Bob Jones University regains nonprofit status 17 years after it dropped discriminatory policy
BJU entrance (Picture: File)
In a move thatвЂ™s been a lot more than couple of years within the creating, Bob Jones University announced Wednesday it could 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 ended up being the refusal that is universityвЂ™s enable interracial dating or marriage among pupils, staff or faculty of this college, a guideline it’s since abandoned.
The conservative Christian college dropped its interracial ban that is dating a nationwide televised interview with previous president Bob Jones III on CNNвЂ™s Larry King reside in 2000. In 2008, last President Stephen Jones, great-grandson of evangelist and college founder Bob Jones, apologized for BJUвЂ™s past racial discrimination.
Nevertheless the college hadnвЂ™t desired to reinstate its tax-exempt status until 2014 after Steve Pettit took over since the schoolвЂ™s president that is fifth its 90-year history.
вЂњOrganizing as an entity that is tax-exempt one thing BJU has necessary to do for a long time,вЂќ Pettit stated.
In the first ending up in the universityвЂ™s Cabinet, Pettit said he thought it absolutely was right for BJU to get its tax-exempt status since the college does not think the roles it once held about battle.
Pettit called the universityвЂ™s racist policies a social problem that had not been biblical.
вЂњThe Bible is extremely clear,вЂќ Pettit said while he announced the alteration to your college Wednesday evening. вЂњWe are constructed of one bloodstream.вЂќ
Bob Jones University destroyed its income tax exemption after having a 13-year struggle with the IRS over whether or not the universityвЂ™s policies against interracial dating precluded it being a non-taxable spiritual institution that is educational. The college didnвЂ™t acknowledge any black colored pupils until 1971, 17 years after Brown vs. Board of Education. After that it wouldnвЂ™t acknowledge any pupils who have been in a mixed-race marriage and developed guidelines to prohibit pupils from interracial relationship.
The scenario rose into the Supreme Court, which ruled in 1983 that the IRS could revoke the universityвЂ™s tax-exempt status since the governmentвЂ™s desire for eradicating racial discrimination from training overrode the universityвЂ™s First Amendment legal rights to religious free message.
The actual situation happens to be cited times that are many the years. Lately, it arose in an trade prior to the Supreme Court within the Obergefell vs. Hodges choice, which legalized homosexual wedding. After that choice, the IRS commissioner said the agency wouldn’t normally target the tax-exempt status of spiritual organizations that oppose homosexual wedding.
ItвЂ™s taken two-and-a-half years for BJU to perform the reorganization since it utilized an intricate want to separate its company into two entities because of the college dropping underneath the umbrella of the primary schoolвЂ™s current non-profit status to accomplish its very own, relating to college statements and company documents filed with all the South Carolina Secretary of State and also the IRS.
That nonprofit that is existing called Bob Jones Elementary class, Inc. until final might, with regards to ended up being renamed BJU, Inc.
The restructuring arrived after вЂњconsultation with a lawyer and accountants with several many years of expertise in assisting taxation exempt organizationsвЂ”as well as input from people in the BJU community and our congressional delegation,вЂќ Pettit stated.
The alteration didnвЂ™t need IRS approval because its primary school had been a nonprofit, although the college had formal correspondence and conversations aided by the IRS, stated Randy web Page, BJU spokesman.
The college has become detailed being a 501()( that is c) nonprofit from the IRS internet site, stated Michael Dobzinski, IRS spokesman.
What it indicates
So far, if people in town or alumni desired to subscribe to the college, their gift suggestions had been just tax deductible when they provided to particular nonprofit hands of this university, such as for example its scholarship investment, art museum or athletic foundation.
Donors couldnвЂ™t provide tax-deductible gift ideas to the university it self to support money campaigns and for college initiatives.
All of the large presents to your college recently, 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 associated with college.
Now donorsвЂ™ gift ideas will likely to be tax-deductible, web web Page stated.
вЂњIt helps whenever youвЂ™re attempting to raise money for a company to possess a status that is tax-exemptвЂќ web Page stated. вЂњThat clearly helps your development people, your development people and people in the neighborhood вЂ“ organizations, people, alumni вЂ“ making it better to subscribe to a nonprofit.вЂќ
The change wouldnвЂ™t affect pupilsвЂ™ financial aid and wouldnвЂ™t influence workers, he stated.
The change amounts the playing field between your college along with other sibling organizations whenever obtaining funds, he stated.
It moves BJU from a for-profit university to a nonprofit category utilizing the U.S. Department of Education, вЂњwhich is generally sensed more positively by the public,вЂќ web web Page said.
That modification could show crucial while the U.S. Department of Education has targeted for-profit universities with 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 shutting down.
And although the college runs debt-free and does not want to accept financial obligation, it may possibly save your self through reduced interest levels if it thought we would accept financial obligation, web web Page stated.
Exactly just How BJU is organized
On March 1, Bob Jones University, Inc. should be renamed Bob Jones Education Group, Inc. and certainly will remain the universityвЂ™s taxable entity and will donate about half its assets towards the non-taxable BJU, Inc.
The universityвЂ™s assets will effortlessly be split between your two organizations.
BJU, Inc. should include the university & most of their facilities, the art museum, primary college and youngster development center. BJU Press article writers will also come beneath the umbrella of BJU, Inc.
The for-profit supply for the college вЂ“ Bob Jones Education Group, Inc. вЂ“ should include the BJU Press, University Cleaners plus the Bob Jones Academy center and high schools.
The university will be governed by still 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 a scholarly research of simple tips to attain income tax exemption. Final might 5, the Board of Trustees authorized the last policy for pursuing taxation exemption in addition to management was 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, which will be detailed as an applicant for certification, notified the payment of the changes that are potential which wouldnвЂ™t affect its candidacy, web Page stated.
The college delivered SACSCOC using its proposition policy for taxation exemption and there’s no noticeable improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.
“The action had been 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 stated.