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

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

BJU entrance (Photo: File)

In a move that’s been a lot more than couple of years when you look at the creating, Bob Jones University announced Wednesday it could regain its federal status that is tax-exempt 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 within the court situation had been the university’s refusal to enable interracial relationship or wedding among pupils, staff or faculty associated with the college, 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 reside 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 desired to reinstate its tax-exempt status until 2014 after Steve Pettit took over given that 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.

In their very first ending up in the university’s Cabinet, Pettit said he thought it had been suitable for BJU to get its tax-exempt status as the college does not think the jobs it once held about competition.

Pettit called the university’s racist policies a social problem that had not been biblical.

“The Bible is quite clear,” Pettit stated as he announced the alteration to your college Wednesday night. “We are constructed of one bloodstream.”

Bob Jones University destroyed its income tax exemption after a 13-year struggle with the IRS over perhaps the university’s policies against interracial relationship precluded it as being a non-taxable religious academic organization. The college didn’t acknowledge any black colored pupils until 1971, 17 years after Brown vs. Board of Education. After that it wouldn’t acknowledge any pupils who had been in a mixed-race marriage and produced guidelines to prohibit pupils from interracial relationship.

The way it is rose to your Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status since the government’s desire for eradicating racial discrimination from training overrode the university’s First Amendment liberties to spiritual free message.

The scenario happens to be cited times that are many many years. Lately, it arose in a change ahead of the Supreme Court into the Obergefell vs. Hodges choice, which legalized marriage that is gay. 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 complete the reorganization since it utilized an intricate want to split its company into two entities with all the college dropping beneath the umbrella of its primary school’s current non-profit status to accomplish its very own, in accordance with college statements and company documents filed using the South Carolina Secretary of State together with IRS.

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

The restructuring arrived after “consultation with a lawyer and accountants with numerous several years of expertise in assisting taxation exempt organizations—as well as input from people of 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 formal communication and conversations using the IRS, stated Randy web web Page, BJU spokesman.

The university is currently detailed as being a 501(c)(3) nonprofit regarding the IRS site, stated Michael Dobzinski, IRS spokesman.

What this means

So far, if people in the city or alumni wished to contribute to the college, their gift suggestions had been just income tax deductible when they offered to specific nonprofit hands for the college, such as for instance its scholarship investment, art museum or athletic foundation.

Donors couldn’t offer tax-deductible gifts to the college it self to greatly help with money promotions and for college initiatives.

All of the big presents to your university 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 associated with college.

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

“It helps whenever you’re attempting to raise cash for a business to own a tax-exempt status,” web web Page stated. “That clearly helps your development people, your development people and people in the neighborhood – companies, people, alumni – to really make it better 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 involving the college along with other sibling institutions whenever trying to get funds, he said.

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

That modification could show crucial while the U.S. Department of Education has targeted colleges that are for-profit additional oversight in modern times and fined several for-profit companies of universities beneath the federal 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 might possibly conserve through lower interest levels if it made a decision to undertake financial obligation, web web web Page stated.

How BJU is going to be organized

On March 1, Bob Jones University, Inc. should 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 effortlessly be split amongst the two companies.

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 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 and also the Bob Jones Academy center and high schools.

The college 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 process started in belated 2014 with research of how exactly to attain income tax exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing taxation exemption additionally the management happens to be attempting to implement it ever since then.

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 listed as an applicant for certification, notified the commission of its changes that are potential which wouldn’t influence its candidacy, web Page stated.

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

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

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