I have no idea if BuddyPress has built in date functions but WordPress does and PHP does. This should do it:
$bpress_date = bp_profile_field_data( array('user_id'=>get_the_author_meta( 'ID' ),'field'=>'birthday'));
// $bpress_date = "1985-10-30 00:00:00"; // test
echo date('F, j, Y',strtotime($bpress_date));
date expects UNIXTIME. That is why the date string is passed through
strtotime. It does not work without that step.
You probably want to consider using WordPress'
date_i18n, however, which would look like:
This gives you some ability to internationalize things as the date will displayed according to the blog's date format settings.