Pearson’s Charity Settles to Pay Millions Over Misuse Accusation

December 15, 2013 Updated: October 8, 2018

NEW YORK—Pearson Charitable Foundation (PCF), a not-profit set up by education publisher Pearson, Inc., announced a $7.7 million settlement with Attorney General Charities Bureau on Dec. 13. 

An investigation, led by Attorney General Eric T. Schneiderman, revealed the charity used its funds to benefit Pearson, a violation of the law.

In 2010, Pearson decided to develop courses, textbooks, and software aligned with the Common Core, a set of learning standards adopted by 45 states intended to increase college and career readiness for students in the U.S.

But to raise money from other foundations and add credibility, Pearson instead gave money to the PCF to develop the materials, intending later to sell them commercially, according to the attorney general’s press release.

After the investigation began, PCF sold the unfinished materials to Pearson for $15.1 million.

“The law on this is clear: Non-profit foundations cannot misuse charitable assets to benefit their affiliated for-profit corporations,” Schneiderman stated in a press release.

PCF also funded a series of overseas conferences, in locales like Rio de Janeiro and Singapore. The conferences paid for U.S. school officials’ trips. Pearson had its sales people there as well.

Most of the settlement money will go to the 100Kin10 initiative that recruits and retains teachers and support them in instruction aligned with the Common Core.

As part of the settlement, PCF also agreed to more strict measures to prevent its activities from benefiting Pearson.

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