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’s been a lot more than couple of years into the creating, Bob Jones University announced Wednesday it might 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 situation had been the university’s refusal to enable interracial relationship or wedding among pupils, staff or faculty for the college, a guideline this has since abandoned.

The conservative Christian college dropped its interracial ban that is dating a nationwide televised interview with past 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.

Nevertheless the college hadn’t tried to reinstate its tax-exempt status until 2014 after Steve Pettit took over whilst 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 thought it had been right for BJU to find its tax-exempt status since the university does not think the roles it once held about battle.

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

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

Bob Jones University destroyed its income tax exemption after having a 13-year struggle with the IRS over whether or not the university’s policies against interracial relationship precluded it as a non-taxable spiritual institution that is educational. The college didn’t admit any students that are black 1971, 17 years after Brown vs. Board of Education. After that it wouldn’t acknowledge any pupils who had been in a marriage that is mixed-race created guidelines to prohibit pupils from interracial relationship.

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

The truth happens to be cited times that are many many years. Of late, it arose in a change ahead of the Supreme Court when you look at the Obergefell vs. Hodges choice, which legalized marriage that is gay. From then on choice, the IRS commissioner said 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 used an elaborate intend to divide its company into two entities utilizing the college falling beneath the umbrella of their primary school’s existing non-profit status to accomplish a unique, in accordance with college statements and company documents filed using the sc Secretary of State plus the IRS.

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

The restructuring arrived after “consultation with a lawyer and accountants with several several years of expertise in assisting tax 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 school had been a nonprofit, although the college had formal communication and conversations because of the IRS, stated Randy web web Page, BJU spokesman.

The university has become detailed as a 501(c)(3) nonprofit from the IRS internet site, stated Michael Dobzinski, IRS spokesman.

What it indicates

So far, if users of the city or alumni desired to subscribe to the college, their presents had been only taxation deductible when they offered to particular nonprofit hands regarding the college, such as for example its scholarship investment, art museum or athletic foundation.

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

A lot of the big presents to your college recently, such as for instance a $500,000 present from the Sargant Foundation in December and a $1 million gift that is anonymous final November, went toward its BJU Scholarship Fund, a nonprofit entity of this college.

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

“It helps whenever you’re attempting to raise cash for a company to own a tax-exempt status,” web web Page said. “That clearly assists your development people, your development people and the ones in the neighborhood – organizations, people, alumni – to really make it much easier to contribute to a nonprofit.”

The alteration would affect students’ n’t grants or scholarships and wouldn’t affect workers, he stated.

The change amounts the playing field involving the college along with other cousin institutions whenever trying to get funds, he said.

It moves BJU from a for-profit university to a nonprofit category with all the U.S. Department of Education, “which is generally identified more positively by the public,” Page stated.

That modification could show crucial given that U.S. Department of Education has targeted colleges that are for-profit additional oversight in modern times and fined a few for-profit systems of colleges beneath the national government, which triggered universities like Corinthian university and ITT Technical Institute shutting down.

And even though the college runs debt-free and does not want to accept financial obligation, it might possibly save yourself through reduced interest levels if it made a decision to undertake financial obligation, web web Page stated.

just How BJU is likely to be organized

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

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

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 also will come beneath the umbrella of BJU, Inc.

The for-profit supply regarding the university – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners therefore the Bob Jones Academy center and high schools.

The university will nevertheless be governed by its 25-member Board of Trustees. The board will appoint an innovative new eight-member board to govern Bob Jones Education Group.

The change procedure 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 income tax exemption while the management was trying to implement it ever since then.

At exactly the same time, the college happens to be looking 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 commission of its prospective modifications, which wouldn’t influence its candidacy, web web Page stated.

The university introduced SACSCOC using its proposition policy for taxation exemption and there’s no improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action had been an IRS matter and would not represent a substantive modification,” Cravey stated,

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