Bob Jones University regains nonprofit status 17 years after it dropped discriminatory policy

Bob Jones University regains nonprofit status 17 years after it dropped discriminatory policy

BJU entrance (Photo: File)

In a move that is been a lot more than 2 yrs when you look at the generating, Bob Jones University announced Wednesday it might regain its federal tax-exempt status on March 1, a lot more than three decades following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

The matter into the court situation had been the university’s refusal to enable interracial relationship or wedding among students, staff or faculty of this college, a guideline it offers since abandoned.

The conservative Christian college dropped its interracial dating ban in a nationwide televised interview with previous president Bob Jones III on CNN’s Larry King reside in 2000. In 2008, last President Stephen Jones, great-grandson of university and evangelist creator Bob Jones, apologized for BJU’s past racial discrimination.

Nevertheless the college hadn’t wanted to reinstate its tax-exempt status until 2014 after Steve Pettit took over because the school’s fifth president in its 90-year history.

“Organizing as a tax-exempt entity is one thing BJU has had a need to do for quite a while,” Pettit stated.

Inside the very first ending up in the university’s Cabinet, Pettit said he thought it absolutely was suitable for BJU to get its tax-exempt status since the college does not think the roles it once held about competition.

Pettit called the university’s racist policies an issue that is social had not been biblical.

“The Bible is quite clear,” Pettit stated while he announced the alteration towards the college Wednesday evening. “We are constructed with one bloodstream.”

Bob Jones University destroyed its income tax exemption after a 13-year struggle with the IRS over whether or not the university’s policies against interracial relationship precluded it as being a non-taxable spiritual academic organization. The college didn’t acknowledge any black colored pupils until 1971, 17 years after Brown vs. Board of Education. After that it wouldn’t acknowledge any pupils have been in a marriage that is mixed-race developed guidelines to prohibit pupils from interracial relationship.

The scenario rose towards the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status as the government’s curiosity about eradicating racial discrimination from training overrode the university’s First Amendment liberties to spiritual speech that is free.

The truth was cited times that are many many years. Of late, it arose within an change prior to the Supreme Court within the Obergefell vs. Hodges choice, which legalized homosexual wedding. The IRS commissioner said the agency would not target the tax-exempt status of religious institutions that oppose gay marriage after that decision.

It’s taken two-and-a-half years for BJU to perform the reorganization as it utilized a plan that is complicated separate its organization into two entities because of the college dropping underneath the umbrella of the primary school’s current non-profit status to quickly attain its, based on college statements and organization documents filed with all the sc Secretary of State in addition to IRS.

That nonprofit that is existing called Bob Jones Elementary class, Inc. until final might, with regards to was renamed BJU, Inc.

The restructuring arrived after “consultation with a lawyer and accountants with numerous several years of expertise in assisting tax exempt organizations—as well as input from people in the community that is BJU our congressional delegation,” Pettit stated.

The alteration didn’t need IRS approval because its primary college had been a nonprofit, although the college had correspondence that is formal conversations with all the IRS, stated Randy Page, BJU spokesman.

The college happens to be detailed as being a 501()( that is c) nonprofit in the IRS web site, stated Michael Dobzinski, IRS spokesman.

What it indicates

So far, if people in the city or alumni wished to subscribe to the college, their presents had been just taxation deductible when they provided to particular nonprofit hands associated with college, such as for instance its scholarship investment, art museum or foundation that is athletic.

Donors couldn’t provide tax-deductible presents to the university it self to support capital promotions or even for college initiatives.

The majority of the big gift ideas towards the college recently, such as a $500,000 present through the Sargant Foundation in December and a $1 million gift that is anonymous final November, went toward its BJU Scholarship Fund, a nonprofit entity of this college.

Now donors’ presents will likely to be tax-deductible, web web Page stated.

“It helps whenever you’re attempting to raise cash for a company to own a tax-exempt status,” web web Page stated. “That clearly helps your advancement folks, your development people and people in the neighborhood – organizations, people, alumni – making it better to contribute to a nonprofit.”

The alteration wouldn’t affect pupils’ grants or scholarships and wouldn’t influence workers, he said.

The change amounts the playing field involving the college as well as other cousin organizations when trying to get funds, he stated.

It moves BJU from a for-profit university to a nonprofit category aided by the U.S . Department of Education, “which is generally observed more positively by the public,” web Page stated.

That change could show essential once the U.S. Department of Education has targeted colleges that are for-profit added oversight in modern times and fined a few for-profit companies of universities underneath the federal government, which lead to universities like Corinthian university and ITT Technical Institute shutting down.

And even though the university runs debt-free and does not intend to accept financial obligation, it might possibly conserve through reduced rates of interest if it made a decision to accept debt, web web web Page stated.

Exactly just How BJU will undoubtedly be structured

On March 1, Bob Jones University, Inc. should be renamed Bob Jones Education Group, Inc. and can remain the university’s entity that is taxable will donate approximately half its assets towards the non-taxable BJU, Inc.

The university’s assets will efficiently be split amongst the two companies.

BJU, Inc. includes the university & most of their facilities, the art museum, primary college and son or daughter development center. BJU Press article writers will also come underneath the umbrella of BJU, Inc.

The arm that is for-profit of college – Bob Jones Education Group, Inc. – includes the BJU Press, University Cleaners together with Bob Jones Academy center and high schools.

The college will be governed by still its 25-member Board of Trustees. The board will appoint a brand new board that is eight-member govern Bob Jones Education Group.

The change procedure started in belated 2014 having research of just how to attain taxation exemption. Final might 5, the Board of Trustees authorized the last policy for pursuing income tax exemption therefore the management happens to be attempting to implement it subsequently.

In addition, the college is searching for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that will be detailed as an applicant for certification, notified the payment of the possible modifications, which wouldn’t influence its candidacy, web web Page stated.

The university delivered SACSCOC along with its proposition arrange for taxation exemption and there’s no noticeable improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action had been an IRS matter and didn’t represent a change that is substantive” Cravey stated,

SACSCOC has considered the college as being a not-for-profit, she stated.