Tuesday, August 11, 2020
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Pearson’s nonprofit arm accused of for-profit activity

The Pearson Foundation, which is the nonprofit arm of the huge educational publisher and PARCC test developer, Pearson, will pay $7.7 million to settle accusations that it violated New York state laws by assisting in for-profit activities, the New York Times reports.

About $200,000 of that fine will go toward legal expenses, but the rest will go to the “100Kin10” project, which aims to train more teachers in certain subjects, like science, technology, engineering, and math, that are perceived as being in high demand.

“The fact is that Pearson is a for-profit corporation, and they are prohibited by law from using charitable funds to promote and develop for-profit products,” New York’s attorney general, Eric T Schneiderman, whose office filed the charges against the Pearson Foundation, said in a statement. “I’m pleased that this settlement will direct millions of dollars back to where they belong.”

Pearson denied any intentional wrongdoing but implied that some of the foundation’s activities may have crossed the line. Some of these activities included paying the way for educational professionals to attend conferences attended by Pearson employees who were promoting their educational materials. For example, the Pearson Foundation began working with the Bill and Melinda Gates Foundation to develop a series of courses aligned to the Common Core, and the attorney general discovered that the foundation had financed trips to Finland and Singapore so that US educators could meet with their foreign counterparts. After the investigation was launched, the foundation sold the courses to Pearson for $15.1 million, the Times reported.

Math problem: A nonprofit organization sells some course material they developed to their parent for-profit corporation for $15.1 million. Because the activity was against the law, repeatedly, the nonprofit organization has to pay a fine of $7.7 million. How much did the “nonprofit” organization profit from this illegal activity?

Which brings up another point about the work of the Pearson Foundation. I’m happy New York’s attorney general figured out that something wasn’t quite right, but I fear there’s another shoe about to drop here. People from the Pearson “Foundation” have been in schools for a few years now. Teachers have submitted lesson plans to them, and if it’s a public school, the teachers have given up their copyright interest in those lesson plans.

However, the lesson plans, if they belong to anyone, belong to the public. My sense is, in many cases, Pearson (the for-profit educational publisher) might be developing some of that material into courseware that they intend to sell in textbooks, workbooks, or behind an electronic paywall. Copyright law is very tricky, but someone should advise as to whether this type of activity would be a violation of federal law if teachers don’t give their explicit permission for corporations to make derivative works.

Anybody care to enter an opinion?

Paul Katula is the executive editor of the Voxitatis Research Foundation, which publishes this blog. For more information, see the About page.

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