Christian Groups Get Financial Wake-Up Call
‘This could be bigger than the (Jim) Bakker and (Jimmy) Swaggart scandals,” an attorney with close ties to the philanthropic community tells me. He’s referring to the Foundation for New Era Philanthropy, an outfit that filed for bankruptcy protection last week after failing to deliver enough pots of gold to hundreds of museums, universities and religious groups that had bought heavily into its get-rich-quick scheme - only to find nothing left at the end of the rainbow.
In an alleged variation of the old pyramid game, New Era involved institutions as varied as the Academy of Natural Sciences in Philadelphia, the English Language Institute/China in San Dimas, Calif., and Focus on the Family, a major Christian ministry seeking greater influence within the Republican Party.
New Era said that if the organizations would invest $500,000 in cash, they would see their money doubled, tripled, even quadrupled in six months.
As my own financial adviser often says, “If it sounds too good to be true, it probably is.” Interest of 100 percent to 400 percent on a six-month loan is too good to be true - but that didn’t stop some people who should have known better.
Dr. James Dobson, president of Focus on the Family, says his organization invested $500,000 in New Era and received $1 million back after six months. Buoyed by such easy money, it rolled the dice a second time, putting up another $500,000. This time, it lost as New Era filed for bankruptcy protection, unable to meet the promised payments to the growing pyramid.
The Wall Street Journal estimates there are 300 unsecured creditors to which New Era owes $500 million. At least Focus on the Family broke even. Others were far less fortunate.
With refreshing candor, Dobson tells me: “He who would be rich falls into many a temptation or a snare. We should have known better. But we didn’t do this without a lot of investigation. We couldn’t find a flaw and suspected nothing until (New Era) started showing up everywhere.”
Charles Colson, president of Prison Fellowship, was allowed a special deal after his board had refused to put up any money. His organization placed its $500,000 in escrow until the profit was earned. So its money was protected when the pyramid crashed.
New Era’s chief executive, John G. Bennett, apparently knew all the right moves to gain the trust of non-profit organizations. People who met him say he didn’t drive an expensive car or wear flashy suits; he persuaded talented, educated people that several anonymous donors were backing New Era so there was nothing to worry about. Bennett, however, recently acknowledged that the donors do not exist.
What astounds is that so many evangelical Christian organizations could be duped. It is estimated as many as 120 of them entrusted more than $100 million to New Era. Apparently they ignored not only biblical proverbs about usury but also an English proverb that admonishes, “A fool and his money are soon parted.”
This latest financial scandal affecting people who should know that “the love of money is the root of all evil” ought to prove again the danger of building huge organizations with large overhead and payrolls that constantly must be fed from charitable resources. The competition among these organizations for dollars is intense. Some of the language in their fund-raising appeals grows increasingly apocalyptic as they vie to shake loose dollars that go into a seemingly bottomless pit.
When a crippled beggar outside the walls of Jerusalem’s Old City asked the Apostles Peter and John for money, Peter replied, “Silver and gold I do not have, but what I have I give you.” And they bid the man, in the name of Christ, to get up and walk.
Here’s a message that Christian ministries, which may be the biggest victims of New Era, should heed. It appears that money has become a problem for many of them, eclipsing their purpose and diluting the power of their message. Perhaps this shock will bring them to their senses.
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