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 significantly more than couple of years within the making, Bob Jones University announced Wednesday it might regain its federal tax-exempt status on March 1, significantly more than three years following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

The matter into the court case ended up being the refusal that is university’s enable interracial relationship or wedding among students, staff or faculty associated with college, a rule this has since abandoned.

The conservative Christian university dropped its interracial dating ban in a nationwide televised interview with previous president Bob Jones III on CNN’s Larry King Live in 2000. In 2008, last President Stephen Jones, great-grandson of university and evangelist creator Bob Jones, apologized for BJU’s past racial discrimination.

However the college hadn’t wanted to reinstate its tax-exempt status until 2014 after Steve Pettit took over while the school’s 5th president in its 90-year history.

“Organizing as being a tax-exempt entity is one thing BJU has had a need 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 suitable for BJU to look for its tax-exempt status due to the fact 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 as he announced the change towards the college Wednesday evening. “We are constructed of one bloodstream.”

Bob Jones University destroyed its income tax exemption after having a 13-year fight with the IRS over perhaps 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 admit any pupils who have been in a marriage that is mixed-race produced 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 since the government’s desire for eradicating racial discrimination from training overrode the university’s First Amendment liberties to spiritual speech that is free.

The actual situation happens to be cited often girlsdate for free com times through the years. Of late, it arose within an trade ahead of the Supreme Court within the Obergefell vs. Hodges choice, which legalized marriage that is gay. From then on choice, the IRS commissioner stated the agency wouldn’t normally target the tax-exempt status of spiritual institutions that oppose homosexual marriage.

It’s taken two-and-a-half years for BJU to achieve the reorganization given that it utilized a plan that is complicated divide its organization into two entities utilizing the college dropping underneath the umbrella of the primary school’s current non-profit status to quickly attain its very own, in accordance with university statements and organization documents filed with the South Carolina Secretary of State together with IRS.

That current nonprofit ended up being 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 several several years of expertise in assisting taxation exempt organizations—as well as input from people in the BJU community and 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 because of the IRS, stated Randy web Page, BJU spokesman.

The university happens to be detailed as a 501()( that is c) nonprofit from the IRS web site, stated Michael Dobzinski, IRS spokesman.

What it indicates

So far, if people of town or alumni desired to contribute to the college, their presents had been just taxation deductible when they offered to particular nonprofit hands regarding the college, such as for example its scholarship investment, art museum or foundation that is athletic.

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

Almost all of the big gift ideas towards the 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 college.

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

“It helps whenever you’re attempting 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 people in the neighborhood – organizations, people, alumni – to really make it simpler to subscribe to a nonprofit.”

The alteration wouldn’t affect pupils’ financial aid and wouldn’t influence workers, he said.

The change amounts the playing field amongst the university along with other sis organizations whenever trying to get funds, he stated.

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

That modification could show essential due to the fact U.S. Department of Education has targeted colleges that are for-profit additional oversight in the past few years and fined a few for-profit systems of universities beneath the federal government, which lead to universities like Corinthian College and ITT Technical Institute shutting down.

And although the university runs debt-free and does not intend to accept financial obligation, it may possibly save your self through reduced interest levels if it made a decision to undertake financial obligation, web Page stated.

just How BJU are going to be organized

On March 1, Bob Jones University, Inc. are going to 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 university’s assets will effectively be split between your two businesses.

BJU, Inc. should include the university & most of their facilities, the art museum, elementary college and youngster development center. BJU Press authors 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 and also the Bob Jones Academy middle and high schools.

The college will be governed by still 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 belated 2014 by having a scholarly research of how exactly to attain income tax exemption. Final might 5, the Board of Trustees authorized the final arrange for pursuing taxation exemption together with management happens to be trying to implement it ever since then.

At precisely the same time, the college is searching for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that is listed as an applicant for certification, 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 taxation exemption and there’s no improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action had been an IRS matter and failed to constitute a substantive change,” Cravey stated,

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

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