EducationWorks, Philadelphia nonprofit funded by public dollars, files for bankruptcy

EducationWorks, the government-funded after-school programming nonprofit in Philadelphia that has experienced a protracted, public collapse over the last few months, has filed for bankruptcy.

The Chapter 7 bankruptcy filing sheds light on a series of events that began in May when the nonprofit twice missed payroll, then laid off its staff, citing a “serious financial shortfall.” About the same time, CEO Miles Wilson died.

EducationWorks ran after-school programs at Philadelphia public schools and housed PowerCorpsPHL, a workforce development organization.

Chapter 7 bankruptcy allows for an organization’s assets to be sold in order to pay creditors. The nonprofit reported owing nearly $5 million to creditors, in its Aug. 24 filing. It reported nearly $3.6 million in assets.

Many of these creditors are employees who are owed back wages. EducationWorks owes $1 million to nearly 250 “priority” creditors, people whom The Inquirer has identified as former employees.

The nonprofit also reported owing $190,000 to Wilson’s estate, $250,000 to Lenfest Enterprises, and $2.4 million to the Reinvestment Fund, the latter from a loan made to EducationWorks in April, according to a lawsuit filed in July by the Reinvestment Fund.

» READ MORE: EducationWorks lays off 133 employees after CEO’s death, citing ‘serious financial shortfall’

EducationWorks’ interim board chair Marc Orlow, who signed the bankruptcy filing, did not respond to a request for comment.

For the last few months, EducationWorks representatives have told former employees and The Inquirer that workers had yet to be paid because the City of Philadelphia owed them money.

On the bankruptcy filing, EducationWorks cited a “dispute with Pennserve,” the state’s service commission, over payment from the City of Philadelphia.

“Corrective Action Plan (“CAP”) submitted timely but executive director failed to reply to calls,” the filing read. “Received a letter that CAP was not adequate without any explanation.”

Other outstanding payments include those from Philadelphia Works, a workforce development nonprofit, and Pennsylvania Commission on Crime and Delinquency’s antiviolence program, according to the filing.

The city said in July that it had stopped payments to EducationWorks but did not explain further. A city spokesperson said this week that nothing had changed since then.

Philadelphia Works said it had placed outstanding payments to EducationWorks in an escrow account, following legal guidance. “It is important to clarify that these payments will be held securely until there is an agreement between EducationWorks and its lenders,” said spokesperson Dawn Thomas.

EducationWorks also listed a dispute with Julia Hillengas, executive director of PowerCorpsPHL, the workforce development program that was housed within the nonprofit. According to the filing, Hillengas formed PowerCorpsPHL last December and took over a property leased by EducationWorks without its knowledge.

The bankruptcy filing accused Hillengas of “breach of duty of loyalty” as well as “defamation that caused loss of contracts and/or grants totaling over 8 million,” according to the filing.

Hillengas declined to comment.

In the fiscal year ending June 30, 2021, EducationWorks’ annual revenue was $8.4 million; its net income was about $500,000. More than 90% of its revenue came from city, state, and federal government, according to the tax filing.

In July, former employees filed a federal lawsuit against EducationWorks for not paying them the wages they were owed.

News researcher Ryan W. Briggs contributed to this article.