#bju501c3

[wutbju]

The students were pretty excited when BJU increased the on-campus wages to the federal minimum last March. 

But just for the record, based on information archived from BJU’s campus work program page, students earned $5.50/hour when BJU was a for-profit institution. 

A 32% wage increase when BJU became a 501c3? That’s about the tax rate. . . . 

[wutbju]

Pettit continues with a timeline. WutBJU mentioned this before, but let’s put it in context. 

In late 2014 the administration began conducting a feasibility study of how to achieve tax exemption. Updates were shared with the finance and executive committees of the Board of Trustees. On May 5, 2016, the Board approved the final plan; and implementation of this has been worked on ever since (the last two-and-a-half years, the finance team has been working on the plans).

So here’s what we know:

2014 May – BJU publishes a list for the Board of monetized property they need to sell.

2014 May 9 – Steve Pettit becomes President of BJU.

2014 Oct 10 – BJU applies for SACSCOC accreditation.

2014 “Late” – BJU administration begins tax exemption “feasibility study.”

2014 Dec 11 – GRACE report is released.

2015 May 1 — Steve Pettit announces to his employees that they are considering re-applying for tax exemption. Over the next two years, he states that they need to do this to “serve our donors better” and to discriminate against LGBTQ students.

2016 Jan 26-28 – SACSCOC Candidacy Visit.

2016 Feb – More property is sold totaling $6.9million.

2016 May 23 – Bob Jones Elementary School, Inc. changes its name to BJU. Inc.

2016 May 5 – Board approves final "tax exemption plan.”

2016 June 16 – SACSCOC grants candidacy.

2016 July 6 – BJA gets MiddleStates accreditation.

2016 Nov 1-3 – SACSCOC Accreditation visit.

The most obvious question is this: why didn’t BJU wait until July 2017 – after their assumed-to-be-getting SACSCOC accreditation was complete? Why did they do this in March – just 3 months before they seem so confident they’ll be getting regional accreditation and risk the whole thing?

Are they that desperate financially? Are their tax lawyers that separate from their accreditation experts?

[wutbju]

The fourth paragraph is Pettit’s tax-exemption announcement offered a race metaphor:

There is not one school in the U.S. with whom we compete that is in our tax position. We are trying to run a race with crippled legs. Until we have the means to garner donor support, the chances of our winning the race are limited.

First of all, there’s no school in the history of ever trying to sneak by as a non-profit with a for-profit status who lost that because of a racist policy it attempted to present as a religious doctrine before the Supreme Court.

But okay, we’ll grant you that point.

“...with whom we can compete...”

Okay. Do you mean your benchmark schools? 

Anderson University (SC)

Covenant College 

Cedarville University

Faulkner University

Maranatha Baptist Bible College

Newberry College

North Greenville University

Pensacola Christian College

Regent University

Or do you mean local community colleges? Because that’s what Steve Pettit has claimed is BJU’s biggest competition.

“We are trying to run a race with crippled legs.”

Whatever. That’s weird.

“Until we have the means to garner donor support...”

So all these 34 years, you have had no means to garner donor support? None? M&G? Science Endowment? Scholarship Fund? Bible Conference Offerings? None? 

Could the problem be something else? . . . 

The M&G had tax exemption, and they couldn’t make it. What could be the problem then?

“...the chances of our winning the race are limited.”

Just try to run the race, Pettit. Not win. Just run it. 

[wutbju]

Steve Pettit goes on to explain to the employees -- six weeks ago now -- that the whole reason Bob Jones University is in a money pickle is because they don’t have enough alumni donations, endowments, and grants.

We are significantly hindered in donations without tax exemption. Therefore, we are seeking tax exemption for two primary reasons:

Donor Support is essential for long-term financial stability. In part, our financial pressures are due to the low amount of income that comes from donations, endowments and grants.

Really? 

This no-endowment trope dominates BJU’s fundraising. Remember? In 1990, Bob Jones III justifies his plea for that endowment with:

So in 1990, BJU hadn’t planned ahead for expenses because they would have had to raise tuition. 

And in 2017, BJU hasn’t planned ahead for expenses because they can’t get tax-deductible donations. 

There’s one consistent theme here: 

Bob Jones University doesn’t plan ahead. 

Or to put it in the vernacular:

Bob Jones University sacrifices the permanent on the altar of the immediate.

[wutbju]

We need to add this one to the timeline. Bob Jones University was still a SACSCOC candidate when, Pettit admits, the Board of Trustees decided to make this change. 

This substantive change. . . .

[wutbju]

From the Collegian:

“When I came here as president and I met with our cabinet in our first meeting, I made it very clear where I stood on the race issue,” President Steve Pettit said Wednesday, Feb. 15, during the 2017 Bible Conference.

“And so I decided at that time we were going to seek back our tax-exempt status because we don’t believe [the policies we once held]. That’s not what we believe.”

In meetings since he became president, Pettit told faculty, staff and alumni that regaining tax exemption was one of his top priorities.

His announcement from the stage of Founder’s Memorial Amphitorium was the first time students heard the official news. Shouts of support and extended applause followed.

Thirty-four years after the landmark Supreme Court decision to remove the University’s tax exemption due to its former interracial dating policy, over 200 publications covered the resolution of the story that drew national attention throughout the 1980s into the early 2000s.

Although the policy was rescinded nearly 20 years ago by then-President Bob Jones III, the board of trustees and the administration began to seek to reestablish tax exemption in 2014 when Pettit assumed the office of president.

According to Chief Communications Officer Carol Keirstead, securing tax exemption was one of Pettit’s core initiatives.

“[Establishing tax exemption] was President Pettit’s priority,” Keirstead said.

“He saw the benefit of it. And somebody coming in new could grab it and run with it. And that’s what he did.”

Securing tax exemption has been a two-and-a-half-year process of consulting legal and tax experts as well as people knowledgeable about non-profit organizations.

The resulting plan was to divide the BJU ministries into two individual organizations, BJU, Inc. and BJU Education Group, Inc.

BJU, Inc. will contain non-profit entities, the University and the BJA Elementary School, while BJU Education Group, Inc. will contain taxable entities, BJA High School, Middle School, BJU Press, and the BJU Dry Cleaners.

The two separate organizations have made legal agreements to allow Facilities and other departments to service both BJU, Inc. and BJU Education Group, Inc.

While BJU, Inc. will operate under the existing Board of Trustees, BJU Education Group, Inc. will be governed by a new eight-member board consisting of Pettit, two executive vice presidents and a board member as well as four external members.

Keirstead said that with the diverse interests of BJA and the BJU Press, the board needed a diversity of knowledge and experience including the business knowledge the four external members bring to the table.  

Public relations director Randy Page said that although the restructuring is complicated, the effects on day-to-day life on campus will be minimal and students will probably not notice the change.

While tax exemption will allow the University to apply for some federal grants that were previously unavailable, Page said the main reason to reestablish tax exemption was to allow donors the ability to deduct their charitable donations. Keirstead and Page both believe that consequently donations to the University will increase.

“Most colleges and universities have large endowments,” Keirstead said. “We are at the disadvantage of not having built an endowment. [Pettit] knew we needed to have a better financial base to move forward. Obviously if donors can get a tax exemption, you have more donations. It’s reasonable.”

On Feb. 23, the University emailed alumni, a large portion of the University’s donor base, describing the change in tax status and the resulting change in structure. Keirstead and Page said the response has been overwhelmingly positive.  

Dr. Bob Jones III, BJU president when the University lost tax exemption, expressed his personal support for regaining tax exemption.

“Unquestionably, having [tax exemption] again is going to be beneficial,” Jones said. “So I am happy about the prospect of that [benefit].”

The last three BJU presidents and the Executive Board have repeatedly reaffirmed that the former policy was wrong.

Page echoed Pettit’s sentiments from the 2017 Bible Conference.

“As a country, as a state, as an institution, we have grown. It is exciting for me to see [growth],” Page said.

“There is change, and that change is a good change. And that’s where we want to be.”

[wutbju]

Continuing with the Faculty-Staff Meeting minutes, Pettit doesn’t quibble about the justification for becoming a 501c3: donations.

Here’s the whole explanation:

The primary supporters of any institution are always the alumni. Financial giving ties the hearts of the alumni back to their alma mater. However, we are significantly hindered in donations without tax exemption. Therefore, we are seeking tax exemption for two primary reasons:

Donor Support is essential for long-term financial stability. In part, our financial pressures are due to the low amount of income that comes from donations, endowments and grants.

While donors in the past were able to give to M&G and more recently through the BJU Scholarship Fund, we have not had a tax-deductible means of receiving funds for needed capital-fund campaigns and giving to our academic departments. We need to provide donors a direct means for making unrestricted tax-deductible gifts.

There is not one school in the U.S. with whom we compete that is in our tax position. We are trying to run a race with crippled legs. Until we have the means to garner donor support, the chances of our winning the race are limited.

The Issue of Religious Liberty - It is beneficial for BJU to reenter the mainstream of nonprofit religious higher education so that we do not face upcoming issues as an island operating alone.

We knew about the second reason. Pettit has been saying that since the first time he announced it.

It’s odd that he calls discriminating against LGBT students a “religious liberty” issue, but BJU called their racist policies a function of religious liberty as late as 2000, so it makes sense.

But go back to those first paragraphs.

Financial giving = Emotional Obligation. Money = heart.

Is that all he sees in us? Wallets? No wonder Pettit has a tin ear.

But if alumni are the ones giving money for love from BJU, what does that make BJU?

[wutbju]

That’s what he said a month ago to the Bob Jones University employees.

When justifying the blindsiding lay-offs, Pettit actually told his employees that BJU needed to “right size” the corporation because:

Enrollment declined because of the downward trend in enrollment over the past eight years.

You don’t say?

That’s kind of like saying, “It rained last night because water was falling from the sky.”

The more we hear from Pettit, the more it’s clear that a man who has spent no longer than a week in any one location for the past twenty years doesn’t really have the management skills to run a university for the long term. The tweet fiasco this week is more proof of that. Tweeting this days after blindsiding your most loyal employees...

... is ignorant and insensitive. We’re all glad you deleted it, Pettit ... from your $600K house in Montebello. But it still proves you really don’t know what you’re doing. You don’t know how to interact with a large group of people who are smarter than you for the long term.

To the blindsided employees, again, I’m so sorry. I know that feeling. You really believed that if you were loyal, BJU would be loyal. 

It’s a real blow.