Barriers to Faith-Based Organizations Seeking Federal Support
The First Amendment to the United States Constitution both secures religious liberty and protects against governmental establishment of religion. When it comes to Federal support for nongovernmental providers of social services, however, officials have focused much more on avoiding the prohibition than on honoring the protection. Congress and Government officials occasionally limit the participation of religious organizations on sound constitutional grounds. But many Federal policies and practices-including regulations, guidelines, program materials, decision-making criteria, awards-committee viewpoints, etc.-go well beyond sensible constitutional restrictions and what the courts have required, sharply restricting the equal opportunity for faith-based charities to seek and receive Federal support to serve their communities. The Government's restrictive policies and practices usually are good-faith efforts to keep within constitutional boundaries. But often they have gone too far, even as the courts adopt less restrictive constitutional guidelines.

Barrier 1: A Pervasive Suspicion About Faith-Based Organizations
There is one overarching impediment to full and equal opportunity for religious service organizations to receive Federal financial support: an overriding perception by Federal officials that close collaboration with religious organizations is legally suspect.

Officials know that there have long been many and varied Federal collaborations with religiously affiliated providers of social services. Some Federal departments, over the past few years, have reached out to faith-based organizations. The Department of Justice's Office of Juvenile Justice and Delinquency Prevention, for example, works with the National Center for Neighborhood Enterprise in a national campaign to reduce youth violence and with the Congress of National Black Churches to provide training and technical assistance to projects that curb substance abuse and prevent violence. Recent U.S. Supreme Court decisions have shifted markedly over the past few decades toward a neutrality framework that honors evenhandedness and pluralism, allowing the Government to treat all potential providers equally without singling out some as being "too religious" for Government support.⁹

But Federal officials, and State and local officials participating in Federal formula grant programs, often seem stuck in a "no-aid," strict separationist framework that permitted Federal funding only of religiously affiliated organizations offering secular services in a secularized setting, and deny equal treatment to organizations with an obvious religious character. As the Labor Department's report notes, reviewers of grant applications assume that Jefferson's "wall of separation" metaphor automatically disqualifies all but the most secularized providers, leading to Federal resistance to collaborating with religious groups, and thus the actual exclusion of faith-based organizations despite the absence of any constitutional or statutory basis. One Education Department official asserted that the Constitution flatly forbids the use of grant funds even for activities that merely have a religious component. Such restrictive attitudes beget an administrative bias against religion and religious organizations where the Constitution requires that there be none.

Barrier 2: Faith-Based Organizations Excluded from Funding
Some Federal programs ban outright all religious organizations from applying for funding. For instance, HUD's Section 202 and 811 programs that fund supportive residences for the elderly and for persons with disabilities, respectively, do not permit "religious organizations or ones that have religious purposes" to be project owners, although they may be sponsors who initiate a project. This ownership restriction is stated explicitly in the program handbooks and is portrayed as a constitutional requirement, but it has neither a constitutional nor a statutory basis. (Ironically, over the more than 35-year history of the Section 202 program, more than two-thirds of the sponsors of the housing for the elderly have been religious organizations).

The problem, however, is usually more subtle: religious organizations face an unwelcoming environment or are required not to be overtly religious to be eligible for funding. Given the widespread presumption that funding faith-based groups is constitutionally suspect, the absence of affirmative language in program rules and funding announcements listing religious organizations as eligible easily can be taken by program officials and by potential religious applicants as mandating their exclusion. This impression is strengthened when the silence about eligibility is accompanied by a lengthy list of prohibited religious activities. The Department of Education's general grants regulations include an extended list of prohibited religious practices. Some Labor solicitations for grant applications similarly say nothing about the eligibility of religious organizations but itemize various prohibited activities.

It is, of course, possible that the listed activities may in fact be constitutionally prohibited uses of government grant funds, in which case they must be forbidden and the restrictions should be brought to the attention of potential applicants. However, when restrictions on religious activities are listed without an equally strong affirmation of eligibility and equally emphatic positive guidance about how faith-based providers can legitimately collaborate to deliver assistance, correct information about restricted practices may have the effect of chilling participation by religious service groups.

Some Federal programs divide religious organizations into two categories and then exclude groups in one category from funding. Organizations considered "pervasively sectarian" or "too religious" are suspect; those that are ruled "secular enough" can apply. Such invidious categorizations, gleaned from trolling through an institution's religious beliefs, is pervasive at HUD, which uses the term "primarily religious" for faith-based organizations considered to be problematic.

HUD's regulations-though not the enabling statutes-for Community Development Block Grants, which provide Federal funds to localities to support nongovernmental services, and for the HOME program, which gives funds to localities that in turn enlist community groups to rehabilitate housing, prohibit funding "as a general rule" from going to "primarily religious" organizations, "for any activities, including secular activities(emphasis added)." Under the HOME program, a "primarily religious" organization can establish a "wholly secular entity" that may then take part in the program. In the CDBG program, a further regulation provides that a "primarily religious" organization may take part, if it agrees to a long list of restrictions-including forfeiting its well-established freedom under Federal law as a religious organization to staff on a religious basis.

Such HUD regulations were developed in response to now obsolete Supreme Court cases with the intention of increasing involvement by religious organizations. Faith-based charities do get some funding under these programs when the rules are flexibly applied. However, the convoluted provisions cast doubt on the eligibility of faith-based groups with a distinct and overt religious character and put them under pressure to marginalize or eliminate various aspects of their religious character and autonomy.

The division into acceptable and problematic religious organizations is not required by current Supreme Court precedent.¹⁰ Lacking a clear and fixed meaning, the categorization requires an intrusive case-by-case determination by HUD staff, who are forced to delve into the authenticity of religious beliefs, an inquiry that a recent Supreme Court plurality derided as "not only unnecessary but also offensive."¹¹ Because there is no clear guidance, HUD field officials and their State and local government partners apply the rules inconsistently even within a single program, creating additional complications for faith-based applicants.

Similar problems occur in the Department of Education's "Even Start Family Literacy Program," that gives formula grants to States to fund local partnerships between schools and other local entities, including nonprofit organizations. The authorizing statute does not exclude religious nonprofit organizations. However, the Agency addresses that "pervasively sectarian" organizations may not be directly funded by government. Thus they can become part of a Federally funded partnership only if they are subordinate to "nonsectarian" partners. Other Department staff, while not ruling out funding for "pervasively sectarian" organizations in general, believe that eligibility can only be established after a case-by-case assessment of a group's religious character.

Barrier 3: Excessive Restrictions on Religious Activities
Some government rules require faith-based providers to endure something akin to an organizational strip-search. Certainly, some restrictions on how religious organizations can spend government grants are plainly required by the Constitution. But given the general wariness about the constitutional propriety of funding faith-based organizations, and the heightened suspicion about collaboration with "pervasively sectarian" or obviously religious groups, Federal grant programs can be inappropriately restrictive.

Under the Workforce Investment Act, core or basic worker training activities are provided at Federally funded One-Stop Centers, with additional Federally funded services provided by independent vendors through a voucher-like system in which the individual selects the program or provider that suits him or her best. Notwithstanding the indirect nature of the funding, DOL requires States to agree to not permit Federal workforce development funds to be used to train or employ a participant in "sectarian" jobs or activities. However, the U. S. Supreme Court has made it clear that when a program or provider is chosen by a private citizen and not designated by Government, such a restriction is not justified. In the landmark 1986 case, Witters v. Washington Dep't of Services for the Blind, 474 U.S. 481 (1986), the unanimous Supreme Court ruled that a blind student could use State vocational funds to obtain seminary training. Despite this 9-0 decision from the Nation's highest court, the Department of Labor has resisted the notion that voucher-funded employment training as a church janitor, mosque receptionist, or landscaper for a synagogue is constitutionally acceptable.

Head Start programs are often located in houses of worship, that are sometimes locally pressured to remove or cover up religious art, symbols, and other items, although there is no such requirement in the statute, regulations, or official HHS guidance. HUD regulations for Community Development Block Grants, among other programs, expressly require religious organizations not only to agree to avoid giving "religious instruction or counseling" but even to affirm that they will "exert no religious influence" at all in providing the Federally funded assistance. Such exceedingly vague language chills the participation of many faith-based providers, who have no intention of conducting government-funded worship services, but who fervently believe that their social services should be informed and prompted by their religious impulse and that the lives of staff members should set a good example and influence others positively. Some faith-based organizations applying at the local level for CDBG funds have been informed that they would qualify for the support only if they first removed references to "God" from their mission statements or stripped their walls clean of religious symbols.

The Education Department's "Even Start" program, as noted above, permits a "primarily religious" organization to collaborate via a partnership, but not to administer the Federal funds. Only the partnership as a whole (if it is incorporated) or a non-sectarian partner-any nonsectarian partner-can be entrusted with the funds.

It is not Congress, but these overly restrictive Agency rules that are repressive, restrictive, and which actively undermine the established civil rights of these groups. Such excessive restrictions unnecessarily and improperly limit the participation of faith-based organizations that have profound contributions to make in civil society's efforts to serve the needy.

Barrier 4: Inappropriate Expansion of Religious Restrictions to New Programs
Relying on outdated application of obsolete case law, HHS has not only restricted participation of faith-based organizations in the Adolescent Family Life Program that funds abstinence education ($24.3 million in FY 2001), but has also extended guidance beyond that program to other abstinence programs by HHS's Maternal and Child Health Bureau (MCHB).

In enacting the AFL program (Title XX of the Public Health Services Act) in 1982, Congress specifically authorized the participation of religious groups to address problems of teenage promiscuity and nonmarital pregnancy. When the Supreme Court ruled, in 1988, on a challenge to the Program's constitutionality, it upheld the statute; but, using reasoning it has now backed away from, the Court ruled that providers determined to be "pervasively sectarian" could not receive funding (Bowen v. Kendrick). A subsequent court settlement agreement imposed specific limitations on the program. The Office of Public Health and Science at HHS, which runs the AFL program, developed a checklist to ensure that grantees were not "pervasively sectarian," asking, for example, to what extent an applicant was controlled by a church or other religious body, whether clergy or other religious leaders served as staff or volunteers, and whether the applicant's mission statement was religious. Applicants received a statement, "Guidance to AFL Grantees," detailing the restrictions on religious providers, such as an instruction to remove or cover up, if possible, religious symbols in the places where social services were to be offered.

The AFL settlement agreement expired in 1998. The Court has now all but abandoned the "pervasively sectarian" standard it used in the AFL case, and it has loosened other restrictions on religious activity. Nevertheless, OPHS has maintained many of the restrictions on faith-based involvement in the AFL program. The Maternal and Child Health Block Grant (MCHB) references many of those AFL restrictions as guidance in two entirely separate, though related, abstinence education programs that it runs. The Abstinence Education Grant Program (Title V of the Social Security Act) was authorized under the 1996 Federal welfare reform law and provides $50 million per year in formula grants to States to support abstinence education by community groups. Community-Based Abstinence Education projects received $20 million for FY 2001 under the SPRANS allocation of the MCHB to States. States and potential grantees that request guidance from MCHB receive restrictive advice for religious involvement modeled on the now-outdated AFL settlement, sometimes including the "Guidance to AFL Grantees."

By maintaining the settlement restrictions in the AFL program beyond the deadline and expanding them without statutory or court justification to two completely separate programs-in the face of several intervening Supreme Court decisions embracing a theory of neutrality and nondiscrimination-HHS unnecessarily chills faith-based participation in some $94 million of funding for programs that have a strong values orientation that might best be provided by groups rooted in the wide diversity of America's religious and values communities.

Barrier 5: Denial of Faith-Based Organizations' Established Right to Take Religion Into Account in Employment Decisions
Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, national origin, gender, and religion, while simultaneously permitting religious organizations to staff on a religious basis. This provision, which allows covered religious groups to take religion into account in hiring, is itself a vital civil rights safeguard enshrined in Federal law for more than a generation. Congress passed this protection 37 years ago, and reaffirmed and extended it in the Equal Employment Opportunity Act of 1972 to cover not only core religious staff but also those engaged in a ministry's non-religious service activities. In a unanimous 1987 ruling, Corporation of the Presiding Bishop v. Amos, 483 U.S., 327 (1987), the U.S. Supreme Court upheld the constitutionality of this core safeguard.

Moreover, from 1964 forward, this statutory religious staffing protection has been available irrespective of whether a charity receives Government funds. Several courts, both State and Federal, have considered this precise issue and ruled that a religious group's ability under Title VII to foster what the Supreme Court in Amos called a "shared religious vision" isn't forfeited just because it delivers Government-funded social services.¹² (Title VII does not, however, exempt religious charities from the ban on employment discrimination based on race, color, national origin, or sex. Moreover, if delivering Federally funded social services, faith-based groups must serve clients of any background).

Unless the specific statute authorizing a Federal funding program includes different rules on employment discrimination, the time-honored freedom to staff on a religious basis afforded by Title VII remains the baseline for covered religious groups and is the controlling Federal law. Nevertheless, Federal agencies sometimes require faith-based social service charities interested in partnering with Government to surrender their long-held freedom to define their religious mission by hiring like-minded, like-hearted staff, even when Congress, when enacting the program, refused to limit the Title VII religious staffing protection of participating faith-based groups.

The consequence of this administrative misapplication of the law is, at best, widespread confusion about requirements on the part of officials and religious organizations. All too often, religious applicants for Government funding are required to sacrifice their well-established right to select staff in a manner that upholds their religious vision even though Congress (affirmed by a unanimous Supreme Court) has assured them of that right through venerable civil rights laws. The result is a climate of tremendous legal uncertainty, that ultimately harms our most needy and neglected citizens and those grassroots Samaritans, both sacred and secular, who serve them. Additionally, charities' employment rights and religious liberty are violated; faith-based providers are tentative and operate in fear of losing funding; many groups are discouraged altogether from opening up new social-welfare initiatives or expanding their good works; and people in distress are deprived of effective and enhanced service options.

In not a single one of the five Departments under review do the statutes for all of the Department's funding programs require religious organizations to relinquish their statutory ability to staff on a religious basis in order to take part. But officials are often very careless about the law's actual requirements. For example, none of the Education Department's grant programs that were reviewed, whether formula or discretionary, statutorily limits the Title VII hiring ability of religious organizations. Nevertheless, many program officials have the mistaken impression that religious groups do not have this Title VII protection. Program application materials and the Department's standard form for most grantees nowhere reference the Title VII religious staffing safeguard for faith-based groups but instead include general statements about nondiscrimination in services and employment that sow confusion about the rights of faith-based charities.

Barrier 6: Thwarting Charitable Choice: Congress' New Provision for Supporting Faith-based Organizations
The Charitable Choice concept was crafted in the mid-1990s to remedy overly restrictive rules and confusion about the constitutional requirements for Government collaboration with faith-based providers. It aims to challenge and eliminate perverse bureaucratic rules and regulations that have often hampered civic-minded, public-spirited partnerships between Government and faith-based social service providers.

Under the old rules, community-serving religious groups seeking support often had to conceal, and sometimes even compromise, their distinct religious character - the very quality that sparked and sustained their success in mobilizing volunteers and achieving uncommon results. Charitable Choice was written to respond point-by-point to various inappropriate restrictions by explicitly protecting religious charities from pressures to secularize their programs, abandon their religious character, or sacrifice their autonomy. At the same time, it includes specific provisions to uphold the religious liberty of clients and to fulfill the constitutional requirements concerning Government funding of religious activities.

In sum, Charitable Choice attacks the anti-religious bias that pervades too many statutes, regulations, and practices, ensures that groups use Government funds for public purposes, and provides a clear set of guidelines to discipline and structure these needed collaborations. Further, it accomplishes the following:

• It clarifies and codifies the right of faith-based groups to participate by clearing away misperceptions and doubts about whether religious groups may deliver Federally-funded social services;

• It replaces government suspicion of religious providers with a welcoming environment by giving a "green light" to expanded collaboration with Government and making such partnerships plausible and possible;

• It ratifies and gives a legal foundation to current flexible practice by clarifying that the Constitution does not require 100% secularism, but neutrality and equal opportunity instead;

• It overcomes anti-faith barriers in Federal programs by overturning restrictions on participation and activities that are not necessitated by the Constitution;

• It has enriched the mix of service providers where it has been implemented by States, like Democrat-led Indiana and Republican-led Texas that have been able to offer people a wider variety of providers;

• It enables formerly excluded groups to offer their effective services by freeing local officials to create new collaborations that involve faith-based charities that had earlier been wary of partnering with Government;¹³

• It helps current religiously affiliated providers to better fulfill their service mission by permitting established groups like Lutheran Social Services to get rid of the excessive Government-imposed limits that have wrongly hobbled services offered by religious groups and thus kept them from better integrating a moral dimension into their programs; and

• It builds on successful principles in other areas of Federal funding - including internationally - by borrowing fruitful lessons from other Federal models where the Charitable Choice principles of accountability, performance, pluralism, and religious liberty are valued and applied.

By stressing evenhandedness and prizing performance over process, Charitable Choice eliminates the anti-religious bias and the secularizing pressures aimed at religious charities. It requires officials to ask not "Who are you?" but rather "What can you do, and how well can you do it?" It guarantees that faith-based groups have an equal opportunity - no better, no worse - to deliver Government-funded social services. It does not grant religious charities any special favors but ends the special burdens that have often hampered them. Charitable Choice prohibits the Government from using religion as a line-drawing criterion for receiving Federal funds. Administrative prejudice is forbidden; and so is administrative favoritism.

Repeatedly since 1996, and always by bipartisan majorities, Congress has acted multiple times to bring Federal grants programs under these new rules. For example, Congress:

• Enacted Charitable Choice as part of the 1996 Federal welfare reform law (PRWORA) to cover state and local spending of TANF funds to obtain services;

• Placed the new specialized Welfare-to-Work program for hard-to-employ recipients under the same provision in 1997;

• Added Charitable Choice language in 1998, when it reauthorized Community Services Block Grants, which provide core funding for Community Action Agencies and;

• Extended Charitable Choice in 2000 to cover SAMHSA's Federally funded substance abuse prevention and treatment services.

The literal language of the statutes makes it clear that these new rules are not optional for Federal, State, or local officials using the covered funds. These are mandatory rules to be followed, whenever these funds are used to purchase services from nongovernmental providers. However, save for one limited exception, Charitable Choice has been essentially ignored by Federal administrators.

The exception is Welfare-to-Work (WtW) competitive grants, a 2-year, mandatory grant program operated by the Department of Labor. In keeping with the intent of Charitable Choice, Labor worked hard to inform faith-based (and community-based) organizations that they were eligible for the funding, to facilitate their applications, and to ensure that they were able to fulfill grant requirements and provide effective assistance. An unusually large number of applications were received and six faith-based organizations received a total of about $16 million dollars (about 2% of the total competitive grant funds).

However, except for noting the eligibility of faith-based groups, DOL did not elaborate on the requirements of Charitable Choice in its WtW competitive grants. And in administering WtW formula grants to States, DOL merely noted that Charitable Choice was part of the governing legislation, otherwise leaving it up to State and local governments to comply with or to ignore the new rules, at their own discretion. Application of Charitable Choice to the Labor program did not result in any thorough examination of how the landmark rules should affect grant standards or the Department's interpretation of constitutional requirements.

The other three programs covered by Charitable Choice are administered by HHS. The new rules for funding substance abuse services were adopted relatively recently and SAMHSA is still working out the consequences for its discretionary and formula grant programs. But Charitable Choice has been the governing law for TANF block grants since 1996 and for Community Service Block Grants and CSBG discretionary grants since 1998. Yet HHS has done very little to apply the rules to its own grant making or to ensure that the State and local governments that received covered funds adjusted their own procurement rules to comply with the congressional directives.

In the case of TANF funds, Congress limited the authority of HHS to promulgate regulations and did not authorize Charitable Choice regulations. Nevertheless, although HHS routinely provides other forms of information and advice to guide the expenditure of formula grants, it has supplied virtually no guidance at all to States about the landmark Charitable Choice requirements. Some attention was paid to Charitable Choice as an element of welfare reform through a few conferences and in other minimal ways. However, the only specific guidance given on this significant topic was a single-paragraph reply to an e-mail query from one State. When States submitted their welfare reform plans they were not asked how they would comply with Charitable Choice and States are not asked now whether they have created the required level playing field for faith-based providers, when they annually spend their billions of Federal dollars to contract for services from nongovernmental organizations.

After Charitable Choice was added to the CSBG formula grant program, HHS issued some guidance to States about the new rules, but the guidance left out key provisions, such as the affirmation of the right of religious organizations to take religion into account in their employment decisions and the prohibition on the use of Government funds for inherently religious practices such as worship and proselytization. Although HHS does monitor State compliance with CSBG requirements, it has not evaluated implementation of Charitable Choice. In the absence of clear HHS guidance, misleading information about the requirements has been disseminated by special interest groups. Only within the last few weeks has HHS, with the assistance of the HHS Center, started to provide specific guidance on the implications of Charitable Choice for CSBG formula grant recipients.

Next: "Barriers to Community-Based Organizations and Other Small and Newcomer Organizations"

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