Benefits Data Trust is leaving employees and supporters in the dark over its abrupt closure

Leaders at Benefits Data Trust, a Philadelphia nonprofit with a national reputation for helping people obtain government benefits, expected 2024 to be a break-even year financially, according information presented to its board of directors in December.

Just six months later, on Tuesday, the board voted unanimously to wind down over the next two months — with no explanation other than saying that “a perfect storm of circumstances” led to the decision at the organization, which had $12 million in unrestricted reserves at the end of last year and expected $32 million in revenue this year.

The announcement stunned a nonprofit community in Philadelphia already reeling from other unexpected closures. Just three weeks ago, the board of the University of the Arts abruptly closed its doors, with no detailed disclosures about why the nearly 150-year-old Center City institution was leaving hundreds of employees and more than 2,000 students in the lurch.

The sudden closures of the two prominent, public charities, as well as the dire financial condition of Philadelphia human services nonprofit Resources for Human Development, have created a sense of chaos for some in the city’s nonprofit community.

“There is extraordinary human capital and capability and knowledge that are now out of the sector. It was valuable to fight against poverty,” Bill Golderer, president and CEO of United Way of Greater Philadelphia and South Jersey, said in an interview.

BDT received a $20 million no-strings-attached grant from MacKenzie Scott two years, giving the nonprofit the chance to “make the challenge of benefits access a thing of the past over the next decade,” then-CEO Trooper Sanders said at the time.

In 2021, BDT received a five-year, $4 million grant from Pew Charitable Trusts to increase its reach in the five-county Southeastern Pennsylvania region. The goal was for BDT to double its impact from the then-current level of 111,800 households in the region annually.

BDT has a program with Children’s Hospital of Philadelphia to help patients’ families sign up for public benefits. In the last 18 months, the program has helped 150 families, CHOP said.

There’s no law against nonprofits going out of business, but that does not diminish the public’s interest in the entity’s charitable assets, according to the Pennsylvania Office of Attorney General, which has a unit that oversees charities.

“When the failure of a charity is brought to our attention, we investigate its finances to ensure that the failure is not due to any actionable breach of fiduciary duties on the part of the board and/or executive staff members,” attorney general spokesperson Brett Hambright said in an email Wednesday.

“We also review to ensure that, if there are any remaining assets — including any restricted funds such as endowments and other remaining net assets after all creditors have been paid — are distributed to an appropriate successor,” he said.

No up-to-date information was available this week on BDT’s financial condition, such as how much of the $20 million from Scott remains. Attempts to reach the organization’s founder and board chair, Warren Kantor, were unsuccessful.

BDT told state regulators this week that the Aug. 24 shutdown will put 273 people out of work. In 2022, when it received the Scott grant, it had 340 employees. The company cut 43 positions late last year, 32 of them the elimination of unfilled jobs, according to the Dec. 8 memo from Sanders.

The BDT board ousted Sanders on June 11, replacing him with Wendy Starner, who had been chief financial officer.

Just a few days before that, Independence Blue Cross announced that it was working with BDT to help privately insured customers with prediabetes access benefits, such as food, childcare, housing, and utilities. That raises questions about how many people at BDT knew the organization was on the verge of collapse.

BDT worked around the country, often under contract with state agencies and health insurers — recently scoring a $2.75 million, two-year project in Dallas — but it still had deep relationships with Philadelphia and state agencies, such the Department of Human Services and the Department of Aging, generating thousands of applications annually.

Since 2008, BDT has worked with the city on a program, called BenePhilly, to help residents access government benefits like the earned income tax credit.

“It was great work, getting people extra dollars they don’t know about,” said Allan Domb, who advocated for the program when he was in City Council. “Every dollar we invested in Benefits Data Trust, I think the return was $10 to $12 of benefits back to our people.”

The Parker administration did not reply to an e-mailed request for details on how much the city pays BDT to help Philadelphians secure government benefits.