Rev. Proc. 72-54

Section 1. Purpose.

This Revenue Procedure sets forth guidelines for determining whether certain private schools that have rulings of recognition of exemption or are applying for recognition of exemption under section 501(c)(3) of the Code have adequately publicized their racially nondiscriminatory policies as to students.

Sec. 2. Background.

.01 A school that does not have a racially nondiscriminatory policy as to students does not qualify as an organization exempt from Federal income tax. See Rev. Rul. 71-447, C.B. 1971-2, 230, which defines a racially nondiscriminatory policy as to students as meaning that

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

.02 A showing that the school does in fact have a meaningful number of students from racial minorities enrolled is evidentiary of a nondiscriminatory admissions policy. However, such showing will not in itself be conclusive that the school has a racially nondiscriminatory policy as to students.

.03 Where a school has not clearly established that it is operating under a bona fide racially nondiscriminatory policy as to students, it must, in order to qualify for exemption, take affirmative steps to demonstrate that it will so operate in the future. The school must show that a racially nondiscriminatory policy as to students has been adopted, has been made known to all racial segments of the community served by the school, and is being administered in good faith.

Sec. 3. Publicity Guidelines.

The school may use any method to publicize its racially nondiscriminatory policy so long as it effectively accomplishes the end of making the policy known to all racial segments of the community served by the school. Following are examples of methods that the Service will consider as meeting this requirement.

.01 Where the student body is drawn from just one locality, the school may publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the locality. Where no single newspaper of general circulation serves all racial segments, the school may publish its notice in those newspapers that are reasonably likely to be read by all racial segments in the locality. In the case of a school whose student body is not drawn from one locality, the school may publish the notice of its racially nondiscriminatory policy in a newspaper or other publication reasonably likely to reach the localities served and be read by all races. The notice may be either an advertisement or an article, but it must appear in a prominent position and be captioned in such a way as to call attention to both the notice and to its nature as a notice of a racially nondiscriminatory policy as to students.

.02 The school may use the broadcast media to publicize its racially nondiscriminatory policy if the use makes such nondiscriminatory policy known to all segments of the community the school serves. If this method is chosen, the school must provide documentation that the policy has been fully and effectively communicated to all segments of the community. In this case, appropriate documentation would include copies of the tapes or script used and records showing that there was an adequate number of announcements, that they were made during hours when the announcements were most likely to be communicated to all segments of the community, that they were of sufficient duration to convey the message clearly, and that they were broadcast on radio and/or television stations likely to be listened to by substantial numbers of members of all racial minorities in the community.

.03 The school may publicize its nondiscriminatory policy through its school brochures and catalogues so long as there is a clear showing that these publications are distributed in such a way as to make the policy known to all segments of the community that the school serves.

.04 The school may advise leaders of racial minorities of its nondiscriminatory policy so that they in turn will make this policy known to other members of their race. If this method is used, the school must provide documentation that its racially nondiscriminatory policy has been fully and effectively communicated by the minority leaders to their groups. Adequate evidence of this would be statements signed by the minority group leaders.

Sec. 4. Mississippi Schools.

The United States District Court for the District of Columbia has ordered specific publication requirements for Mississippi schools. See Green v. Connally, 330 F. Supp. 1150, affirmed sub nom. Coit v. Green, 404 U.S. 997 (1971). To the extent, if any, that the requirements in the Green Court Order vary from the requirements set forth in this Revenue Procedure, the Court Order is controlling for Mississippi schools.