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

BJU entrance (Photo: File)

In a move that is been significantly more than couple of years within the generating, Bob Jones University announced Wednesday it might regain its federal status that is tax-exempt March 1, significantly more than three years following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

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

The conservative Christian college dropped its interracial ban that is dating 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 desired to reinstate its tax-exempt status until 2014 after Steve Pettit took over due to the fact school’s president that is fifth its 90-year history.

“Organizing being a tax-exempt entity is one thing BJU has needed seriously to do for quite a while,” Pettit stated.

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

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 to your university Wednesday evening. “We are constructed of one blood.”

Bob Jones University destroyed its income tax exemption after having a 13-year fight with the IRS over or perhaps a university’s policies against interracial dating precluded it being a non-taxable spiritual educational organization. The college didn’t admit any black 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 outcome rose to your Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status considering that 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 is cited often times through the years. Of late, it arose in a exchange prior to the Supreme Court within the Obergefell vs. Hodges choice, which legalized homosexual marriage. 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 given that it utilized an elaborate want to divide its organization into two entities with all the college dropping beneath the umbrella of its primary school’s current non-profit status to attain its very own, in accordance with college statements and company documents filed with all the sc Secretary of State as well as the IRS.

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

The restructuring arrived after “consultation with a lawyer and accountants with several several years of experience with assisting taxation exempt organizations—as well as input from people of the BJU community and 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 because of the IRS, stated Randy web web Page, BJU spokesman.

The college is currently detailed as being a 501()( that is c) nonprofit from the IRS site, stated Michael Dobzinski, IRS spokesman.

What it indicates

As yet, if people of the city or alumni desired to subscribe to the college, their gift suggestions had been just taxation deductible should they provided to particular nonprofit hands regarding the college, such as for instance its scholarship investment, art museum or athletic foundation.

Donors couldn’t offer gifts that are tax-deductible the college it self to simply help with money promotions or even for university initiatives.

All the big presents into the college recently, just like 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 associated with the college.

Now donors’ gift ideas will likely be tax-deductible, web web web Page stated.

“It helps whenever you’re attempting to raise cash for a company to possess a tax-exempt status,” web web web Page stated. “That clearly assists your development people, your development people and people in the neighborhood – organizations, people, alumni – to really make it much easier to subscribe to a nonprofit.”

The alteration wouldn’t affect students’ grants or scholarships and wouldn’t influence workers, he stated.

The change amounts the playing field involving the college along with other sis organizations whenever trying to get funds, he stated.

Additionally moves BJU from a college that is for-profit a nonprofit category aided by the U.S. Department of Education, “which is generally identified more positively because of the public,” web web Page stated.

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

And although the college runs debt-free and does not intend to accept financial obligation, it might possibly save yourself through reduced interest levels if it thought we would accept financial obligation, web web Page stated.

Exactly How BJU will likely to be organized

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

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

BJU, Inc. should include the university & most of its facilities, the art museum, elementary college and son or daughter development center. BJU Press article writers will also come beneath the umbrella of BJU, Inc.

The for-profit supply of this college – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners therefore the 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 unique eight-member board to govern Bob Jones Education Group.

The change procedure started in belated 2014 having a scholarly research of just how to attain tax exemption. Final might 5, the Board of Trustees authorized the last arrange for pursuing income tax exemption and also the management happens to be trying to implement it since that time.

The university has been seeking regional accreditation through the Southern Association of Colleges and Schools Commission on Colleges at the same time. The college, that will be detailed as an applicant for certification, notified the payment of its changes that are potential which wouldn’t influence its candidacy, web Page stated.

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

“The action ended up being an IRS matter and would not represent a change that is substantive” Cravey stated,

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