This site describes the efforts of American students and other test-takers to encourage major educational testing companies to act with greater integrity and fairness. Most of these companies are considered non-profit organizations and have been granted special tax-exempt status by the IRS. They can - and should - be held to a higher standard of corporate responsibility. Founded on principles of corporate ethics and responsibility, AETR is dedicated to making sure every American test-taker is treated fairly by their testing company. Lend your support by taking a few seconds to sign our online petition.

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AETR REPORT CARD

ACT Inc                Grade: D

500 ACT Drive
Iowa City, IA 52243-0168

Contact ACT Inc at http://act.org/contacts/general.html

Introduction

ACT has so flagrantly abused the spirit of its supposedly non-profit mission that its status has come under investigation. The Iowa state Attorney General has recommended to the IRS that ACT Inc's non-profit status be reviewed in light of the overcompensation of its CEO and Board of Directors.

AETR is in no way affiliated with ACT Inc or any of its subsidiaries.

Mission Statement

"Helping people achieve education and workplace success."
   - From "About ACT"

Facts and Figures

Profit (Gross) $23 million   • 3.8% of Revenue
  • Profits are 139% of the industry average
CEO Compensation $734,538   • Richard L. Ferguson
  • Earning 978% of the industry average
Trustee Compensation (Avg) $40,577   • Total of 13 trustees/board members; 12 are paid
  • Does NOT follow IRS recommendations. (See how ACT Inc board member compensation compares with the industry)
Political Lobbying $130,082   • ACT Inc incurred these expenses while it "attempted to influence national, state, or local legislation, includ[ing] any attempt to influence public opinion on a legislative matter or referendum." (More about lobbying)

NOTE: Facts and figures are based on the ACT Inc tax filing (IRS Form 990) from 2007, the most recent records available. This document and other financial records are available for download below.

Specific Areas of Misconduct by ACT Inc

Common in the Industry

1) PROFITS.   A gross profit figure of 3.8% would be respectable for most for-profit companies. A non-profit company posting these kinds of profits is unacceptable. ACT either needs to charge less for its exams and other services, or relinquish its non-profit status.  Learn more about the Big 3's big profits.

2) EXORBITANT OFFICER COMPENSATION.   Richard Ferguson is being compensated a total of $734,538 per year. "Ferguson's base salary [alone] surpasses the $450,000 paid to the head of United Way of America, the country's largest nonprofit in 2006, as well as that of President Bush, who makes a base salary of $400,000. The average CEO salary for a similar company of the same size is $325,106, according to an analysis by Jim Brennan, a senior analyst at ERI Economic Research Institute" (Des Moines Register, 11 Nov 2007). ACT Inc's 11 executives are being compensated an average of $310,988 per year. These salaries are far too high for a non-profit company.  Learn more about the Big 3's exorbitant executive compensation.

3) PAYING DIRECTORS.   ACT is paying its Board of Directors a total of $496,500 per year - an average of $38,192 per Director. The vast majority of non-profit companies don't pay their Directors, the Directors are willing to volunteer their time for a good cause. In fact, the IRS specifically advises that directors not be paid.   Learn more about the Big 3's inappropriate compensation of governing board members.

4) SELLING TEST PREPARATION MATERIALS.   It is unethical for a testing company to sell test prep materials (see ACT Inc's official "ACT Test Prep" webpage) because it is morally and legally obligated to treat all test-takers fairly. Selling test materials only gives an advantage to wealthier students - ACT Inc should leave test preparation to unrelated for-profit companies.  Learn more about the Big 3's unethical sales of prep materials.

5) POLITICAL MANIPULATION.   ACT Inc spent more than $130,082 in 2007 on "direct" lobbying. This money was used to influence your legislators and government officials to adopt, and even require, ACT Inc tests for various educational and professional purposes. A company is given non-profit status in order to serve the public interest, not to covertly manipulate legislators in order to expand its monopoly position. ACT Inc needs to reign in its inappropriate manipulations of our government.  Learn more about how the Big 3 manipulate politics.

Criticism From Other Sources

•  FairTest.Org
"College Admissions Testing: The Real Beneficiaries." (Oct 2001)
http://www.fairtest.org/college-admissions-testing-real-beneficiaries

•  The Des Moines Register
"Nonprofit ACT board's pay near top in U.S." By Lee Rood (11 Nov 2007)
http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20071111/NEWS10/711110330/-1/archive

•  Diverse Education
"ACT Inc. Board, CEO Paid Higher Than Most Nonprofits." Associated Press (12 Nov 2007)
http://www.diverseeducation.com/artman/publish/article_10144.shtml

•  FairTest.Org
"IRS Investigation of Test-Maker Pay Sought." (Jan 2008)
http://www.fairtest.org/irs-investigation-testmaker-pay-sought

Finacial Records (PDF Format)


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