December 28th, 2011

flamebusy

Fursuit "donation pool" pyramid scheme

I do NOT believe anybody involved in this is trying to be a scammer, I think they have the very best of intentions, but I nevertheless feel I need to warn the community about this, because some people might not realize the problems inherent in this kind of system.

What: The fursuit donation pool as posted about here: http://forums.furtopia.org/index.php?topic=42970 and here: http://www.thefurryforum.com/forums/index.php?topic=15359.0

To sum up, the idea is that you contribute a donation to the pool, which can be any amount of money. Donating gets your name added to the end of the list, and the money is used to buy fursuits for the people on the list, in order.

Why it's a bad idea: This is a pyramid scheme. So for starters it's technically illegal. But even without legal issues, it's still a bad idea.

Okay, if there were an infinite number of people willing to take part, it would be fine. Eventually everybody would be taken care of, even if anybody more than a couple of places down the list would have to wait a very long time. And in a points-based system where people can get "free money" very easily, this can also work, since plenty of people are willing to casually toss points into the pool. But people do not casually toss away large sums of money on a lark. And there is NOT an infinite supply of new people to keep this running. Eventually the wheels are going to come off and a lot of people are going to be left high and dry.

Let me explain.

Say it takes ten donations to pay for a fursuit. Person one goes first, and the nine people following him also donate, thus enabling person one to get a fursuit. Great, right? Well, now ten more people have to join to get person two a suit. And ten more after that to get person three a suit. Let's say the first ten all get their suits, but then everybody who wants to join this project has joins, and nobody else does. Ninety people who have put in money now get NOTHING. They get screwed. Well, that just means they need to get more people to join, right? But no matter how many people join, at some point the supply of new members will run out. Maybe this could become huge and everybody in the whole fandom joins in. Maybe a MILLION people will join, and a hundred thousand suits will be bought! That just makes the end result worse, since nine hundred thousand now get screwed over and get nothing.

And that's assuming a much, much, much larger contribution than is actually happening. In reality it's going to screw a lot more than nine people for every person who gets something.

Even if most of those who got their suits stuck around and put in additional contributions afterwards, it would never be enough to make up for the fact that nobody is paying in as much as the people at the head of the line are getting out. There is no free lunch and this kind of thing just doesn't work, plain and simple. It never has, it never will. The only way for this to not rip people off is for everybody to put in as much money as the value of what they get out, and if you're going to do that, why do you need an elaborate scheme to do so, just buy a fursuit! As soon as one single person gets more value out of it than they put in, somebody somewhere has to put in more value than they get out, end of story.

Please do not participate in this kind of scheme. It's a bad idea even if executed correctly, and it can go even worse if the person running it isn't meticulous about keeping track of the funds and applying them honestly.