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 Home > News & Policies > August 2001

How Much Federal Support for Faith-Based and Grassroots Charities?
The social safety net throughout the United States includes Federal, State, and local government programs, local affiliates of large national organizations (both secular and sacred) for-profit companies, and a great diversity of other groups. Although little attention has been paid to them until fairly recently, faith-based grassroots groups play large and vital roles everywhere. This network is composed of: local congregations offering literally scores of social services to their needy neighbors; small nonprofit organizations (both religious and secular) created to provide one program or multiple services; and neighborhood groups that spring up to respond to a crisis or to lead community renewal. As one study reports:

These religious organizations represent a major part of the American welfare system. Tens of thousands of people in the Philadelphia area are being helped by all kinds of programs, from soup kitchens to housing services, from job training to educational enhancement classes. One can only imagine what would happen to the collective quality of life if these religious organizations would cease to exist.2

Despite the vast, varied, and vital community-serving role of these diverse, sacred, and secular grassroots groups, when the Federal Government reaches out for partners to help fulfill the Nation's social agenda, it mainly ignores them. The nonprofit organizations that administer social services funded by Washington are typically large and entrenched, in an almost monopolistic fashion. Even though "many smaller, community-based nonprofits aspire to secure public funding, they often face serious managerial and political obstacles to that goal."3 Thus, at all levels of government and in inter-governmental social service programs as well, "a relatively select group of large social-service and health nonprofits have long received the bulk of public funding."4

What proportion of Federal funding goes to the faith- and community-based organizations that play such key roles in the lives of suffering people and in neighborhoods all across the nation? It is impossible to know the exact percentage across Federal programs, but we have some indication of the share that such organizations receive from some Federal programs.

At the request of the White House Office of Faith-Based & Community Initiatives, the Office of Management and Budget asked HHS, HUD, Justice, Education, and Labor two questions: (i) what percentage of grant funding in a range of programs goes to nonprofit organizations; and (ii) of that percentage, how much has gone to faith-based groups and how much to community-based groups?

Data Collection Issues
The Agencies found it difficult to answer these questions fully, because a significant proportion of funding in their respective departments is distributed by formula grants to State and local governments, rather than via direct allotment to faith-based or other service providers. Formula grant recipients generally do not report back to the Federal Government on how they distributed the money. If a State extensively involves community organizations, for example, Federal officials would not necessarily know that information.

Federal Formula and Discretionary Grant Making


Total Grants

($ billions)

Formula Grants

($ billions)

Discretionary Grants

($ billions)

DOJ (OJP) (FY 2001)


2.0 (77%)

0.6 (23%)

DOL (FY 2000)


6.0 (88%)

0.8 (12%)

HUD (FY 2001)


25.6 (91%)

2.4 (9%)

ED (FY 2001)


23.9 (82%)

5.1 (18 %)

HHS (FY 2000)


160.2 (87%)

24.9 (13%)

To complicate matters, there are no standard Federal definitions of faith-based and community-based organizations, and the databases on discretionary grants do not provide any such identifiers (another indicator of systemic discrimination). Officials can search the grants databases for grantees with "religious sounding" names, but that crude strategy mistakenly organizations that include terms like St. Louis or St. Petersburg, while missing religious organizations such as Georgetown University and ignoring grassroots groups altogether.

A Glance at One Service Area - Child Care

A recent look at faith-based child-care providers notes that nearly one of every six child-care centers is housed in a religious facility. The nation's largest "chains" of child-care services are not KinderCare and La Petite but rather the Roman Catholic Church and the Southern Baptist Convention; and the number of centers in religious facilities is growing faster than the total number of centers (26% vs. 19% from 1997-99).5

Congress acknowledged religious charities' large role in this field when it approved Federal funding for child care for low-income families in 1990 and urged states to provide parents with certificates or vouchers that they could redeem at any approved center. Parents can use these vouchers at explicitly religious centers without raising any genuine constitutional questions.

By far, States prefer certificates and vouchers over contracts-in FY 1999, certificates were used to pay for care for 83% of the children helped with Federal funds. But what percentage of Federally funded child-care is provided in faith-based centers? No one knows. Asked what percentage of Federal child-care funds are distributed in New York to congregations and other faith-based providers, the head of the program said she did not know-the State, rightly, does not ask centers seeking eligibility whether they are religious or secular. But she pointed out that she had often visited church-based child care facilities that serve parents with Federally funded certificates, so she knew faith-based groups were involved but was unaware of the extent.

Discretionary Grants Directly to Providers
Notwithstanding these fundamental data-keeping problems, some Federal discretionary grants programs do keep track of faith and community-based grantees:

  • The Office of Justice Programs at DOJ estimates that in FY 2001 it will award only about 0.3% of total discretionary grant funds-one-third of 1%-to faith-based organizations ($1.9 million of $626.7 million) and 7.5% to community-based providers ($47.2 million).

  • At the Department of Education, in FY 2000, faith- or community-based organizations received 25 of the 1091 discretionary grants given in 11 programs-about 2% of the grants. The percentage was the same in FY 1999 and slightly less in FY 1998 and FY 1997.

  • In multiple rounds of competitive funding for Welfare-to-Work services (FY 1998 and 1999), Labor sought to include groups not traditionally involved in its programs. More than 1,800 applications arrived-2% of which were from faith-based organizations. Those groups eventually won 2% of the competitive grant funds (3% of the awards).

  • HUD's Continuum of Care process for the homeless has collected information to identify faith-based providers and reports that 399 such groups won about 16% of the funds ($139 million of a total of $896 million) in the FY 2000 competition.

  • In the HHS Adolescent Family Life grants program that funds abstinence education, 21% of the funds going to nonprofits went in FY 2000 to faith-based groups.

  • In Labor's Youth Opportunity Grant Program that underwrites employment and job preparation services, in FY 2000, 20% of the funds went to community-based organizations ($43 million of $220 million total) and 3% ($6.7 million) to faith-based groups.

Formula Grants to State and Local Governments
The few solid indicators available concerning formula grant funds that pass through State and local governments suggest that the share received by faith-based and other grassroots groups is equally small.

  • The Office of Justice Programs at DOJ estimates that in FY 2001 only about 0.3% of the formula grant funds-or one-third of 1%-will go to faith-based providers ($8.1 million of $2.7 billion total) and only about 0.2% to community-based groups ($5.4 million).

  • A special DOL study of the role of faith-based organizations in providing employment and training services in five cities discovered that the workforce investment boards (which receive Federal formula grants under the Workforce Investment Act) in all five cities contracted with faith-based organizations, but the amounts were not large: in Milwaukee, Baltimore, and Ft. Worth, 1% of contract funds went to religious groups; in San Diego 6% went to such organizations; and 10% in Pittsburgh.

  • Last year, in Wisconsin, which is one of the relatively few states that have sought to create equal opportunity for faith-based providers, as required by the 1996 Charitable Choice rules that govern the TANF (welfare) block grant, in the various administrative regions, faith-based groups received from a low of less than 1% to a high of 16% of total contract funds, which are a combination of Federal and State welfare funds.6

All of the figures reported should be used cautiously; they are fragmentary and not wholly reliable due to the various data problems identified above. Nevertheless, the numbers are highly suggestive: there is a striking disjunction between the service organizations that Federal grant funds predominately support and the organizations that actually provide most of the critical social services.

Why this disjunction? One reason is that some religious and grassroots organizations are not interested in seeking Federal funds for the services they provide. They may have theological objections to getting Government money for activities that they believe adherents should support, worries about becoming dangerously dependent on a distant funding source that may dry up tomorrow, or concerns about implementing government policies with which they might partially disagree. Most notably, many faith-based groups are concerned that the cost of Federal funds is the putative divestiture of much or all of their religious character.

Despite these concerns, numerous national, regional, and local coalitions of community-serving religious groups have expressed an eagerness to participate more fully in public/private partnerships that deliver social services, if the conditions are right. Likewise, systematic survey data suggest that a large proportion of urban community-serving congregation leaders would welcome a fair chance to help administer Federal social service programs in their neighborhoods.7

The neighborhood-based charities, both secular and religious, that daily supply so much indispensable help to needy families and neighborhoods, receive little support from the Federal Government in part because the Federal grants system is inhospitable to their involvement. A careful analysis of the rules and practices in a large sample of programs in the five Cabinet departments shows that these organizations face myriad barriers in seeking Federal support for their vital good works.

Next: "Barriers: A Federal System Inhospitable to Faith-Based and Community Organizations"

2 Ram A. Cnaan, with Robert J. Wineburg and Stephanie C. Boddie, The Newer Deal: Social Work and Religion in Partnership (New York: Columbia Univ. Press, 1999), 275f. See, also, e.g., Mary Jo Bane, Brent Coffin, and Ronald Thiemann, eds., Who Will Provide? The Changing Role of Religion in American Social Welfare (Bolder, Col.: Westview Press, 2000); E. J. Dionne, Jr., ed., Community Works: The Revival of Civil Society in America (Washington, DC: Brookings, 1998); Virginia Hodgkinson, et al., From Belief to Commitment: The Community Service Activities and Finances of Religious Congregations in the United States, 1993 Edition: Findings from a National Survey (Washington, DC: Independent Sector, 1992).

3 Peter Frumkin, "After Partnership: Rethinking Public-Nonprofit Relations," in Bane, et al., eds., Who Will Provide?, 199.

4 Id.

5 R. Neugebauer, Religious Organizations Taking a Proactive Role in Child Care, Child Care Information Exchange 18 (May 2000).

6 Amy Sherman, Testimony to the Oversight Hearing on "State and Local Implementation of Existing Charitable Choice Programs," Committee on the Judiciary, Subcommittee on the Constitution, U. S. House of Representatives, April 24, 2001.

7 For example, see Ram A. Cnaan and Stephanie C. Boddie, Black Church Outreach, Center for Research on Religion and Urban Civil Society, Philadelphia, PA, CRRUCS Report 2001-1, p. 19, reporting that 60% of all community-serving congregation leaders in Philadelphia viewed public collaboration with the Federal government under Charitable Choice as an option they would like to consider. That would mean some 1,200 prospective applicants in Philadelphia alone. See also Mark Chaves, "Religious Congregations and Welfare Reform: Who Will Take Advantage of `Charitable Choice'?," American Sociological Review, 64 (1999), who reports that 45% of congregations sampled in a national survey would apply for government funds, and 64% of predominantly African American congregations were interested in government funds.