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The Indiana University Board of Trustees unanimously agreed Friday to jettison a controversial proposal to spin off part of the Kinsey Institute as a nonprofit.

The proposal came after the Republican-dominated Indiana General Assembly passed a state budget in spring 2023 banning the historic sex research institute from receiving state funds. University administrators then suggested creating a nonprofit to “separately fund and manage” certain “limited functions” of the institute.

But faculty members publicly expressed fears that such a change might mean losing their affiliations with the institute and could threaten, among other things, the institute’s extensive sex, gender and erotica collections, which span more than 2,000 years of history. University board members tabled their planned vote on the spinoff in November, acquiescing to calls for more time to vet the proposal.

In a news release Friday, IU announced a new, board-approved direction. Instead of a nonprofit, the release said, the university “will develop and submit a proposed plan with the Indiana State Board of Accounts to ensure compliance” with the state appropriations ban while maintaining Kinsey’s “affiliation with the university.”

Details were lacking; the release said the “plan, once reviewed and implemented, would establish clear compliance with state law, including the prohibition of state appropriations to support the Kinsey Institute.”

“It’s the best outcome we could have hoped for, and all the hard work and support from people has really paid off,” said Cynthia Graham, a senior scientist at the institute and professor of gender studies at the university. She was among those who raised alarm about the spin-off proposal.

Zoë Peterson, director of the sexual assault research initiative at the institute and a professor of counseling and educational psychology at the university, said, “We are very happy that rather than going with any of those 501(c)(3) options we will remain entirely at IU.”