Thursday, February 6, 2014

Too Close Ties to Business Cost Foundation $7.7 Million

Lg-pfOver two years ago we noted that the Pearson Foundation, the charitable arm of major educational publisher Pearson, had allegedly paid for international trips by state education commissioners whose states did business with Pearson.    The NY Times recently reported that the Foundation has now had to pay $7.7 million to resolve an inquiry by New York Attorney General Eric Schneiderman into whether the Foundation had been inappropriately aiding its for-profit counterpart.  The funds will primarily go to 100Kin10, an effort to train more teachers in high-demand subject areas.  The Foundation also agreed to program and governance changes to reduce its ties to Pearson.  

According to the AG's press release, the inquiry focused not only on the international trips but also on whether the Foundation had been developing course materials aligned to the Common Core that Pearson then intended to sell commercially.  After the inquiry began, the Foundation sold the partially developed courses to Pearson for $15.1 million.  For its part, the Foundation's press release states that the Foundation fully cooperated with the investigation and always acted with the best intentions and in compliance with the law, but recognized that "there were times when the governance of the Foundation and its relationship with Pearson could have been clearer and more transparent."

Lloyd Mayer

http://lawprofessors.typepad.com/nonprofit/2014/02/too-close-ties-to-business-cost-foundation-77-million.html

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