The recent Supreme Court decision denying tax-deductible charitable contributions to Bob Jones University is terribly important for all evangelicals, but not well understood. This fundamentalist university admits blacks, but it does not admit students of mixed marriages or permit interracial dating. The school maintains it does not discriminate racially, but on religious grounds believes the races are to be kept separate.
Almost all evangelicals, including fundamentalists, oppose the BJU racial views but hold that the Internal Revenue Service had no right to withhold tax exemption from the university, and that the Supreme Court should not have supported its misguided policy. Regulation 501(c)(3) of the Internal Revenue Code explicitly grants tax exemptions to “corporations … organized and operated exclusively for religious, charitable … or educational purposes.” And Regulation 170 extends this to charitable deductions. The Supreme Court did not question the sincerity of the religious convictions of the university or find any kind of lobbying or other political activity that would invalidate its right to exemption. Rather, it based its decision on the grounds that to receive tax exemption, an organization must: (1) serve a public purpose, and (2) not act contrary to public policy. In the case of BJU, the court agreed that the school engaged in social and racial discrimination, and that racial discrimination by the U.S. Constitution and the laws of the land does not serve a public purpose and is contrary to public policy.
This ruling will be used to force all religious, charitable, and private educational organizations to confine their activity to positions approved by the general populace on pain of ...1
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