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

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

BJU entrance (Picture: File)

In a move that’s been significantly more than 2 yrs within the generating, Bob Jones University announced Wednesday it might regain its federal tax-exempt status on March 1, significantly more than three years following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

The problem into the court instance ended up being the refusal that is university’s allow interracial relationship or marriage among pupils, staff or faculty of this university, 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, past President Stephen Jones, great-grandson of evangelist and college creator Bob Jones, apologized for BJU’s past racial discrimination.

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

“Organizing being an entity that is tax-exempt something 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 find its tax-exempt status due to the fact college does not think the roles it once held about competition.

Pettit called the university’s racist policies a social problem that had not been 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 being a non-taxable spiritual academic organization. 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 who had been in a marriage that is mixed-race produced guidelines to prohibit pupils from interracial dating.

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 training overrode the university’s First Amendment liberties to spiritual free message.

The scenario was cited times that are many many years. Lately, it arose in a trade prior to the Supreme Court when you look at the Obergefell vs. Hodges choice, which legalized marriage that is gay. After that choice, the IRS commissioner said the agency will never target the tax-exempt status of spiritual organizations that oppose homosexual marriage.

It’s taken two-and-a-half years for BJU to perform the reorganization as it used a plan that is complicated divide its company into two entities utilizing the college dropping beneath the umbrella of its primary school’s current non-profit status to realize a unique, in accordance with college statements and company documents filed with all the sc Secretary of State therefore the IRS.

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

The restructuring came after “consultation with a lawyer and accountants with several several years of expertise in assisting taxation exempt organizations—as well as input from people in 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 aided by the IRS, stated Randy web web web Page, BJU spokesman.

The college is currently detailed being a 501(c)(3) nonprofit in the IRS web site, said Michael Dobzinski, IRS spokesman.

What this means

As yet, if users of the city or alumni desired to contribute to the college, their gift suggestions were just taxation deductible should they provided to specific nonprofit arms of this college, such as for example its scholarship investment, art museum or foundation that is athletic.

Donors couldn’t provide tax-deductible gift ideas to the university itself to aid with money promotions or even for college initiatives.

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

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

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

The alteration wouldn’t affect students’ financial aid and wouldn’t influence workers, he stated.

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

In addition it 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 companies of universities underneath the national government, which lead to universities like Corinthian university and ITT Technical Institute closing down.

And even though the university runs debt-free and does not want to accept financial obligation, it may possibly conserve through reduced rates of interest if it thought we would accept debt, web Page stated.

just How BJU will soon be organized

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 involving the two companies.

BJU, Inc. should include the university and a lot of of the facilities, the art museum, primary college and youngster 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 college will nevertheless be governed by 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 began in belated 2014 having research of just how to attain income tax exemption. Last might 5, the Board of Trustees authorized the plan that is final pursuing taxation exemption and also the administration happens to be attempting to implement it since that time.

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

The college offered SACSCOC using its proposition policy for income tax exemption and there’s no noticeable improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action ended up being an IRS matter and failed to constitute a substantive change,” Cravey stated,

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

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