What is the legal status of SMU?
Southern Methodist University is a non-member nonprofit corporation established pursuant to the Texas Business Organization Code.
SMU is exempt from federal income tax under Internal Revenue Code Section 501(c)(3).
For what purpose was SMU organized and formed?
The purposes for which SMU is “organized and formed are to: (a) acquire, own, operate, provide, maintain and perpetuate, on a non-discriminatory basis, in accordance with the Corporation’s policy on nondiscrimination as adopted from time to time: (i) an institution of higher learning, including education and instruction in literary, scientific, theological, vocational and professional branches, with authority to confer all college and university degrees, (ii) such other institutions, organizations, clinics, corporations, limited liability companies, partnerships, affiliates, properties, facilities and services as are appropriate in furtherance of the educational, charitable, scientific, literary or public service purposes of the Corporation, and (iii) all properties, facilities and services necessary or appropriate in connection therewith; and (b) generally have and exercise all powers granted to nonprofit corporations under the law of the State of Texas for any lawful educational, charitable, literary, scientific or public service purposes; provided, however, that notwithstanding any other provision in this Amended Certificate of Formation, the Corporation will not carry on any other activities not permitted to be carried on (i) by a corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (or the corresponding provision of any future United States Internal Revenue law) (collectively, the “Revenue Code”) or (ii) by a corporation, contributions to which are deductible under Sections 170(c)(2), 2055 and 2522 of the Revenue Code.”
Founding and Governance:
How was the University founded and how is it governed today?
SMU was chartered on April 15, 1911. The incorporators were George T. Jester, C.C. Walsh, and M.M. Brooks. The initial board consisted of twenty directors, four from each of the five Texas conferences of what was then the Methodist Episcopal Church South.
The Board of Trustees is composed of 42 members, including 3 bishops and 9 other trustees recommended by the South Central Jurisdiction of The United Methodist Church; 26 trustees recommended by the Board; and 4 ex officio members (the President of the University and one representative each of the Students' Association, the Faculty Senate, and the Alumni Association). The Board of Trustees meets four times a year (in February, May, September, and December).
The Board of Trustees is responsible for the election of the President and establishes policies for the governance of the University. Members of the Board dedicate their expertise and resources to the advancement of SMU and play an integral role in the implementation of the mission and strategic plan of the University.
The day-to-day management of SMU is carried out by the officers of the corporation in accordance with the Texas Non-Profit Corporation Act..
Is SMU exempt from paying federal income or from state taxes?
SMU receives favorable tax treatment under both federal and state laws because it performs a function that otherwise would have to be performed by government.
SMU is exempt from the payment of federal income taxes because it meets the definition of an exempt organization under section 501(c)(3) of the U.S. Internal Revenue Code. SMU is not a private foundation within the meaning of section 509(a) of the Code. Contributions to SMU are tax deductible pursuant to section 170(b)(1)(A)(ii) of the Code.
In addition, under state law, SMU is exempt from the payment of property taxes under V.T.C.A., Tax Code § 11.21. The University is exempt also from the payment of state sales and use taxes under §151.310, the state hotel occupancy tax under §156.102, and the state franchise tax under §171.062.
Composition of the University:
What is the legal status of the various schools that comprise the University?
SMU consists of seven schools: Dedman College of Humanities and Sciences, Algur H. Meadows School of the Arts, Edwin L. Cox School of Business, Bobby B. Lyle School of Engineering, Dedman School of Law, Perkins School of Theology, and the Annette Caldwell Simmons School of Education and Human Development. These schools do not have a legal status separate and apart from SMU. For this reason the schools are not “legal persons” and cannot own property, enter into contracts, or conduct other business activities in their name.
The Meadows Museum:
What is The Meadows Museum and is it a part of SMU?
The Meadows Museum houses one of the largest and most comprehensive collections of Spanish art outside of Spain. It was founded by Algur H. Meadows through gifts to SMU of works of art and financial resources. It opened in 1965. Like the seven schools that part of SMU, the Meadows Museum does not have separate legal status, and cannot own property, enter into contracts, or conduct other business activities in its name.
The George W. Bush Presidential Center:
What is the George W. Bush Presidential Center and is it a part of SMU?
Located at SMU's University Park campus, the George W. Bush Presidential Center houses a repository for documents and artifacts of the 43rd President of the United States and his administration and a permanent museum. The repository and museum are operated by the National Archives and Records Administration. The Presidential Center is also the home of the George W. Bush Institute which is governed and operated by the George W. Bush Foundation, a Texas Non-Profit Corporation. The Presidential Center is located on land leased from SMU.
Office of Legal Affairs
Perkins Administration Building Suite 130
Information on this website is provided by the SMU Office of Legal Affairs for the benefit of the faculty, staff, and students of the SMU community. It is not intended as legal advice or as an opinion on specific circumstances. The attorneys of the SMU Office of Legal Affairs are available to assist you in working through any of these topics, as well as a variety of other university-related matters.