvest for yourself and Hold $90.00 for step 3.

"Step 3
Send a $30.00 gift amount to same 3 people from the $90.00 from step 2.
Receive $30.00 from same 14 people giving you $420.00.
Keep $120.00 Harvest for yourself and Hold $300.00 for step 4.

"There are 6 steps to complete our cycle. When we have reached the 6th step we will be giving to our 3 people a total of $250.00. We will be gifted $250.00 by the same 14 people giving us $3500.00. We would keep $2750.00 for our Harvest and send out $250.00 to the same 3 people. Then we just keep repeating the 6th step over and over!"

[StarryShay]

UMMM....what? ; 3 ;

[The_Geek]

Um, the general idea of paying it forward is nice. Why not do it with good deeds instead of money though? World not circulating through the monetary system, you know... 
*Is referencing the movie Pay It Forward... Really good movie*
The general idea fails in that you must have a system set up. This is basically just a pyramid scheme, people usually just stop when the money goes to them. Please don't fall for this, these kind of things end up in chainmail all too often...

[Washougal_Otaku]

That's the thing.  After calling me a jerk, my mom said that there's more she didn't tell me, including something about a forum, and not knowing all the details herself.  I think she's just loving this idea (in my opinion because she was told about it from a friend at church) so much that she doesn't see that, unless it's added from an outside force, these people in this "community" are just passing their money back and forth with each other, so that nobody really gains anything without somebody losing something.  I see no reason to be involved in this, and I'd like to understand why she thinks it's logical.

[NeonFoxRocks]

It's just based off the honor system, who's to say that at step 5 instead of recirculating the money you just keep it? Sounds like a scam where the people that will eventually drop out, win. Or people who can't find other people to give money to stop in the middle and can't progress and they lose all the money or again, just keep it. Sounds like a money grows on trees story. Either way your taking money from someone who will lose it, high class pan handling i suppose =)

[Washougal_Otaku]

Well, it's nice to see that I'm not the only person who sees it likes this.

[reppy]

http://en.wikipedia.org/wiki/Pyramid_scheme

[jaybug]

What he said. They are illegal. Join one and get a free trip to Club Fed.

[Washougal_Otaku]

Oh yeah, I remember hearing about those.  Thanks, Reppy.

[NeonFoxRocks]

It's pretty bad since it sounds like it's a church integrated pyramid scheme. They have so much faith in people and are easily persuaded =/

[Washougal_Otaku]

What's sad about that is both my mom and the guy who told her about this are usually skeptical people; all the more reason why I don't get where she's coming from.

[Washougal_Otaku]

So, I finally got more info from my mom about how this "works."  I think there's enough to make it sound perfectly legal, but I still don't see how this is supposed to work.

"What is private cash gifting?
Private gifting is a concept embraced by private groups of individuals and has been in existence for many years. Our private activity does not involve network marketing, multi-level marketing, or a business or commercial activity. There are no business transactions, investments and/or securities involved in this activity. There is no business or company name or location and there are no directors, officers, shareholders or principals. Individuals simply support each other in a team concept and help change lives.
"The concept of private gifting is based upon the fact that American citizens have the Constitutional right to gift property, cash and other assets, and are subject to the rules and regulations established by the laws. The U.S. gifting rules are found in the IRS Tax Code, Title 26, Sections 2501-2504 and 2511.
"The law states that one or more individuals can give a gift to another individual of up to $13,000 each per calendar year without any tax liability to either the giver or receiver of the gift, because the tax on the gift has already been paid. WE ARE NOT GIVING TAX ADVICE. Tax evasion is illegal.  Please consult a local CPA regarding whether your gifts are taxable. 

"Is this a pyramid?
"Not at all. A pyramid is associated with an investment scheme, a company or a business. We are not a company, just a private sharing club. We have zero sales quotas, we do not sell positions. Everyone gives the same gifts, works together in a team and has the potential of receiving the same gifts.

"How does Cash Gifting work?
"This activity is offered only by means of an exclusive one-to-one invitation. When someone accepts the invitation, they can move through a natural progression from the giving to the receiving stages of the activity. In this activity, there is no fixed hierarchy of individuals who have an advantageous position or unfair advantage over new participants."

There's also something they found from the IRS website that makes it sound like this can also be tax-deductable.  (At least I think that's what it was getting at, but I just kinda glanced at it).

[reppy]

I dunno.  Reminds me of the phrase, "If you say it's not about the money, it's about the money."  If you say it's not a pyramid scheme, it's a pyramid scheme.  ^_^

[jaybug]

It sounds like rationalizing committing an illegal act. Ask you mom if she like Walla Walla, or maybe the middle of the Columbia river. I don't know if you go to state prison, or federal. I don't do pyramid schemes.

[Washougal_Otaku]

Either way, it just seems so damn illogical.

[Cyprus]

Sounds like a scam to me...I have known people that got into pyramid schemes & this doesn't seem much different. I agree about it sounding illogical as well...then again, I feel that way about all of those pyramid scams lol.

[jaybug]

In the 80s pyramid schemes were popular with church lady types.

[kylite]

my opinion: There are the sheep, The sheppards, and the Wolves. People who fall for this are the sheep, people who perpitrate this are wolves, and those who put a stop to it are the shepards. So I ask you a simple question: which are you?

[Vexenification]

Um....how is that supposed to work? It makes no sense!

[superjaz]

yeah this says scam to me, and if they have an explanation about how its"not" a scam  then yeah scam

[HardstyleZombie]

looking at the wiki that Reppy posted its a scam.

Such schemes may try to downplay their pyramid nature by referring to themselves as "gifting circles" with money being "gifted." Popular schemes such as the "Women Empowering Women"[21] do exactly this. ~ 3rd paragraph of The "Eight-ball" Model