AG forces for-profit group to close its foundation
National Theatre for Children accused of using its nonprofit arm for financial gain.
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.