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 significantly more than couple of years into the creating, Bob Jones University announced Wednesday it would 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 matter within the court instance ended up being the university’s refusal to allow 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.

Nevertheless the college hadn’t desired to reinstate its tax-exempt status until 2014 after Steve Pettit took over once the school’s president that is fifth its 90-year history.

“Organizing as 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 absolutely was right for BJU to find its tax-exempt status as the college does not believe 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 quite clear,” Pettit stated as he announced the alteration towards the university Wednesday evening. “We are constructed of one blood.”

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 being a non-taxable religious academic organization. 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 produced guidelines to prohibit pupils from interracial relationship.

The way it is rose towards the 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 rights to religious free message.

The scenario is cited times that are many the years. Of late, it arose in an trade prior to 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 elaborate intend to separate its company into two entities using the university falling underneath the umbrella of its elementary school’s current non-profit status to attain a unique, in accordance with college statements and company documents filed with all the sc Secretary of State and also the IRS.

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

The restructuring arrived after “consultation with a lawyer and accountants with numerous several years of experience with assisting taxation exempt organizations—as well as input from users of 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 as being a 501()( that is c) nonprofit in the IRS site, stated Michael Dobzinski, IRS spokesman.

What this means

As yet, if people in the city or alumni desired to contribute to the college, their gift suggestions had been just taxation deductible should they gave to particular nonprofit hands of this university, such as for example its scholarship investment, art museum or athletic foundation.

Donors couldn’t provide gifts that are tax-deductible the college it self to aid with money promotions or even for college initiatives.

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

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

“It helps whenever you’re trying to raise cash for a company to own a status that is tax-exempt” web web web Page stated. “That clearly assists your development people, your development people and the ones in the neighborhood – organizations, people, alumni – making it more straightforward to subscribe 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 along with other cousin organizations whenever trying to get funds, he stated.

It moves BJU from a college that is for-profit a nonprofit category with all the U.S. Department of Education, “which is generally identified more favorably because of the public,” web web Page said.

That change could show essential while the 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 universities underneath the federal government, which lead to universities like Corinthian university and ITT Technical Institute closing down.

And even though the college runs debt-free and does not intend to accept debt, it may possibly save your self through reduced rates of interest if it decided to accept financial obligation, web Page stated.

just just How BJU is supposed to be organized

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

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

BJU, Inc. should include the university and a lot of of the facilities, the art museum, primary college and kid development center. BJU Press article writers will also come beneath the umbrella of BJU, Inc.

The for-profit supply of this college – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners therefore 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 a unique board that is eight-member govern Bob Jones Education Group.

The change procedure started in late 2014 having research of simple tips to attain taxation exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing taxation exemption and also the management happens to be trying 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, that is listed as an applicant for certification, notified the payment of their prospective modifications, which wouldn’t influence its candidacy, web web Page stated.

The college delivered SACSCOC along with its proposition arrange for taxation exemption and there’s no noticeable improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action ended up being an IRS matter and would not constitute a change that is substantive” Cravey stated,

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