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The College Board Nonprofit: Paying Bonuses to Its Officers– And More.

April 7, 2016

 

On March 28, 2016, Reuters reported that the SAT had been compromised in Asia more than the College Board has publicly acknowledged– and that the College Board used some portions of those exams anyway.

And Josh Horwitz of Quartz reports that the College Board does not plan to address the primary issue fueling the ability for the rampant cheating on the SAT overseas: Recycling of SAT exams.

It makes one wonder just how desperate the College Board is to profit financially on the SAT.

The College Board is a nonprofit, and so is its primary competitor for college entrance exams, the ACT. When former College Board president (and former West Virginia governor), Gaston Caperton, announced his resigning (retiring?) in March 2011, ACT was already commanding more of the college entrance exam market share.

Such market-share competition sounds like what one might expect from two for-profit businesses, not nonprofits.

However, there’s a lot of money to be made in running a nonprofit– especially one that specializes in assessment.

In an effort to get a better sense of the College Board, the Nonprofit, I have examined the College Board’s 990 tax forms from FY 2001 to FY 2014. I have linked to all 14 tax forms below, and I have included some interesting summary information from each year. (Note that some of the information presented varies due to changes in the 990 tax form itself over the years).

First, here are some of the more interesting finds:

  1. The year that he left College Board, the nonprofit was paying Caperton over $1.7 million in annual salary.
  2. His first full year as president (FY 2014), David Coleman’s compensation was roughly $700,000.
  3. Both Caperton and numerous other College Board officers received bonus and incentive pay as a regular part of their annual compensation. Caperton’s largest “bonus” generously exceeded $1 million.
  4. By 2014, the College Board’s lobbying expenses topped $1.7 million.
  5. By 2014, the College Board’s total end-of-year assets equaled $1 billion.
  6. The year that the Common Core was officially completed (2010), the College Board awarded Common Core co-owner, the Council of Chief State School Officers (CCSSO) its first grant, for $7,500.
  7. The year that College Board hired David Coleman to replace Gaston Caperton as president, the College Board awarded CCSSO the largest grant by far that is has awarded to date: $4 million.
  8. The College Board also awarded several grants to the other Common Core co-owner, the National Governors Association (NGA), totaling $180,000.
  9. The year that David Coleman was hired (and the same year of the $4 million CCSSO grant), the College Board awarded $70,000 to Common Core mouthpiece, the Thomas B. Fordham Institute.

In short, the College Board is the most lucrative nonprofit for its officers than any other whose tax forms I have read to date, and the timing of some of its grants bespeaks back-scratching among Common Core associated nonprofits.

As for the lobbying, it seems that the federal government agrees that the College Board is not lobbying “substantially.” And concerning its profiting off of its exams, some question whether the College Board is a “NINO”– or a “nonprofit in name only.”

The fact that its officers are eligible for more than just token bonuses makes me believe NINO fits the College Board.

And, of course, the College Board’s cutting corners by recycling its SAT exams even in the face of profound international cheating also points to its desire to make money. (Remember: higher profits; increased bonuses.)

According to its 990 tax forms, the College Board qualifies as a nonprofit (i.e., “charity status”) because it meets the following conditions:

An organization that normally receives (1) more than 33 1/3% of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions-subject to certain exceptions, and (2) no more than  33 1/3% of its support from gross investment income and unrelated business taxable income from businesses acquired by the organization after June 30, 1975.

According to its FY 2001 tax form, here is the College Board’s purpose, in brief:

TO PROVIDE SERVICES TO ASSIST STUDENTS IN MAKING THE TRANSITION FROM HIGH SCHOOL TO COLLEGE THROUGH AN ONGOING COLLABORATION OF ITS MEMBERS AND TO ENSURE UNIVERSAL ACCESS TO HIGH STANDARDS OF LEARNING, EQUITY OF OPPORTUNITY AND SUFFICIENT FINANCIAL SUPPORT SO THAT EVERY STUDENT IS PREPARED FOR SUCCESS IN COLLEGE AND WORK BY MEANS OF RESPONSIVE FORUMS, RESEARCH PROGRAMS AND POLICY DEVELOPMENT

Noble, indeed. And no mention of incredible salaries for officers– or of potential bonuses.

Below is the summary info from the College Board’s 990 tax forms for FY 2001 to FY 2014:

FY2001

Total revenue: $331 million (net assets: $136 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $126,255 to $156,844.

Gaston Caperton, president. Total annual compensation: $375,000 plus $46,000 “expense account and other allowances.”

17 officers were compensated a total of $2.6 million.

Total number of employees paid over $50,000: 183.

Total lobbying expenses: $190,825.

 

FY2002

Total revenue: $354 million (net assets: $155 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $142,622 to $253,957.

Gaston Caperton, president. Total annual compensation: $464,464 plus $42,500 “expense account and other allowances.”

23 officers were compensated a total of $4 million.

Related organization (collegeboard.com– for-profit corporation until 05/01/03) compensation: 4 officers compensated a total of $617,500.

Total number of employees paid over $50,000: 304.

Total lobbying expenses: $368,070.

 

FY2003

Total revenue: $388 million (net assets: $185 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $156,516 to $196,279.

Gaston Caperton, president. Total annual compensation: $478,547 plus $110,000 “expense account/other.”

22 officers were compensated a total of $5.2 million.

Total number of employees paid over $50,000: 459.

Total lobbying expenses: $329,031.

 

FY2004

Total revenue: $426 million (net assets: $230 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $160,956 to $211,769.

Gaston Caperton, president. Total annual compensation: $547,654 plus $110,000 “expense account/other.”

29 officers were compensated a total of $6.7 million.

Total number of employees paid over $50,000: 449.

Total lobbying expenses: $641,634.

 

FY2005

Total revenue: $485 million (net assets: $272 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $178,008 to $296,250.

Gaston Caperton, president. Total annual compensation: $598,779 plus $110,000 “expense account/other.”

28 officers compensated a total of $6.9 million.

Total number of employees paid over $50,000: 550.

Total lobbying expenses: $703,071.

 

FY2006

Total revenue: $546 million (net assets: $362 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $181,845 to $279,681.

Gaston Caperton, president. Total annual compensation: $636,901 plus $110,000 “expense account/other.”

32 officers were compensated a total of $7.8 million.

Total number of employees paid over $50,000: 644.

Total lobbying expenses: $762,368.

 

FY2007

Total revenue: $583 million (net assets: $442 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $164,200 to $208,906.

One former officer received $77,635 in compensation.

Gaston Caperton, president. Total annual compensation: $673,757 plus $125,000 “expense account/other.”

41 officers were compensated a total of $10.1 million.

Total number of employees paid over $50,000: 689.

Total lobbying expenses: $794,417.

 

FY2008

Total revenue: $621 million (net assets: $436 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $290,726 to $394,395.

Gaston Caperton, president. Total annual compensation: $707,290 plus $125,000 “expense account/other.”

16 officers were compensated a total of $5.4 million.

Total number of employees paid over $50,000: 830.

Total lobbying expenses: $1,345,393.

 

FY2009

Total revenue: $623 million (total end-of year assets: $551 million; net assets: $410 million).

Top five highest paid employees other than officers, directors, and trustees: salary ranged from $181,845 to $279,681.

Among top five highest paid independent contractors: ETS ($194 million) and NCS Pearson ($26 million).

Gaston Caperton, president. Total annual compensation: $872,061 ($89,355 of which is labeled as “bonus and incentive compensation” plus $41,690 “other”).

21 officers were compensated a total of $7.5 million.

Total lobbying expenses: $849,281.

 

FY2010

Total revenue: $660 million (total end-of-year assets: $625 million; net assets: $491 million).

Among top five highest paid independent contractors: ETS ($167 million) and NCS Pearson ($30 million).

Gaston Caperton, president. Total annual compensation: $1,270,768 ($537,658 of which is labeled as “bonus and incentive compensation” plus $198,274 “other”).

25 officers, directors, trustees, and highest compensated employees were paid a total of $10 million. (Among these, the top five highest paid employees other than officers, directors, and trustees: salary ranged from $353,801 to $435,929.

Total lobbying expenses: $725,985.

Also, CB started giving grants to other organizations, including $7,500 to the Council of Chief State School Officers (CCSSO).

 

FY2011

Total revenue: $721 million (total end-of-year assets: $736 million; net assets: $590 million).

Among the top five highest paid independent contractors: ETS ($195 million) and NCS Pearson ($38 million).

Gaston Caperton, president. Total annual compensation: $1,619,503 ($633,852 of which is labeled as “bonus and incentive compensation” plus $221,731 “other”).

24 officers, directors, trustees, and highest compensated employees were paid a total of $ 9.8 million. (Among these, the top five highest paid employees other than officers, directors, and trustees: salary ranged from $225,469 to $426,785.)

Total lobbying expenses: $742,460.

CB continued awarding grants to other organizations, including another $25,000 to CCSSO, and $20,000 to the National Governors Association (NGA).

 

FY2012

Total revenue: $759 million (total end-of-year assets: $767 million; net assets: $609 million).

Among the top five highest paid independent contractors: ETS ($250 million) and NCS Pearson ($29 million).

Gaston Caperton, president. Total annual compensation: $1,432,580 ($659,013 of which is labeled as “bonus and incentive compensation” plus $223,436 “other”).

23 officers, directors, trustees, and highest compensated employees were paid a total of $ 10 million. (Among these, the top five highest paid employees other than officers, directors, and trustees: salary ranged from $249,345 to $394,263.)

Total lobbying expenses: $954,353.

CB continued awarding grants to other organizations, including an additional $40,000 to CCSSO, and an additional $70,000 to NGA.

CB also now owns two corporations, Sequitur (recruitment services) in TX (end-of-year assets: $1.5 million) and MyRoad (guidance services) in DE (end-of-year assets: $291,656).

 

FY2013

Total revenue: $796 million (total end-of-year assets: $856 million; net assets: $699 million).

David Coleman becomes CB president effective October 01, 2012; compensated $117,518.

Gaston Caperton, president until 10/01/12. Total annual compensation: $1,798,882 ($1,147,739 of which is labeled as “bonus and incentive compensation” plus $203,048 “other”).

Among the top five highest paid independent contractors: ETS ($220 million) and NCS Pearson ($27 million).

22 officers, directors, trustees, and highest compensated employees were paid a total of $ 10 million. (Among these, the top five highest paid employees other than officers, directors, and trustees: salary ranged from $392,365 to $458,824.)

Total lobbying expenses: $1,102,739.

CB continued awarding grants to other organizations, including an astounding $4 million to CCSSO, and another $70,000 to NGA, and $70,000 to the Thomas B. Fordham Institute.

 

FY2014

Total revenue: $841 million (total end-of-year assets: $1 billion; net assets: $849 million).

David Coleman, president. Total annual compensation: $690,854 ($112,500 of which is labeled as “bonus and incentive compensation” plus $30,441 “other”).

“Redesigned SAT” is added to the statement of program service accomplishments, with the tag, “More than ever, these exams will be focused on the skills and knowledge evidence shows is necessary for college and career success.”

Among the top five highest paid independent contractors: ETS ($322 million) and NCS Pearson ($33 million).

23 officers, directors, trustees, highest compensated employees and former employees were paid a total of $ 9 million. (Among these, the top five highest paid employees other than officers, directors, and trustees: salary ranged from $264,383 to $811,863. The highest paid appears to have severance money included.)

Total lobbying expenses: $1,768,295.

CB continued awarding grants to other organizations, including another $20,000 to NGA for its “corporate fellows program.”

The College Board Nonprofit.

Money to be made there, sure enough.

hundreds

_______________________________________________________________

Coming June 2016 from TC Press:

 

school choice cover  (Click image to enlarge)

Stay tuned.

 

***

Schneider is a southern Louisiana native, career teacher, trained researcher, and author of the ed reform whistle blower, A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education.

She also has a second book, Common Core Dilemma: Who Owns Our Schools?.

both books

Don’t care to buy from Amazon? Purchase my books from Powell’s City of Books instead.

7 Comments
  1. leonie haimson permalink

    Most shocking to me is how the board members are paid high fees- very frowned upon for a in-profit.

  2. Christine Langhoff permalink

    So, the College Board is “evolving”.

  3. Laura H. Chapman permalink

    This is a real accomplishment in reporting. I just tried to find 990s for greatschools.org, operting with for-profit components and serving as a means to redline schools and districts, sell ads and “leases” to data, steer users of the website to specific schools, target parents and caregivers in high minority, high poverty districts. Extracting the key points and summarizing them as Mercedes has done takes a lot of time, patience.

    I note that a full service search for information of the kind Mercedes has done costs about $2400 a year. Checking up on the foundations shaping educational policies and also operating with significant profits should be institutionalized somehere.

  4. Noelle Green permalink

    Great Post. Thank you!

  5. It’s not quite as much, but still a lot: the National Center for Education and the Economy’s (NCEE’s) Marc Tucker makes half a million a year, according to NCEE’s form 990.

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  1. Mercedes Schneider Examines the Finances of the College Board | Diane Ravitch's blog

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