#substantive change

[wutbju]

That’s what Steve Pettit said to the Bob Jones University employees at the last Faculty/Staff meeting:

On the academic front, the highlight was the accreditation visit at the end of last year. Please continue to pray for a positive decision regarding our membership at the June meeting of the SACSCOC board. We will have announcements to all constituents ready to roll out within minutes of receiving the call. The Board of Trustees and the faculty/staff will be the first ones to know.

So the second week of June, a BJU representation will go before the SACSCOC board to hear BJU’s standing. 

Here’s what we know:

Bob Jones University has had SACSCOC candidacy for one year starting in June 2016.

Most SACSCOC candidates remain so for two years before acquiring accreditation.

Bob Jones University has conducted itself much more circumspectly since receiving candidacy, indicating that SACSCOC does have some sway over BJU’s interactions with alumni and the community. For this WutBJU is very, very thankful. 

But Bob Jones University has made what amounts to three substantive changes while a SACSCOC candidate -- actions strictly forbidden in the SACSCOC Principles of Accreditation. SACSCOC is aware of these substantive changes. 

In correspondence with WutBJU, Middle States considers the BJU split, ownership change, and legal status a “substantive change.” Sister agencies care a great deal about what their peers conclude.

What will happen in June? We alumni don’t know. We will find out minutes after the BJU PR department hits “send.” 

If Bob Jones University does get accreditation in June, that means that:

All the students who graduated last week are the first Bob Jones University graduates in 90 years to have a regionally accredited degree from 29614. That’s a big deal.

Bob Jones University will continue to conduct its Public Relations department in a much more professional way as it has since November 4, 2016. That’s a very good thing. No more anonymous phone calls to other local colleges. No more targeting of minors in local public schools and churches. No more anonymous comments from Randy Page. 

We alumni have recourse. The police don’t listen. GRACE didn’t change anything. But the SACSCOC will be checking on BJU regularly. That’s a very good thing as well.

So will the BJU Public Relations staff have the right email all ready to send to its constituency on June 16? We have 5 weeks to see.

[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]

BJU Financial Aid has been announcing changes for the students after the 501c3 status. The latest is this:

In addition to name changes, all student positions previously paid subminimum wage based on the certificate the U. S. Department of Labor issued to Bob Jones University will change to minimum wage. This change will take place on Sunday, March 19, 2017.

So in ten days students at BJU will earn $7.25/hour.

[wutbju]

Bob Jones University, Inc. as it was incorporated on November 20, 1952 is now called “BJU Education Group, Inc.” as of March 1, 2017

[wutbju]

Now, thanks to an afternoon update from Nathaniel Cary at The Greenville News on February 21, we know exactly what Bob Jones University described to both SACSCOC and TRACS.

And they may just skirt past any oversight with this one. They just may pull this one off. But not without us alumni watching.  

At 12:52pm on February 21, investigative reporter Nathaniel Cary added the following to the end of his February 16th story:

The university presented SACSCOC with its proposal plan for tax exemption and there is no change in governance, said Pamela Cravey, SACSCOC spokeswoman.

"The action was an IRS matter and did not constitute a substantive change," Cravey said,

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

So we were wondering what BJU told TRACS and SACSCOC. Now we know.

However, SACSCOC’s statement directly contradicts what Friend of the Archive Randy Page stated to The Greenville News:

The change didn’t require IRS approval because its elementary school was already a nonprofit, though the university had formal correspondence and conversations with the IRS.

Was it an IRS matter or not? 

SACSCOC said it was only of concern to the IRS, and Page says it didn’t concern the IRS at all. Which is it?

Secondly, SACSCOC states that it

has considered Bob Jones University a not-for-profit.

But Steve Pettit states:

Organizing as a tax-exempt entity is something BJU has needed to do for quite some time.

Which is it? Is BJU tax-exempt? Is BJU a not-for-profit? The terms are almost interchangeable -- almost. “Tax-exempt status refers to federal income tax exemption under the Internal Revenue Code,” and “nonprofit status refers to incorporation status under state law.” 

Is that it? Venable, LLP continues:

Because the requirements for federal income tax exemption are more stringent than those for nonprofit corporation status, there are some associations that are nonprofit corporations but do not qualify for exemption from federal income tax. However, these organizations are few and far between. Most nonprofit organizations qualify for federal income tax exemption under one of 25 subsections of Section 501(c) of the Internal Revenue Code. Most associations are tax-exempt under Sections 501(c)(3) or (c)(6), and a smaller number under Sections 501(c)(4) or (c)(5). In addition, some 501(c)(6) associations form related educational or charitable foundations exempt under Section 501(c)(3), along with other taxable and/or tax-exempt subsidiaries.

So is The World’s Most Unusual University going to slink through that narrow little crack between nonprofit and tax exempt?

It just might. 

Look back at what Randy Page stated, however. BJU wants to be a nonprofit from the vantage point of the Department of Education too. Page states quite plainly that in the eyes of the Department of Education they are currently “for-profit.”

It also moves BJU from a for-profit college to a nonprofit classification with the U.S. Department of Education, “which is frequently perceived more favorably by the public,” Page said.

That change could prove important as the U.S. Department of Education has targeted for-profit colleges with added oversight in recent years and fined several for-profit networks of colleges under the Obama administration, which resulted in colleges like Corinthian College and ITT Technical Institute closing down.

So Page uses the same terms of “for-profit” and “nonprofit.” Page admits, as WutBJU has proven previously, that in the eyes of the Department of Education, BJU is considered a for-profit college. 

In fact, it wasn’t too long ago that SACSCOC itself determined that Bob Jones University was for-profit:

Which is it? Does SACSCOC in February 2017 get to determine something contrary to the Department of Education, contrary to Bob Jones University’s own description, and contrary to SACSCOC’s own description in May 2016?

But the change in “tax exemption” and federal “for-profit” vs. “not-for-profit” is just one matter. There are at least two other changes that are objectively substantial. 

The Greenville News describes these events as “complicated.”

[BJU] used a complicated plan to split its organization into two entities with the university falling under the umbrella of its elementary school’s existing non-profit status to achieve its own, according to university statements and organization documents filed with the South Carolina Secretary of State and the IRS.

That existing nonprofit was called Bob Jones Elementary School, Inc. until last May, when it was renamed BJU, Inc.

WutBJU reported all that as soon as BJU announced the change to its employees. And The Greenville News confirms it. 

Bob Jones University will split its assets and change ownership. 

It’s right there. And that’s not a “substantive change”?

SACSCOC itself defines two substantive changes as:

Change of legal status, governance, control, or form – a change of corporate form, governance structure, or conversion, including, but not limited to, change from Limited Partnership to Corporation, from Limited Liability Corporation to Corporation, from a Not-for Profit Corporation to a For-Profit Corporation, a Private to a Public, a Not-for Profit Corporation controlled by members to one controlled by its Board of Directors, significant change in the size of the institution’s governing board.

Change of ownership – the sale or transfer to, or acquisition by, a new owner of all, or a substantial portion, of the institution’s assets, or the assets of a branch campus or site. 

BJU is changing its ownership to an Elementary School. BJU is halving its assets 50/50. 

I have the announcement BJU made to the employees right here. The employees have been told they have a new employer. 

When you leave your desk or workplace on Friday, March 17, you will work for BJU.  When you return on Monday, March 20, you will work for BJU, Inc., or BJU Education Group.

That’s not substantive? 

I have the FAQs that BJU used to prepare its employees for the SACSCOC Accreditation Site Visit last November right here. Just in November Bob Jones University was defending the Bob Jones Academy and the BJU Press as vital to its mission. 

So that just gets swept away?

The corporation has split. The mission has split. The assets have split. The employees have a new employer. 

And that’s not “substantive”?

Is “complicated” and “splitting” and “changing ownership” not “substantive”? 

[wutbju]

So WutBJU has covered what SACSCOC defines as a “substantive change.” How about BJU’s current accreditor, TRACS?

TRACS defines BJU’s current split and purchase and legal status as substantive changes too:

Any change in the legal status, form of control, or ownership of the institution including a name change relating to changes. (See D: Substantive Changes Requiring a New Comprehensive Evaluation) (C2)

BJU is telling its employees and the public that it has already gained approval for these changes from SACSCOC (which isn’t possible during candidacy). 

But what about from TRACS? BJU is accredited through this agency. Has TRACS approved these changes? 

Go look. 

The last “substantive change” that Bob Jones University had approved through TRACS was in January 2014. It was this:

To establish a collaborative agreement with Beijing Language and Cultural University to teach Chinese Courses.

If BJU really “initiated” these latest ownership, legal status, and asset-split changes before October 2014 like they claim to their employees, where it is approved by TRACS? 

It wasn’t in November 2016.

It wasn’t in July 2016. 

It wasn’t in April 2016. 

It wasn’t in December 2015. 

It wasn’t in October 2015. 

It wasn’t in September 2015. 

It wasn’t in June 2015. 

It wasn’t in April 2015. 

It wasn’t in January 2015. 

The last thing approved was the Beijing Language and Cultural University enterprise in January 2014 which has since folded. . . . 

Is this how Bob Jones University treats its accreditors? Is this their idea of integrity?

[wutbju]

It’s official. Steve Pettit announced tonight that Bob Jones University will gain not-for-profit status on March 1, 2017.

Pettit’s exact statement:

I believe it is appropriate for us as an institution to seek, to receive back our tax exempt status.

Because we lost it over a racial issue.

And I said it’s not a racial issue. It’s not a biblical issue.

It’s a matter of a social issue. That’s all that it is.

And so I decided that at that time we were going to seek back our tax exempt status because we don’t believe that. That’s not what we believe.

And so I am happy to announce that in two weeks on March 1 after two and a half years that Bob Jones University will get its tax exempt status back.