SharePoint Online: Allow Members to Edit Group Membership using PowerShell

Requirement: Configure SharePoint Online Group to manage membership by Group Members.

How to Allow Members of the Group to Manage Group?
Follow these steps to change the group settings of a group in SharePoint Online.

• Go to Site Settings >>  Click on "People and Groups" link
• Pick the group you want change the group settings from the left navigation.
• From the group page, Click on Settings >> Group Settings  in the toolbar.
• Under Group Settings, for "Who can edit the membership of the group?, set "Group Members" option.
  
• Click "OK" to save your changes.

PowerShell to Update Group Settings to Allow Members to Manage Group:

#Load SharePoint CSOM Assemblies
Add-Type -Path "C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\16\ISAPI\Microsoft.SharePoint.Client.dll"
Add-Type -Path "C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\16\ISAPI\Microsoft.SharePoint.Client.Runtime.dll"
    
#Config Parameters
$SiteURL= "https://crescent.sharepoint.com/sites/marketing"
 
#Setup Credentials to connect
$Cred = Get-Credential
  
Try {
    #Setup the context
    $Ctx = New-Object Microsoft.SharePoint.Client.ClientContext($SiteURL)
    $Ctx.Credentials = New-Object Microsoft.SharePoint.Client.SharePointOnlineCredentials($Cred.UserName,$Cred.Password)
    
    #Get All Groups of the Site
    $SiteGroups = $Ctx.web.SiteGroups
    $Ctx.Load($SiteGroups)
    $Ctx.ExecuteQuery()
 
    #Iterate through each Group - Exclude SharePoint Online System Groups!
    ForEach($Group in $SiteGroups | Where {$_.OwnerTitle -ne "System Account"})
    {
        #Update Group Settings: Who can edit the membership of the group? to Grop Members
        $Group.AllowMembersEditMembership = $True
        $Group.Update()
        $Ctx.ExecuteQuery()
        Write-host -f Green "Group Settings for '$($Group.Title)' Updated to Edit Membership by Group Members!"
    }    
}
Catch {
    write-host -f Red "Error Updating Group Settings!" $_.Exception.Message
}

PnP PowerShell to Change Group Settings:
To change a group settings to allow group member to edit group membership using PnP PowerShell, use:

#Variable
$SiteURL= "https://crescent.sharepoint.com/sites/marketing"
$GroupName ="Marketing Team Site Owners"

#Connect to PnP Online
Connect-PnPOnline $SiteURL -Credentials (Get-Credential)

#Set Group Settings
Set-PnPGroup -Identity $GroupName -AllowMembersEditMembership $True

To update group settings for all groups in a site collection, use:

#Variable
$SiteURL= "https://crescent.sharepoint.com/sites/marketing"

#Connect to PnP Online
Connect-PnPOnline $SiteURL -Credentials (Get-Credential)

#Get All Groups of the Site collection
$SiteGroups = Get-PnPGroup -Includes AllowMembersEditMembership

ForEach($Group in $SiteGroups)
{
    If($Group.AllowMembersEditMembership -ne $True)
    {
        Set-PnPGroup -Identity $Group -AllowMembersEditMembership $True
        Write-host -f Green "Group Settings for '$($Group.Title)' Updated to Edit Membership by Group Members"
    }
}

Similarly, to configure group settings all site collections in the tenant:

#Variable
$AdminCenterURL = "https://crescent-admin.sharepoint.com"

#Get Credential to connect 
$Cred = Get-Credential

#Connect to Admin Center
Connect-PnPOnline $SiteURL -Credentials $Cred

#Get All Site Collections - Exclude: Mysite Host, App Catalog, eDiscovery and Bot catalog Sites
$Sites = Get-PnPTenantSite -Detailed | Where { $_.Template -ne "SPSMSITEHOST#0" -and $_.Template -ne "STS#-1" -and $_.Template -ne "APPCATALOG#0" -and $_.Template -ne "EDISC#0"}
Write-host "Total Number of Sites:"$Sites.Count

ForEach($Site in $Sites)
{
    Try {
        #Connect to Site collection
        Write-host -f Yellow "Processing Site Collection:"$Site.URL
        Connect-PnPOnline $Site.URL -Credentials $Cred

        #Get All Groups of the Site collection - Exclude SharePoint Online System Groups!
        $SiteGroups = Get-PnPGroup -Includes AllowMembersEditMembership | Where {$_.OwnerTitle -ne "System Account"}
        ForEach($Group in $SiteGroups)
        {
            If($Group.AllowMembersEditMembership -ne $True)
            {
                Set-PnPGroup -Identity $Group -AllowMembersEditMembership $True
                Write-host -f Green "`tGroup Settings for '$($Group.Title)' Updated to Edit Membership by Group Members"
            }
        }
    }
    Catch {
        write-host -f Red "`tError Getting Site Collection!" $_.Exception.Message
   }
}