Arizona's Grand Canyon University seeking nonprofit status

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Grand Canyon University has launched a renewed bid for nonprofit status under a proposed agreement for shared services with the company that has been running it, officials for the Arizona school said Friday.

Brian Muller, the university's president and CEO, said the move contemplates "the best long-term interests of students, faculty and staff, the community and investors."

The university made an unsuccessful try during the 2015-16 year to obtain nonprofit status from the Higher Learning Commission, which accredits the private Christian school. Grand Canyon said the accrediting body at the time did not have the guidelines necessary to evaluate the kind of arrangement the school was proposing, with the nonprofit university overseeing academics and the for-profit company that has run it for years providing it with services such as accounting and human resources.

Grand Canyon has submitted a new application for nonprofit status now that the commission has adopted guidelines that contemplate shared service arrangements, the university said in a statement. It said the commission could vote on the application as early as its February board meeting.

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The university proposes to re-establish itself as a nonprofit school once it buys certain academic-related assets from Grand Canyon Education, Inc., the company that has been operating it.

After the sale, the university itself would control academics, along with departments such as athletics, public safety, facilities and student services. The education company would then operate as a third-party, for-profit provider of many services to the school including recruitment, marketing and information technology.

According to the university statement, the educational services company has also filed paperwork with the Securities and Exchange Commission on the proposed arrangement, which would allow it to continue as a publicly traded company and provide services not only to Grand Canyon but also other schools.

Mueller said that returning to nonprofit status could increase the university's opportunities for donations, grants and research. It would also allow the university to become a full voting member of the NCAA, he said.

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The university president said in a statement that the school was nonprofit from its founding in 1949 until 2004, when it sought for-profit status after falling $20 million into debt and almost closing its doors.

Without a large donor base or the ability to rely on tax dollars, the university kept running by securing investor funding and adding an online component to its teaching programs, Muller said. The university then sought out public markets for capital investment, helping the school grow much stronger financially, he said.

Grand Canyon University has 19,000 students enrolled at its Phoenix campus and another 70,000 online students.

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[MAP: Grand Canyon University, 3300 W. Camelback Road, Phoenix]

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