AG forces for-profit group to close its foun­da­tion

Na­tional The­atre for Chil­dren ac­cused of us­ing its non­profit arm for fi­nan­cial gain.

Star Tribune - - AROUND THE METRO - By SHAN­NON PRATHER shan­non.prather@star­tri­bune.com Staff writer James Shif­fer con­trib­uted to this re­port. Shan­non Prather • 612-673-4804

The Min­nesota at­tor­ney gen­eral has com­pelled the own­ers of the for-profit Na­tional The­atre for Chil­dren (NTC) to dis­solve its as­so­ci­ated non­profit foun­da­tion af­ter al­leg­ing the busi­ness was us­ing the phi­lan­thropy for fi­nan­cial gain.

NTC own­ers and ex­ec­u­tives Ward and Mar­garet Eames signed a set­tle­ment with At­tor­ney Gen­eral Lori Swan­son, which was filed in Ram­sey County District Court this week. The cou­ple agreed to close the foun­da­tion within 60 days and agreed not to cre­ate any new non­profit en­ti­ties that would pro­vide char­i­ta­ble pro­gram­ming for busi­nesses where the Eam­ses hold more than a 3 per­cent own­er­ship stake.

The Eame­ses did not re­turn calls seek­ing com­ment. A spokesman for Swan­son’s of­fice said it looked into the mat­ter af­ter au­di­tors no­ticed red flags in some tax fil­ings.

NTC works with com­pa­nies and govern­ment agen­cies look­ing to use their phil­an­thropic dol­lars to de­liver a free ed­u­ca­tional or safety mes­sage to schoolchil­dren. NTC acts as a cre­ative mid­dle­man, writ­ing scripts, hir­ing ac­tors and cre­at­ing trav­el­ing shows that per­form in schools across the coun­try. High pro­file clients in­clude Cen­ter­Point En­ergy, Duke En­ergy, FIRST Lego League Ju­nior and the state of Iowa’s in­sur­ance di­vi­sion.

Ward Eames started NTC in his apart­ment around 1980, and by 2016 it had grown to a staff of 200 work­ing out of a 20,000-square-foot head­quar­ters in Golden Val­ley. The Eame­ses reg­is­tered the NTC Re­search Foun­da­tion as a non­profit with the state in 2009. Ward Eames served as pres­i­dent of the busi­ness and the foun­da­tion. Mar­garet Eames is the busi­ness’ di­rec­tor of fi­nance and had served on the foun­da­tion’s board.

Swan­son al­leged in court fil­ings that the foun­da­tion was formed for the fi­nan­cial gain of the for-profit com­pany and that the Eame­ses and the foun­da­tion’s board “breached trust and the du­ties of good faith, loy­alty, care and obe­di­ence.” Ward Eames, shown in 2016, is the pres­i­dent and founder of the Na­tional The­atre for Chil­dren.

Al­le­ga­tions in the court fil­ing in­clude: fail­ing to en­sure the proper ad­min­is­tra­tion and ex­pen­di­ture of char­i­ta­ble as­sets, out­sourc­ing foun­da­tion work to the busi­ness, fail­ing to fol­low con­flict-of-in­ter­est poli­cies and en­gag­ing in trans­ac­tions that were not in the best in­ter­est of the foun­da­tion. The fil­ing lists no spe­cific be­hav­ior or dol­lar amounts.

In 2015, the NTC Re­search Foun­da­tion re­ported $234,248 in con­tri­bu­tions and $362,989 in ex­penses. Ninety-six cents of ev­ery dol­lar spent was for con­tract work with the Eam­ses’ for-profit busi­ness.

The foun­da­tion listed among its ac­com­plish­ments work­ing with Best Buy to cre­ate ed­u­ca­tional events around tech­nol­ogy and with NBC Uni­ver­sal/Tele­mu­ndo to cre­ate fi­nan­cial lit­er­acy pro­gram­ming.

The foun­da­tion listed three board mem­bers, in­clud­ing Ward Eames.

RENÉE JONES SCH­NEI­DER • Star Tri­bune

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