eNews for FBOs--June 18

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That old myth is getting supercharged again: that the solution to faith-based organizations that might improperly engage in religious activities in a government-funded program is to require that the government-funded services be offered in a separate 501(c)(3) organization. "Just make those intensely faith-based groups set up a separate 501(c)(3) organization and the constitutional concerns will go away" is the cry once again. In fact, there is a good reason for a house of worship to create a separate organization to provide government-funded services: that organizational separation keeps the church or synagogue from being subject to intrusive government rules and investigations that are appropriate for a social service provider but not for a house of worship. Moreover, this kind of organizational development helps people focus on the two different missions (worship plus help for members versus "this worldly" help to others) and makes it easier to keep separate accounting of the different kinds of funds.

But a 501(c)(3) is no magical Jeffersonian cure for church-state boundary questions. Why not? Consider this: a 501(c)(3) can be a thoroughly religious organization, even a "pervasively sectarian" organization in which religion is expressed everything it does, from hiring to staff meetings to services provided. A 501(c)(3) that isn't abiding by the rules for direct government funds can just as easily as a church wrongly mix prayer or religious instruction into government-funded services. And a church can-many do-follow the rules that accompany government funding without ever having set up a whole separate organization (although-see above-there are good reasons to create that institutional division).

An episode from the past: after Congress passed and President Clinton signed Charitable Choice into law the first time as part of welfare reform (1996), the Center for Public Justice, a 501(c)(3) nonprofit think tank, published a guide to this new "level playing field" provision. A year or two later, a State of California agency ordered a copy so that it could be sure it was following this new federal requirement to permit equal competition for state welfare funds by faith-based organizations. The Center sent the guide, along with an invoice. Back came a multi-page "vendor qualification" document to be filled out before the state agency could send the $5.00 for the guide it had received. One key question: Does this vendor discriminate on the basis of religion when it hires staff? The Center (a faith-based think tank) of course hired only Christians and said so on the form. The California agency's response: We can't do business with you! The Center was too religious, as shown by its religious staffing policy. However, the state agency kept the guide to Charitable Choice. The Center was too religious to be paid, but its legal and policy guidance was just what the state needed-trustworthy advice for official decisions-so it kept the booklet! The Center's 501(c)(3) status didn't get it the $5 from the state, or keep it from being regarded as just "too religious" for government work.