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 a lot more than 2 yrs into the creating, Bob Jones University announced Wednesday it might 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 into the court situation had been the refusal that is university’s allow interracial relationship or wedding among pupils, staff or faculty associated with college, a guideline it offers since abandoned.

The conservative Christian college dropped its interracial ban that is dating 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 desired to reinstate its tax-exempt status until 2014 after Steve Pettit took over while 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 said.

In the meeting that is first with university’s Cabinet, Pettit said he thought it had been suitable for BJU to get its tax-exempt status due to the fact college does not think the jobs it once held about battle.

Pettit called the university’s racist policies an issue that is social had not been biblical.

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

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

The outcome rose into the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status as the government’s fascination with eradicating racial discrimination from training overrode the university’s First Amendment liberties to spiritual speech that is free.

The situation is cited several times through the years. Of late, it arose in a trade ahead of the Supreme Court into the Obergefell vs. Hodges choice, which legalized marriage that is gay. From then on choice, the IRS commissioner stated 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 achieve the reorganization since it used a plan that is complicated separate its company into two entities using the college dropping beneath the umbrella of the primary school’s current non-profit status to accomplish a unique, relating to college statements and company documents filed with all the sc Secretary of State and also the IRS.

That nonprofit that is existing 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 numerous many years of expertise in 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 school had been a nonprofit, although the university had formal communication and conversations utilizing the IRS, said Randy web Page, BJU spokesman.

The college happens to be detailed as being a 501()( that is c) nonprofit regarding the IRS internet site, stated Michael Dobzinski, IRS spokesman.

What it indicates

As yet, if users of the city or alumni desired to contribute to the university, their gift ideas had been just income tax deductible should they offered to specific nonprofit hands for the college, such as for instance 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.

Almost all of the big gift ideas to your college recently, such as 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 associated with the college.

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

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

The alteration wouldn’t affect pupils’ financial aid and wouldn’t affect employees, he stated.

The change amounts the playing field involving the college along with other sis organizations when obtaining funds, he stated.

In addition it moves BJU from a for-profit university to a nonprofit classification utilizing the U.S. Department of Education, “which is generally sensed more positively by the public,” web Page said.

That modification could show essential since the U.S. Department of Education has targeted for-profit universities with additional oversight in modern times and fined a few for-profit networks of colleges beneath the national 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 want to accept financial obligation, it might possibly save yourself through reduced interest levels if it thought we would accept financial obligation, web Page stated.

Exactly just How BJU will soon be organized

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

The university’s assets will efficiently be split between your two companies.

BJU, Inc. includes the university & most of their facilities, the art museum, elementary 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. – includes the BJU Press, University Cleaners while 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 unique eight-member board to govern Bob Jones Education Group.

The change procedure started in belated 2014 having research of how exactly to attain taxation exemption. Final might 5, the Board of Trustees authorized the last policy for pursuing taxation exemption in addition to administration is attempting to implement it ever since then.

At exactly the same time, the college happens to be searching for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that will be detailed as a candidate for certification, notified the payment of its changes that are potential which wouldn’t influence its candidacy, web Page stated.

The college introduced SACSCOC using its proposition policy for income tax 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 change,” Cravey stated,

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