Educational Testing Service

Founded in 1947, the Educational Testing Service (ETS) has become the world's largest tests and measurement company. Conceived by James Bryant Conant, president of Harvard, in the early 1940s, the original intent for ETS was to become an independent, nonprofit test developer for the American Council on Education (ACE), the Carnegie Foundation for the Advancement of Teaching, and the College Board. Henry Chauncey, an assistant dean at Harvard, became the first president of ETS and served in that capacity until 1970. ETS opened its doors in 1948 with 17 previously developed testing programs, 111 employees, and a budget of $1.8 million.

ETS perceives itself to have five broad areas of expertise: research, assessment and development, test administration, test scoring, and development and delivery of instructional products and services. As part of its corporate organizational structure, ETS has a governing board of 16 trustees from education and business venues. These trustees select ETS's president, establish policy, and determine long-term goals.

A change of direction, including diversification as indicated by three subsidiary companies, has been emerging at ETS following the selection in August 2000 of Kurt Landgraf as the fifth president of the organization. Landgraf is the first president of ETS who does not come from the ranks of educators, having previously served as chairman and chief executive officer of Dupont Pharmaceuticals. The business perspective brought to this organization by Landgraf is evident in the shift from a culture of academics to a culture of “the bottom line.” In fact, there are ongoing questions concerning ETS's position as a “nonprofit” entity. According to Landgraf, the SAT is still responsible for generating 75% of the company's surplus revenue.

In its 56th year as an organization, the ETS generated nearly $900 million in revenue in fiscal year 2003. In addition to the main nonprofit testing unit in Princeton, New Jersey, there are now several for-profit subsidiaries. ETS Pulliam provides educational software and professional development for assessments directed toward school improvement. Capstar's focus is on training, online distance learning, and development and administration of licensure and certification tests. This subsidiary steps outside of the education circle to provide these services to associations, businesses, government agencies, and institutions of higher education. Since ETS has a presence in nearly 200 countries, its third subsidiary, ETS Global BV, attempts to make their services and products more easily available to the European education communities. This group is headquartered in Utrecht, Netherlands. In addition, there are seven regional offices in the United States—three in California and one each in Washington, D.C., Texas, and Puerto Rico. There are nearly 2,800 full-time employees at ETS.

Although ETS administers approximately 11 million tests per year for multiple uses, their most highly recognized assessments include the SAT Reasoning Test and SAT Subject Tests, the PSAT, the Advanced Placement Program, the Praxis Series for teacher licensure, the Test of English as a Foreign Language (TOEFL), the Graduate Records Examination (GRE), [Page 325]the Graduate Management Admission Test (GMAT), the School Leaders Licensure Assessment (SLLA), and the National Assessment of Educational Progress (NAEP). Expanding its area of service to professional development of educators and a major producer of educational research, and with the advent of local school accountability and the No Child Left Behind (NCLB) legislation, ETS is now moving into the area of state tests for student achievement. This newest subsidiary is called ETS K–12 Works. They have also recently announced a collaborative arrangement with the International Society for Technology in Education (ISTE) focused on information and communications technology, literacy assessment, and professional development. Through the main company and its multiple subsidiaries, Landgraf has set a goal of attaining $1 billion in yearly revenue.

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