Foundation for New Era Philanthropy

Foundation for New Era Philanthropy

Hundreds of charities and philanthropic donors were shocked when they saw the front page of the Philadelphia Inquirer on the morning of May 16, 1995. The headlines read, “A bankruptcy shakes world of charities.” The newspaper article referred to the criminal investigation of John G. Bennett, Jr. and his operation of the Foundation for New Era Philanthropy.

Bennett had raised over $354 million from 1,400 donors and generated fraudulent losses— calculated after the return of funds from early recipients—of $135 million. At the time of the collapse of New Era, it was considered to be the largest financial scandal in the history of American charities.

	New Era logo and letterhead used on promotional documents

Bennett’s scheme started in 1989 as an attempt to cover a bank kite. He used the original charitable donations he solicited from philanthropists to cover a series of bad checks he had written. He soon began offering individual benefactors a chance to double their gifts to charity. The funds to double their charitable contributions allegedly came from a group of wealthy “anonymous donors.” Bennett named the program New Concepts in Philanthropy. Later in the scheme, ministry groups, churches, colleges, museums, and small and major non-profit organizations were also told that their funds would be matched by the anonymous donors and returned after a three-to-nine month holding period in a “semi-escrow” Prudential Securities account. It was eventually revealed the anonymous donors never existed and New Era was nothing more than a nationwide Ponzi scheme in which Bennett paid original investors with money from later investors and covered shortfalls with his credit line. Bennett claimed brain damage from a car accident had pushed his devout Christianity into a state of “unchecked religious fervor” and caused him to commit the crimes.

Bennett’s mug shot and New Era offices in Radnor, Pennsylvania

On September 27, 1996, Bennett was charged in an 82 count indictment with mail fraud, wire fraud, bank fraud, false statements to the government, filing false tax returns, and money laundering. He pleaded no contest and turned over $1.5 million of the approximately $7.7 million he had siphoned from New Era funds and used for personal expenditures. He was sentenced to serve 12 years in prison.