Thread: U-Care South Africa - a good MLM?

I posted this on another forum about scams, but they aren't being particularly helpful. So I figured I'd see what the good people here have to say.

Im curious as to everyone's thoughts on U-Care, an unusual new system that has started in South Africa. New = 2 years old.
It has a pyramidical structure (akin to scams) but I'm fairly positive about it.

NOTE: This is only available in South Africa, and I haven't signed up yet. So if you feel that I'm trying to sell it - I'm not. I can't sell outside SA anyway.

At this point, I'm quite keen on it and don't consider it a scam unlike the others I've been pushed.
However, considering myself a reasonable skeptic, I want to get all the angles on it that I can from others that might recognise it's faults.

I was approached for an amway 'business opportunity' by a friend, and am still trying to wriggle out of it.
The next day I spoke to others about amway, and one of my friends (who also hate MLM typically) mentioned wanting to sign up with U-Care.

The concept
The concept is that most people never give to charity. They forget, or aren't interested or are disillusioned with where their money actually goes.
U-Care's slogan is 'The business of caring', which hints at what they're trying to achieve.

They're original purpose, and what attracts me, is that they're causing a lot of money to go to charity from people who likely would never have done so otherwise.

Why do they do it? Because they want to make some cash, or because they believe the scheme is a brilliant method of indirect fundraising for charities through their efforts.
Both types of people end up supporting the scheme, causing funds to go to needy causes on a monthly basis.

Oh, and their main website is here: http://www.ucare.co.za

First, let me say why I think it's 'good':

1. The 'product' is charity. In particular, a charity of your choice. Not some corporation (thinking amway). So far they've contributed about R4,500,000 to charity in a matter of 2 years. This is such a big thing, that many people sign up with no intention of making it a business. Currently they're providing R320,000 to charity every month. That's the price of a nice house. Each month.
2. No capital outlay and very low monthly cost (a third of a tank of petrol/gas in this country - R125)
3. Can resign at any time, no strings attached
4. This all means I don't feel bad about those under me who don't make any money. They're contributing to charity, and those who are working towards charity.
5. No target to reach or annual fees
6. You only earn up to 4 levels deep. Think about what that means - no kingpin millionaire on top.
7. The company has a completely open approach. No dodging of the facts. They lay it out the way it is. A spreadsheet available from their website shows where the money went. Audits done every 3 months.
   I've already made a spreadsheet to determine where the money comes from and goes to. The math seems to add up.
8. No promises of instant wealth. In fact, while they are interested in signing up the greedy, the numbers are quite reasonable and don't seem to be too good to be true. And they acknowledge that many people aren't making money. Usually because they just want to support a good thing.

The good points aside, my concerns about it:

• Even though it has a noble cause, it's still a zero sum game - meaning that money comes from people below you within the scheme (up to 4 levels).
  This itself doesn't bother me, because they're supporting a good thing anyway. But what concerns me is that the scheme will *eventually* run out of people to convince. Is it a problem? I don't know... this depends if all of the people at the bottom would quit and cause it to unravel. Hard to predict for sure, since it's a fundraising effort.
  [EDIT: I looked into this, and MLM's don't collapse when it saturates. They just become difficult to make money from. Usually making it a money-stealing game.]
• I don't like one or two charities. Obviously I won't choose them for my own money, but you are also contributing money to encourage the people immediately above you in the scheme to keep doing it. Like any other MLM I suppose. While this is fine, since you're helping them help charity, there are a handful of charities I don't like in their list. However I did work out that only R8,000 of that R320,000 is going there. I could also check that the people above me are not contributing to those charities (by asking them), which would make me feel better about it.

How it works (I've spent quite a lot of time looking into it, so this should be accurate)

A 20% portion of the monthly contribution goes to administration (they have about 20 employees and some offices. The amount seems reasonable to pay them when I do the math)

A minimum reserve amount of 20% goes to the charity. This is minimum, there's more which I'll explain in a sec)

A big chunk (60%) goes into the fund which pays for commisions and rewards. Essentially this is the motivation for the people above you to keep doing what they're doing (fundraising)

But, as I'll explain in a bit, a lot of people aren't earning their full commission. Whatever is left over from the fund goes into the charities again (increasing that original 20%)

Now to the nitty gritty cash making explanations
I left my original spreadsheet at home, but I'll do what I can here

When you join, you earn nothing. Zero. Squat.
At this point, you're just supporting a good thing (tm)

To make your first commission, you need to register a minimum of 3 people. When you do this, you get R10 per person - so R30 minimum.
That's about enough for a single lunch. Nothing impressive.

If you do this (get 3 people) within 30 days, you get a once off R100 to reward you.
The idea here is that you've received R130 which covers your first contribution anyway (if you're one of the greedy buggers who doesn't care about the charity anyway)

If one of these people get's a donor to sign up - you still only get your R30. Only once there are 3 more people on that second level, do you 'unlock' that level.
Each person on the second level earns you R20.
There might be some sort of once-off reward in getting a lot of people on your second level in a short period. I forget.

Then, just like level 2, there needs to be 3 people on level 3 to unlock it.
Each one on that level earns you R30.

And then the last level (4) is also unlocked with 3 people and earns you R15 per person.

By my calculations, once each one of your direct signups has unlocked their first level and each of their signups has done the same, you've caused about R1000 of charity per month that didn't exist before.

Once the next level has done the same, there's R3025 to charity.

As a commision and incentive to keep going, you are getting about R2200 per month if you have that kind of structure going.
That's about enough to pay for a car installment on a cheap(ish) car.
Or for your average south african who works as a mall security guard, or maid - about twice their current salary.

So clearly, the income from this could set poor people free and help thousands with charity.
In my case, it would be a nice side income, but instead of pocketing it, I'd be giving it direct to charity. For at least a year anyway.

If you really push this in a big way, you could get yourself 20 signups. If they all do 'so so', you get about R15000 a month.
Charity gets about R20000 a month. Enough to buy a top of the range Dell laptop (I should know, I have one )

Only one thing I haven't mentioned yet - rewards.
Well, I told you about the 30 day reward of R100.
But there's 'clubs' they came up with which provide you with extra monthly rewards.

Club 60 is if you have 6 people signed up and at least 60 people under you (I think it was). You get an additional 100 or 200 rand per month to motivate you more.

Club 100 and Club 120 are roughly the same, with more money given the higher you go.

Club 150 is the highest, and you get a R2000 monthly amount extra for having 20 direct signups, and a heck of a lot of people and charity each month.

Long story over... I'd love to hear people's thoughts.
The good, the bad, the general smartass comments?
Try to be unbiased though, please.

PS: I know about the newspaper coverage on this, and after reading their articles, and all the other responses to it - I also realise they did pretty very little research before talking total rubbish to the public