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 into the creating, Bob Jones University announced Wednesday it could regain its federal tax-exempt status on 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 instance had been the refusal that is university’s enable interracial relationship or marriage among pupils, staff or faculty associated with the college, a guideline it offers since abandoned.

The conservative Christian college dropped its interracial ban that is dating a nationally 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 university and evangelist founder Bob Jones, apologized for BJU’s past racial discrimination.

Nevertheless 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 a tax-exempt entity is one thing BJU has needed seriously to do for a long time,” Pettit stated.

In the very first ending up in the university’s Cabinet, Pettit said he believed 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 a social problem that was not biblical.

“The Bible is extremely clear,” Pettit stated as he announced the alteration into the college Wednesday evening. “We are constructed of one bloodstream.”

Bob Jones University destroyed its income tax exemption after a 13-year struggle with the IRS over whether or not the university’s policies against interracial dating precluded it being 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 admit any pupils who had been in a marriage that is mixed-race produced guidelines to prohibit pupils from interracial relationship.

The scenario rose towards the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status due to the fact government’s curiosity about eradicating racial discrimination from training overrode the university’s First Amendment liberties to spiritual speech that is free.

The way it is happens to be cited several times through many years. Of late, it arose within an trade ahead of the Supreme Court when you look at 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 achieve the reorganization because it utilized an intricate intend to separate its company into two entities aided by the college dropping beneath the umbrella of the elementary school’s current non-profit status to quickly attain unique, based on college statements and company documents filed with the sc Secretary of State additionally the IRS.

That current nonprofit had been called Bob Jones Elementary class, Inc. until last might, with regards to had been renamed BJU, Inc.

The restructuring arrived after “consultation with a lawyer and accountants with several 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 correspondence that is formal conversations with all the IRS, stated Randy web web Page, BJU spokesman.

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

What it indicates

As yet, if people in town or alumni wanted to contribute to the college, their presents had been just taxation deductible when they provided to specific nonprofit hands regarding the college, such as for example its scholarship investment, art museum or athletic foundation.

Donors couldn’t offer tax-deductible gift suggestions to the college itself to greatly help with money promotions or even for university initiatives.

All the big presents into the university recently, such as for instance a $500,000 present from the Sargant Foundation in December and a $1 million gift that is anonymous last November, went toward its BJU Scholarship Fund, a nonprofit entity regarding the college.

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

“It helps whenever you’re attempting to raise cash for a company to own a tax-exempt status,” web web web Page said. “That clearly helps your advancement people, your development people and people in the community – companies, people, alumni – making it simpler to contribute to a nonprofit.”

The alteration would affect students’ n’t financial aid and wouldn’t influence employees, he stated.

The change amounts the playing field between your college as well as other sibling organizations whenever trying to get funds, be naughty app he stated.

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

That modification could show crucial whilst the U.S. Department of Education has targeted colleges that are for-profit additional oversight in the last few years and fined a few for-profit companies of universities beneath 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 conserve through reduced rates of interest if it thought we would undertake financial obligation, Page stated.

Exactly just How BJU will undoubtedly be organized

On March 1, Bob Jones University, Inc. is going to be renamed Bob Jones Education Group, Inc. and can remain the university’s taxable entity and will donate approximately half its assets towards the non-taxable BJU, Inc.

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

BJU, Inc. should include the university & most of their facilities, the art museum, primary college and kid 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 together with 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 started in belated 2014 having study of simple tips to attain taxation exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing taxation exemption as well as the management happens to be trying to implement it ever since then.

In addition, the college is looking for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that is detailed as an applicant for accreditation, notified the commission of the possible modifications, which wouldn’t influence its candidacy, web web Page stated.

The college offered SACSCOC having its proposition arrange 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.

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