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’s been a lot more than 2 yrs 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 matter within the court instance was the refusal that is university’s enable interracial relationship or wedding among pupils, staff or faculty of this college, a rule this has 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.

But the college hadn’t wanted to reinstate its tax-exempt status until 2014 after Steve Pettit took over since the school’s 5th president in its 90-year history.

“Organizing being a tax-exempt entity is one thing BJU has needed seriously to do for a long time,” 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 considering that the university does not think the jobs it once held about competition.

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

“The Bible is extremely clear,” Pettit stated while he announced the alteration towards the university Wednesday evening. “We are constructed of one bloodstream.”

Bob Jones University destroyed its tax exemption after having 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 institution that is educational. The college didn’t acknowledge any students that are black 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 produced guidelines to prohibit pupils from interracial relationship.

The way it is rose towards the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status as the government’s fascination with eradicating racial discrimination from education overrode the university’s First Amendment liberties to religious free speech.

The way it is happens to be 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 marriage that is gay. From then on choice, the IRS commissioner stated the agency wouldn’t normally target the tax-exempt status of spiritual organizations that oppose homosexual wedding.

It’s taken two-and-a-half years for BJU to perform the reorganization as it utilized a plan that is complicated divide its organization into two entities aided by the college falling beneath the umbrella of their primary school’s existing non-profit status to reach a unique, relating to college statements and company documents filed with all the sc Secretary of State plus the IRS.

That current nonprofit ended up being 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 numerous several years of experience with assisting taxation 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 was already a nonprofit, although the college had correspondence that is formal conversations because of the IRS, stated Randy web Page, BJU spokesman.

The college has become detailed as being a 501(c)(3) nonprofit in the IRS internet site, said Michael Dobzinski, IRS spokesman.

What this means

As yet, if people in the city or alumni wished to subscribe to the college, their presents had been just taxation deductible when they provided to specific nonprofit hands of this college, such as for instance its scholarship investment, art museum or athletic foundation.

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

Almost all of the big gift ideas to your college recently, just like a $500,000 present through the Sargant Foundation in December and a $1 million anonymous present announced last November, went toward its BJU Scholarship Fund, a nonprofit entity of this college.

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

“It helps when you’re trying to raise cash for a business to own a tax-exempt status,” web web Page stated. “That obviously helps your development people, your development people and those in the neighborhood – organizations, people, alumni – making it simpler to subscribe to a nonprofit.”

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

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

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

That modification could show crucial due to the fact U.S. Department of Education has targeted for-profit universities with additional oversight in the past few years and fined several for-profit companies of universities underneath the national government, which led to universities like Corinthian university and ITT Technical Institute closing down.

And although the college runs debt-free and doesn’t intend to take on financial obligation, it might possibly conserve through lower interest levels if it made a decision to accept financial obligation, web web Page stated.

just just How BJU will likely to be organized

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

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

BJU, Inc. should include the university and a lot of 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. – should include the BJU Press, University Cleaners additionally the Bob Jones Academy center and high schools.

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

The change procedure started in belated 2014 by having research of simple tips to achieve taxation exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing taxation exemption therefore the management was attempting to implement it since that time.

In addition, the college happens to be looking for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, which can be detailed as an applicant for certification, notified the commission of its prospective modifications, which wouldn’t influence its candidacy, web web Page stated.

The college offered SACSCOC using its proposition arrange for taxation exemption and there’s no change 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 university as a not-for-profit, she said.


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