Nonprofit Resources


Racial Nondiscrimination Certification for Tax-Exempt Schools

Every tax-exempt school must annually certify to the IRS that it does not discriminate on the basis of race. The Supreme Court ruled in 1983 that a racially discriminatory school could not be tax exempt and that religion was not a defense.

Schools certify nondiscrimination on Schedule E if they file Form 990 or on Form 5578 if they do not file Form 990 (because they are associated with a church). We’ve summarized critical requirements of this certification below. Details are available in the instructions to both forms, available at

The main requirements are:

  1. Board approval of a racial nondiscrimination policy must be documented.
  2. All brochures and websites used for recruiting students must include a nondiscrimination statement. The IRS-approved wording is:

    The M school admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs.

  3. The school must annually publicize its nondiscrimination policy in a newspaper, broadcast media, or on its primary publicly accessible website home page. The method used must be reasonably expected to reach all segments of the community served. Approved alternatives are available for church-related schools where 75% or more of students are from the church, schools that draw a substantial percentage of students nationally or worldwide, and schools that the IRS determines have a substantial minority enrollment. Study the publicity requirements in the form instructions carefully to assure compliance. 
  4. The following records must be kept:
  • Documentation of the racial composition of the student body, faculty, and administrative staff (estimates are allowed)
  • Documentation that scholarships and other financial assistance are awarded on a nondiscriminatory basis
  • Copies of all written communications regarding students and solicitation of contributions

IRS Rev. Proc. 75-50 has these statements about noncompliance and record keeping:

Failure to comply. Failure to comply with the guidelines will ordinarily result in the proposed revocation of the exempt status of a school in accordance with the procedures set forth in Rev. Proc. 72-4, 1972-1 C.B. 706.

Failure to maintain records. Failure to maintain or to produce upon the proper request the required records and information will create a presumption that the organization has failed to comply with these guidelines.

There is no formal correction process or penalty for schools that discover they are not in compliance or lack necessary records. The school should immediately begin complying and keeping records. A history of compliance after discovery of the requirements will carry substantial weight if any issues are raised in an IRS audit about racial nondiscrimination.

If you have any questions about this topic, please contact us online or at [email protected].

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