Last year the Pearson Charitable Foundation — the nonprofit arm of the largest education publishing company in the world — paid $7.7 million in fines to the state of New York after authorities found that it had broken state law by helping its for-profit parent. How? By helping it develop Common Core educational products and by paying travel expenses for potential clients to attend education conferences.
Nonprofit organizations are not supposed to be helping for-profit companies make money. Oops. The settlement between the foundation and New York Attorney General Eric T. Schneiderman said that the foundation had a “close working relationship” with Pearson. It said:
The Foundation’s staff has consisted of Pearson employees; the Foundation’s board was comprised entirely of Pearson executives until 2012; select Foundation programs have been conducted with the advice and participation of senior Pearson executives; and the Foundation continues to rely heavily upon Pearson Inc. for administrative support.
According to the settlement (see text below), Pearson used its nonprofit foundation to develop Common Core products in order to win an endorsement from a “prominent foundation.” A story by my Washington Post colleague Lyndsey Layton said that Pearson used the foundation to develop Common Core products, including courses, to win an endorsement from a “prominent foundation,” which happened to be the Bill & Melinda Gates Foundation, which was a prime funder of the Core from its creation.
Though foundation officials did not deny or admit the charges, they agreed to pay the fines. Now, nearly a year after the settlement, the Pearson foundation is closing. Here’s the statement on the Pearson foundation‘s Web site under the headline, “Thank You”:
On November 18, 2014, the Pearson Charitable Foundation’s Board of Directors publically announced the intent to cease Foundation operations and close the Pearson Foundation at the end of the year. This follows a decision by Pearson plc to integrate all of its corporate responsibility activities and functions into its business as a way to maximise social impact and to no longer fund the Foundation as the primary vehicle for its philanthropic and community activities.
The Pearson Foundation’s closing follows more than a decade of support to some of the world’s great teachers, schools, and non-profit organizations. Since its inception in 2003, the Pearson Foundation has contributed more than $130 million to improving learning opportunities and outcomes for young people and adults, and to supporting the aims of exemplary non-profit organizations to help identify, scale, and celebrate their important work. We are pleased that their work continues.
We thank these partners for their dedication, their lasting impact, and for their continued inspiration.
We also thank Pearson, the world’s leading learning company, and our many public and private partners for their financial support and for their sustained confidence in our mission over the years.
Even more, we thank the countless individuals—young people, teachers, program leaders, and learning experts—who have inspired us and more often than not offered their own time, talents, and interests to further the Pearson Foundation’s aims. We are grateful for their example, for the time we spent together, and for their lasting friendship, guidance, and support.
Here’s the text of the 2013 settlement: