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

BJU entrance (Picture: File)

In a move that is been a lot more than couple of years into the creating, Bob Jones University announced Wednesday it can 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 had been the university’s refusal to enable interracial relationship or wedding among pupils, staff or faculty associated with the college, a guideline it offers 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 are now living 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 looked for 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 as a tax-exempt entity is one thing BJU has needed seriously to do for quite a while,” Pettit stated.

In the very first meeting with the university’s Cabinet, Pettit said he thought it had been 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 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 into the college Wednesday evening. “We are constructed of one bloodstream.”

Bob Jones University destroyed its taxation exemption after a 13-year fight with the IRS over whether or not the university’s policies against interracial relationship precluded it as a non-taxable spiritual 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 have been in a marriage that is mixed-race produced guidelines to prohibit pupils from interracial relationship.

The actual situation rose into the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status since the government’s fascination with eradicating racial discrimination from training overrode the university’s First Amendment liberties to religious free message.

The outcome happens to be cited times that are many the years. Most recently, it arose in a trade ahead of the Supreme Court into the Obergefell vs. Hodges choice, which legalized homosexual wedding. 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 given that it used an elaborate intend to divide its company into two entities using the university dropping underneath the umbrella of their primary school’s current non-profit status to obtain unique, in accordance with college statements and company documents filed using the sc Secretary of State while 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 “consultation with lawyer and accountants with numerous many 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 had been a nonprofit, although the college had formal communication and conversations because of the IRS, stated Randy web web Page, BJU spokesman.

The college has become detailed 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 desired to subscribe to the college, their gift suggestions had been just taxation deductible when they provided to specific nonprofit hands for the college, such as for instance its scholarship investment, art museum or foundation that is athletic.

Donors couldn’t offer gifts that are tax-deductible the college itself to simply help with money promotions or even for college initiatives.

All the big presents to your 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 regarding the university.

Now donors’ gift ideas will undoubtedly be tax-deductible, web web Page said.

“It helps when you’re attempting to raise cash for a business to own a status that is tax-exempt” web Page stated. “That clearly assists your advancement people, your development people and the ones in the community – organizations, individuals, alumni – to really make it much easier to subscribe to a nonprofit.”

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

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

Moreover it moves BJU from a for-profit college to a nonprofit category using the U.S. Department of Education, “which is generally sensed more positively by the public,” web web web Page stated.

That change could show crucial due to the fact U.S. Department of Education has targeted for-profit universities with added oversight in the last few years and fined a few for-profit systems of colleges underneath the federal government, which triggered universities like Corinthian university and ITT Technical Institute shutting down.

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

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 into the non-taxable BJU, Inc.

The assets that are university’s efficiently be split involving the two businesses.

BJU, Inc. includes the university & most of its facilities, the art museum, primary school and kid development center. BJU Press article writers will also come beneath the umbrella of BJU, Inc.

The for-profit supply of this university – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners as well as 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 an innovative new board that is eight-member govern Bob Jones Education Group.

The change procedure started in belated 2014 having a scholarly research of how exactly to achieve taxation exemption. Final May 5, the Board of Trustees authorized the last policy for pursuing taxation exemption while the management happens to be attempting to implement it ever since then.

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

The college provided SACSCOC having its proposition policy for income tax exemption and there’s no noticeable improvement in governance, said 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 college being a not-for-profit, she said.

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