Proceed with Caution
Stanley Carlson-Thies July/August 2024Faith-based charities come to grips with new church-state rules for government funding.
The Biden administration recently has revised the regulations that govern how faith-based organizations can participate in federal, state, or local social service programs funded by federal dollars. These rules cover a broad range of services, from low-income housing and workforce development programs to welfare and homeless services, after-school programs, and more.
That’s a wide and important sweep of services, so it is vital that the rules do not push out faith-based organizations that desire to work with government as a way of serving their neighbors. Some experts have sounded the alarm about the revisions, concerned that organizations will not be able to hire staff faithful to their religious standards and that their ability to offer services reflecting their religious inspiration is being suppressed—just at a time that the U.S. Supreme Court is warning governments not to restrict religious organizations more than secular ones.
The Biden revisions do have troubling elements, and faith-based organizations should take note. But ministries should not be deterred from operating in the public square to the good of people in need and the common good of our society.
From “No Aid” to “Equal Opportunity”
A revolution has occurred over the past 30 years in the church-state rules for government funding. A “no aid to religion” principle, thought to be required by the First Amendment’s establishment clause, has been replaced by an “equal treatment” requirement: faith-based organizations, even houses of worship, are eligible to partner with government. But can the services funded by government, services the government has decided should be available to everyone with some particular need, include religious teaching and activities? After all, some of those in need—the beneficiaries—may object to those teachings or to all religion. How then will they receive help?
A solution was devised in 1996 and, though imperfect, has continued as the baseline. Called Charitable Choice, it was signed into law by President Bill Clinton that year as part of federal welfare reform and later added to some other federal programs. When President George W. Bush created the White House Office of Faith-based and Community Initiatives and faith-based centers in major federal agencies, he used the regulatory process to apply this Charitable Choice solution to all social services funding administered by those nine major agencies or by state and local agencies that work with them. These “equal treatment” regulations have been modified several times, and now by the Biden administration.
“Direct” and “Indirect” Funding
With these baseline rules, faith-based organizations could compete for funding in the same way as secular social service providers—with their religious identity specifically protected. When a faith-based organization was awarded a government grant—called “direct” funding—it could offer religious teaching and activities to beneficiaries, but it could not incorporate the religion into the government-supported social service nor require beneficiaries to participate in it. And a beneficiary who objected to the faith-based provider could ask the government for a referral. Most of the time this is how federal funding supports social services. One or two organizations receive funding to provide the social service in some area, with no attempt to provide choices.
But sometimes choice is a key feature. The government offers vouchers or scholarships to beneficiaries, and they select a provider, whether secular or religious. With such “indirect” funding, a faith-based provider can incorporate religion into the federally funded service, and then beneficiaries have the option of picking a wholly secular service or one that includes religious activities and religious teaching. This is how federal dollars support higher education, allowing students to take their federal aid to deeply religious colleges and even seminaries, and how federal dollars support childcare for poorer families, enabling families to choose church-based care if they wish. The Bush administration developed a drug treatment program, Access to Recovery, that offered beneficiaries a range of services, some of which incorporated religion.
But the usual practice is “direct” funding, and so, while faith-based providers are welcome to participate, their religion must be kept to the side. They can offer, say, biblical teaching on dealing with workplace challenges or urge a commitment to God as a person wrestles with an addiction, but this cannot be the core of the service supported by federal dollars. And this means that, in effect, many faith-based providers are excluded, even though there is supposed to be a level playing field, an equal opportunity to compete for federal funding.
Is There a Better Way?
In a series of decisions, the U.S. Supreme Court has buried the old idea that government should privatize religion. Instead, it has ruled that if a state offers funding so that playgrounds can be resurfaced, it cannot simply refuse to award the support to a church (Trinity Lutheran Church v. Comer, 2017). If, to combat the spread of COVID-19, a government restricts gatherings, it cannot privilege secular meetings over religious ones (Tandon v. Newsom, 2021). If a state makes support available to private, and not only public, schools, it cannot exclude religious schools because they are religious (Espinoza v. Montana Dept. of Revenue, 2020) or because their teaching is religious (Carson v. Makin, 2022).
What does this reading of the First Amendment entail for social services funding? The current Court has not yet ruled on such a case. And the social services situation is distinct, in my view, because usually only one provider is funded for a locale, unlike the variety and choices with playgrounds, gatherings, and schools. If a provider that incorporates religion into its services gets the grant, what happens to the beneficiaries committed to a different religion or to none?
Responding to the Court’s interpretive trajectory, the Trump administration changed the regulations to expand faith-based participation. The rules had required faith-based, but not secular, providers to bear the burden of facilitating referrals and to inform beneficiaries of their rights. However, the Trump rules simply dropped these requirements instead of spreading the burden of fulfilling these important tasks. Under the Trump administration regulations, funding would be deemed “indirect,” allowing faith-based providers with services that incorporate religion to participate, if beneficiaries could choose among providers—even if all of the choices were religious. And the beneficiaries would have to participate in the religious elements if these were important to the service.
But now the Biden revisions have reversed those Trump changes—in part. The referral and notice requirements have been restored, but in an even-handed way: secular as well as religious providers must give the notice of rights, and it will be government agencies, not the faith-based providers, that will facilitate requested referrals.
The “indirect” funding changes were changed again. Beneficiaries are again free to refuse to participate in religious activities incorporated into a social service. And for funding to be considered “indirect” such that faith-based providers with services that incorporate religion can participate in the federally funded program, the presence of a secular option for beneficiaries will be important—but not essential. The administration says this: If it turns out that some of the participating providers do include religion and some of the beneficiaries need a secular choice, then the government must find for them a secular alternative—or it might instead demand that the faith-based providers push all of their religious teaching and activity out of the funded social service as if they had accepted a “direct” funding grant.
This is not a viable solution. Many beneficiaries will need a secular choice, which cannot be conjured up at will. And breaking a signed agreement with a faith-based provider and requiring it to drastically reconfigure the service it had promised to deliver is an unacceptable demand that surely violates administrative law. But the Trump arrangement also was not viable. To be sure, faith-based organizations whose services include religious elements ought not to be sidelined, excluded from partnership with government. What they offer might be just what some or many beneficiaries desire to receive; what they offer may best fulfill the purposes of the funding: effective social services. And yet it cannot be right that when the government provides funding so that everyone with some particular need can be assisted, some or many of those people will discover that the only available provider has incorporated into its social service various religious activities and teaching that are religiously unacceptable.
The underlying problem is that there are too few choices in government-funded social services. It would be better for faith-based providers, and also for beneficiaries, if the default pattern was “indirect” funding that offers multiple choices to beneficiaries, who, after all, are themselves diverse in convictions, needs, expectations, values, and preferences. This does not require an elaborate system of vouchers, but it does require that government officials recruit diverse providers and have ready a nonreligious social service for those beneficiaries who seek such.
What About Hiring?
It is well established that a faith-based organization that accepts government funds does not give up its Title VII freedom to use religious criteria in its employment policies. The Court, in its Bostock decision (2020), ruled that Title VII’s ban on sex discrimination in employment entails a ban also on discrimination based on sexual orientation and gender identity, although the Court added that it was ruling only about secular employers. May, then, a faith-based provider that has religion-based conservative standards concerning sexuality decline to hire, for instance, an applicant in a same-sex marriage? The Trump administration modified the funding regulations to affirm that such action would not constitute illegal job discrimination. The Biden administration, in revising the regulations, stressed that it held the opposite view. So it took the Trump language out of the regulations—but it did not add new language obligating faith-based providers to hire without regard to sexual orientation and gender identity. Faith-based organizations already know the Biden administration’s determination to advance LGBTQ rights. What is binding, though, is the actual regulatory language. Further, as the administration knows and acknowledges, religious organizations have multiple constitutional and statutory protections for their religious identity and religious exercise.
What Is to Be Done?
Whatever the season, and certainly now, wisdom dictates that faith-based organizations be public about how their policies, identity, and practices are rooted in specific religious and moral convictions. American law and principles provide strong protections for religious organizations—but the organizations have to be publicly religious and consistent in how they put their convictions into practice.
Faith-based organizations that believe a particular social service ought to include religious activities and religious teaching should now, as before, investigate whether the rules that accompany government funds will accommodate such inclusive services or instead require a separation. We should recall that separation does not mean that beneficiaries must be treated as though religion was irrelevant, but it does require care in how a service is designed and carried out, and that beneficiaries are only invited, not pressured, into participating in the separated religious activities.
American society is becoming not only more diverse but also more secular and even more anti-religious. But there are many protections for religious exercise, including protections for the operations and identity of faith-based organizations. And even now, the church-state rules that apply to the federal funding of social services are, if imperfect, in many ways supportive of faith-based social services. Serving in the public square, serving with the support of government funds, remains a viable way for faith-based organizations to love their neighbors.