Calculations show U. gaining from New Era

When the Foundation for New Era Philanthropy filed for bankruptcy last month, hundreds of organizations that invested with the group were facing a stark future. But the University may have been one of the lucky ones. According to recent calculations by Philadelphia Bankruptcy Trustee John Carroll III, the University may have actually ended up making $2.1 million from New Era. These figures are in direct contrast with the $1.5 million loss that University officials had originally projected. "The $1.5 million that we said earlier is the amount of money that the University currently has with New Era awaiting matching funds," University spokesperson Phyllis Holtzman explained. But she said the University cannot confirm the $2.1 million gain until it completes its own investigation, which is being conducted by Coopers & Lybrand. "This is what the trustee reported according to his calculations," Holtzman said. "But the University at this point can't really verify that for sure because we have our own audit going on and we really need to see how that all turns out." The firm will be investigating two major issues. "They are going to look at the University's procedures that led to this involvement with New Era," she said. "And they are also looking at this whole money issue to try figure out what the different funds represent." But even if Carroll's $2.1 million figure is accurate, the University may not have the money for long. Along with his bankruptcy figures, Carroll also released a set of rules, which might require organizations that made money from New Era to return some or all of their gains to help offset charities that were devastated. Holtzman said the University expects to return funds under the supervision of the courts. "But we don't know what amount or what time that would be," she said, adding that the University will not know its fate until the final accounting is complete. "We really expect that the court will be working on a fair formula and when all of that is complete, we will be returning some funds," Holtzman said. She added that she could not rule out the possibility that the University will take a loss as a result of investing with New Era. New Era, which is based in Radnor, Pa., with offices in London and Hong Kong, promoted itself as an innovative new charity capable of doubling nonprofit institutions' money by soliciting matching funds from a pool of anonymous wealthy donor, who supposedly relied on the charity to find worthy causes. Along with the University, hundreds of nonprofit organizations deposited their money with New Era, which said it would hold the funds for six months in brokerage accounts -- rather than in escrow -- and claimed to be investing it in certificates of deposit or treasury bills while finding matching donors. But John Bennett Jr., the charity's president, admitted to his staff last month that the anonymous donors did not really exist. Summer Pennsylvanian staff writer Josh Fineman contributed to this article.