After nearly a year of dismal news since the Pennsylvania-based Foundation for New Era Philanthropy declared bankruptcy, the hundreds of evangelical schools and charitable groups involved may soon see small rays of hope.
An attorney for Arlin Adams, the trustee representing those that lost money to New Era, recently told a bankruptcy judge that creditors could expect an "interim distribution" of assets from the failed foundation this summer.
The attorney did not say how much will be distributed, nor did he indicate the standards that will dictate the distribution.
According to accounting information released by the trustee, organizations lost $136 million when New Era failed. The trustee lists New Era's assets at about $33 million. The majority of the difference—$85 million—ended up in the hands of "net positive" nonprofits, meaning they were ahead in the game when the bankruptcy occurred. Princeton University, for example, invested no money with New Era, but received more than $2.2 million in grants.
The proposed solution of taking from those who gained from New Era and giving it to those who lost seems reasonable. But putting such a plan in place is not easy. Many organizations profiting from New Era spent the money and are unable or unwilling to pay it back. Some organizations have contended that they accepted money from New Era in good faith and feel under no obligation to return it.
The Grand Rapids, Michigan-based charity Baptists for Life is among a handful of organizations that have voluntarily relinquished New Era profits to the bankruptcy trustee. But the majority of "net positive" organizations are playing the waiting game. Wanting to make sure they are not the only ones to return the money, they are expecting ground ...1
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