Connected Campus

3.2.13 Institution-related Entities

 

For any entity organized separately from the institution and formed primarily for the purpose of supporting the institution or its programs: (1) the legal authority and operating control of the institution is clearly defined with respect to that entity; (2) the relationship of that entity to the institution and the extent of any liability arising out of that relationship is clearly described in a formal, written manner; and (3) the institution demonstrates that (a) the chief executive officer controls any fund-raising activities of that entity or (b) the fund-raising activities of that entity are defined in a formal, written manner which assures that those activities further the mission of the institution.

 

_X_  Compliance           ___  Partial Compliance          ___  Non-Compliance

 

Narrative

 

Mid-America Baptist Theological Seminary (MABTS) provides a clearly stated definition of legal authority and operating responsibility. The institution’s board of trustees has legal authority and operating responsibility for dealing with outside entities, however, the school does not provide an intercollegiate athletics program. The school maintains a contractual agreement with Mid-America Student Housing, Inc. (MASH), the seminary’s residential housing facility, which is described accurately including any liability associated between MABTS and MASH. The mission of MASH is consistent with that of the institution, and the rent revenue it generates supports the school. Both institutions have a governing board which are separate but work cooperatively with each other. The chief executive officer is responsible ultimately for fund-raising of MABTS and the rent revenue MASH generates for the institution.

 

Legal Operating Authority

 

MABTS demonstrates legal authority to operate as a not-for-profit corporation as an academic institution. The school also maintains a contractual agreement with MASH as a student housing entity.

 

MABTS. MABTS clearly expresses adequate definitions of legal authority and operating responsibility as a separate not-for-profit corporation as defined under Section 501(c)(3) and 509(a) and 170(b)(1)(A)(ii) of the Internal Revenue Code of 1986 [2] and in accordance with the provisions of Tennessee Code Annotated § 67-6-322 [7]. 

 

MASH. The student housing entity, MASH, was established in 1996 as a separate 501(c)(3) non-profit organization. MASH has three stated purposes: (1) to support and carry on religious, charitable, and educational purposes within the meaning of Section 501(c)(3), (2) to principally own, provide and operate housing for seminary students who are principally to be from the student body of MABTS, (3) to carry out the general purposes for the operation of such entity. These purposes are all delineated in the corporate charter of MASH [1]. MASH was created to give MABTS students affordable and convenient housing. While it is a separate entity in every way, MASH supports the overall mission and core values of MABTS. MASH also maintains a separate insurance binder from MABTS. The governing documents setup a completely separate entity with no institutional liability associated with the relationship [1 and 5].

 

The governing documents of MASH clearly express adequate definitions of legal authority and operating responsibility as a separate not-for-profit corporation as defined under Section 501(c)(3) and 509(a)(1) and 170(b)(1)(A)(vi) of the Internal Revenue Code of 1986 [8] and in accordance with the provisions of Tennessee Code Annotated § 67-6-322 [9]. 

 

The working structure between the institution and MASH is conducted primarily through the Business office and the Campus Life office of MABTS. The Director of Campus Life reports weekly to the Executive Administrative Committee (EAC), regarding tenant issues and requests. The day-to-day operation of MASH is sub-contracted to LEDIC Management Group of Memphis, TN. Coordination of student issues is communicated through the Campus Life office of MABTS, but the assessment and collecting of rents and related activities are handled through LEDIC.

 

Contractual Agreements

 

MABTS’s relationship with MASH is delineated in its articles of incorporation [3] and by-laws [4]. Further proof is found in the corporate charter of MASH [1] and its by-laws [5]. MASH keeps a separate set of books from MABTS and is not required under governing documents or contract to insure the financial viability of MASH, nor is MASH required to do likewise for MABTS. MASH is audited separately from MABTS and is in every way a separate entity.

 

Financial Records/Fund-Raising

 

Currently, MABTS holds a note payable from MASH. MASH is paying on this note monthly per terms stipulated in the MABTS Secured Promissory Note from MASH [6]. The operational issues that involve note repayment and bookkeeping activity are managed through the Business office of MABTS. Accountability is assured by monthly reporting. LEDIC reports monthly activity to the Chairman of the MASH board and to the Business office of MABTS. The Vice President for Finance and Operations (VPFO), of MABTS reports monthly to the Finance Subcommittee of the Trustees of MABTS. Additionally, the VPFO reports weekly to the EAC regarding all financial issues, including the status of the notes payable. There are no provisions stating that the chief executive officer of MABTS controls any of the fund-raising of MASH.

 

Documentation

 

1. MASH Charter of Incorporation

2. MABTS 501(c)(3)

3. MABTS Articles of Incorporation

4. MABTS By-Laws

5. MASH By-Laws

6. MABTS Secured Promissory Note from MASH

7. MABTS TN Certificate of Exemption

8. MASH 501(c)(3)

9. MASH TN Certificate of Exemption

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