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

BJU entrance (Picture: File)

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

The problem when you look at the court instance had been the refusal that is university’s allow interracial relationship or wedding among pupils, staff or faculty of this college, a guideline it offers since abandoned.

The conservative Christian university dropped its interracial dating ban in a nationwide televised interview with previous president Bob Jones III on CNN’s Larry King are now living in 2000. In 2008, last President Stephen Jones, great-grandson of evangelist and college 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 whilst the school’s fifth president in its 90-year history.

“Organizing being 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 had been suitable for BJU to look for its tax-exempt status considering that the college does not believe the jobs it once held about competition.

Pettit called the university’s racist policies an issue that is social wasn’t biblical.

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

Bob Jones University destroyed its taxation exemption after having a 13-year fight with the IRS over whether or not the university’s policies against interracial relationship precluded it as a non-taxable spiritual institution that is educational. The college didn’t acknowledge any students that are black 1971, 17 years after Brown vs. Board of Education. It then wouldn’t acknowledge any pupils who had been in a marriage that is mixed-race produced guidelines to prohibit students from interracial relationship.

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

The outcome happens to be cited times that are many the years. Of late, it arose within an change prior to the Supreme Court into 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 an elaborate intend to separate its company into two entities because of the college dropping underneath the umbrella of the primary school’s current non-profit status to reach its very own, based on college statements and company documents filed with all the sc Secretary of State in addition to IRS.

That existing nonprofit had been called Bob Jones Elementary class, Inc. until final might, with regards to ended up being 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 community that is BJU our congressional delegation,” Pettit stated.

The alteration didn’t require IRS approval because its primary college had been a nonprofit, although the college had formal communication and conversations because of the IRS, stated Randy web Page, BJU spokesman.

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

What this means

Up to now, if people of the city or alumni desired to subscribe to the college, their presents had been just income tax deductible should they provided to specific nonprofit hands associated with the college, such as for instance its scholarship investment, art museum or athletic foundation.

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

All the big gift ideas to your college recently, such as a $500,000 gift 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 to be tax-deductible, web web Page said.

“It helps whenever you’re attempting to raise cash for a business to possess a status that is tax-exempt” web Page said. “That clearly helps your development people, your development people and people in the neighborhood – organizations, people, alumni – making it better to subscribe to a nonprofit.”

The alteration wouldn’t affect pupils’ financial aid and wouldn’t influence employees, he stated.

The change amounts the playing field involving the college as well as other sibling institutions whenever trying to get grants, he stated.

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

That modification could prove crucial once the U.S. Department of Education has targeted colleges that are for-profit additional oversight in modern times and fined a few for-profit companies of universities beneath the national government, which led to universities like Corinthian university and ITT Technical Institute shutting down.

And even though the college runs debt-free and does not intend to accept financial obligation, it may possibly conserve through reduced rates of interest if it decided to undertake financial obligation, web Page said.

just How BJU will likely be organized

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

The assets that are university’s efficiently be split between your two businesses.

BJU, Inc. includes the university & most of their facilities, the art museum, elementary college and youngster development center. BJU Press authors will also come beneath the umbrella of BJU, Inc.

The arm that is for-profit of college – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners therefore the Bob Jones Academy middle and high schools.

The college will nevertheless be governed by its 25-member Board of Trustees. The board will appoint an innovative new eight-member board to govern Bob Jones Education Group.

The change procedure started in belated 2014 by having research of just how to attain income tax exemption. Final might 5, the Board of Trustees authorized the last arrange for pursuing taxation exemption together with management is trying to implement it since that time.

In addition, the college happens to be looking for local certification through the Southern Association of Biker Planet login Colleges and Schools Commission on Colleges. The university, that is detailed as an applicant for accreditation, notified the payment of its changes that are potential which wouldn’t influence its candidacy, Page said.

The college delivered SACSCOC along with its proposition policy for income tax exemption and there’s no noticeable improvement in governance, said Pamela Cravey, SACSCOC spokeswoman.

“The action had been an IRS matter and failed to represent a substantive modification,” Cravey stated,

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