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 (Picture: File)

In a move that is 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 decades following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

The problem when you look at the court instance ended up being the refusal that is university’s enable interracial relationship or wedding among pupils, staff or faculty associated with the university, a guideline this has since abandoned.

The conservative Christian college dropped its interracial dating ban in a nationwide televised interview with previous president Bob Jones III on CNN’s Larry King Live in 2000. In 2008, last 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 due to the fact school’s president that is fifth its 90-year history.

“Organizing being an entity that is tax-exempt one thing BJU has had a need to do for a long time,” Pettit stated.

In their 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 since the university does not think the roles 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 said as he announced the alteration towards the university Wednesday evening. “We are constructed with one bloodstream.”

Bob Jones University destroyed its taxation exemption after a 13-year christiancupid com login struggle with the IRS over perhaps 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. After that it wouldn’t acknowledge any pupils who have been in a mixed-race marriage and created guidelines to prohibit students from interracial relationship.

The scenario rose into the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status as the government’s desire for eradicating racial discrimination from education overrode the university’s First Amendment liberties to spiritual speech that is free.

The outcome happens to be cited several times through the years. Lately, it arose in a trade prior to the Supreme Court within the Obergefell vs. Hodges choice, which legalized homosexual marriage. From then on choice, the IRS commissioner stated the agency will never target the tax-exempt status of spiritual organizations that oppose homosexual wedding.

It’s taken two-and-a-half years for BJU to complete the reorganization given that it utilized a plan that is complicated divide its company into two entities with all the college dropping underneath the umbrella of their elementary school’s current non-profit status to quickly attain its very own, based on college statements and company documents filed using the South Carolina Secretary of State therefore the IRS.

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

The restructuring arrived after “consultation with a lawyer and accountants with numerous many years of expertise in 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 had been a nonprofit, although the college had correspondence that is formal conversations using the IRS, said Randy web web Page, BJU spokesman.

The college happens to be detailed being a 501()( that is c) nonprofit regarding the IRS site, stated Michael Dobzinski, IRS spokesman.

What this means

As yet, if people of town or alumni wished to subscribe to the college, their gift ideas had been just income tax deductible when they provided to particular nonprofit hands for the college, such as for instance its scholarship fund, art museum or athletic foundation.

Donors couldn’t provide gifts that are tax-deductible the college it self to support money campaigns and for college initiatives.

All the big gift suggestions towards the 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 the college.

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

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

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

The change amounts the playing field amongst the college as well as other sis institutions when obtaining funds, he stated.

In addition it moves BJU from the for-profit university to a nonprofit classification because of the U.S. Department of Education, “which is generally recognized more positively because of the public,” Page stated.

That modification could show crucial given that 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 beneath the national government, which led to universities like Corinthian College and ITT Technical Institute closing down.

And even though the college runs debt-free and doesn’t intend to accept financial obligation, it might possibly conserve through reduced rates of interest if it decided to accept financial obligation, web web Page stated.

Exactly just just How BJU is going to be organized

On March 1, Bob Jones University, Inc. is going 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 into the non-taxable BJU, Inc.

The assets that are university’s effortlessly be split between your two companies.

BJU, Inc. should include the university and a lot of of its facilities, the art museum, primary college and son or daughter development center. BJU Press authors will also come underneath the umbrella of BJU, Inc.

The for-profit supply for the college – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners and also 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 a brand new eight-member board to govern Bob Jones Education Group.

The change procedure began in late 2014 with research of just how to attain income tax exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing income tax exemption in addition to administration is attempting to implement it since that time.

On top of that, the university is searching for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that is detailed as an applicant for certification, notified the payment of their potential modifications, which wouldn’t influence its candidacy, Page stated.

The university offered SACSCOC along with its proposition policy 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 substantive modification,» Cravey said,

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

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