December 4th, 2014

There is in the Senate strong pressure for quick passage of bill S. 2646, the Runaway and Homeless Youth and Trafficking Prevention Act (sponsor:  Sen. Patrick Leahy, D-VT), which would reauthorize the long-standing Runaway and Homeless Youth Act, which funds government agencies and private organizations to provide needed services.  Among other changes, S. 2646 would add this sweeping nondiscrimination requirement to the existing program:

 

SEC. 386B. NONDISCRIMINATION.

(a) IN GENERAL.--No person in the United States shall, on the basis of actual or perceived race, color, religion, national origin, sex, gender identity (as defined in section 249(c)(4) of title 18, United States Code), sexual orientation, or disability, be excluded from participation in, denied the benefits of, or subjected to discrimination under any program or activity funded in whole or in part with funds made available under this title, or any other program or activity funded in whole or in part with amounts appropriated for grants, cooperative agreements, or other assistance administered by the Administration for Children and Families of the Department of Health and Human Services.

 

In principle it is right that a nondiscrimination obligation is placed on organizations that receive this funding: after all, one major reason why young people run away from home and become vulnerable to trafficking is because of being ill-treated, including being discriminated against due to disfavored views or behavior. 

 

But the language quoted above goes far beyond prohibiting providers of services from discriminating against young people who need help. It reaches into the private organizations themselves, applying its sweeping nondiscrimination requirements to their internal operations, all of a sudden prohibiting them from engaging in otherwise legal and long-standing practices. 

 

And its chilling effect on faith-based participation would go very far beyond the particular program named in the bill. Notice the last lines of the provision, applying the broad nondiscrimination requirement far beyond the named program to all grant programs operated by a major section of the huge federal Department of Health and Human Services. That major section -- the Administration for Children and Families -- administers the federal welfare program (TANF), child-care funding for low-income families, refugee resettlement programs, abstinence programs, adoption and foster-care funding, marriage-strengthening and fatherhood programs, and much, much more. These are all federal programs that have welcomed the extensive participation of faith-based service providers, but their involvement would be chilled by this provision.

 

The provision would ban the common practice of faith-based organizations assessing the religious compatibility of potential employees before hiring them -- even though this "religious staffing freedom" is built into the half-century old landmark Civil Rights Act. To take part in a program with this sweeping nondiscrimination provision, the religious organization would have to appeal to the Religious Freedom Restoration Act (RFRA), and hope that government officials would understand RFRA and the religious staffing freedom. That's because this nondiscrimination provision doesn't have an exemption for religious staffing by religious organizations, even though that practice is legal and widespread.

 

The application of the ban on sexual orientation discrimination to faith-based organizations would also suppress their participation. When they staff by religion, they are seeking employees who embody and reflect the religious and moral values of the organization and its faith, and so they watch for faithful beliefs and also faithful conduct. But that common practice is subjected to second-guessing by this provision. The organization's religious staffing decisions, protected by RFRA, might well be challenged by a job applicant who claims that a decision was an exercise of illegal sexual orientation discrimination, even though the sexual conduct code is applied to all employees.

 

A faith-based organization that, quite legally, takes account of religion when selecting employees and which requires those employees to live up to a conservative sexual ethic, would have two choices: (1) forgo participation in this funding, no matter how excellent it may be in serving homeless youth and stopping human trafficking or providing any of a very wide range of other services, and no matter how much of its own money it adds to the federal funding; or (2) abandon the human resources policy that it adopted to ensure that all of its staff is attuned to the organization's faith-shaped way of serving. 

 

The Senate should revisit the language before voting on the bill and sending it to the House and rewrite the nondiscrimination requirement to focus it where it belongs: protecting homeless youth, ensuring that they get the services they need. Focus it tightly to protect the youth while not excluding faith-based service providers. Focus it narrowly on the named program rather than applying it without careful examination to a broad span of federal funding for social services.  

The Department of Labor on December 3, 2014, released the final regulations to implement President Obama's July 21, 2014, Executive Order banning sexual orientation and gender identity discrimination by federal contractors, subcontractors, and vendors. The regulations simply add those two new protected classes to the existing nondiscrimination rules for federal contracting and thus do not clarify the questions faith-based organizations have.

 

The Executive Order maintained the religious staffing freedom for federal contractors; a religious organization that considers religion when staffing is eligible to be a federal contractor, subcontractor, or vendor (this exemption was added to the federal rules by President George W. Bush in 2002). But the President refused to include a religious organization exemption from the new nondiscrimination requirements. So religious organizations that participate in federal contracting may consider religion when staffing but may not discriminate on the bases of sexual orientation or gender identity.

 

What happens when those different categories intersect? Faith-based organizations that consider religion when staffing are seeking staff who are compatible with and exemplify the religious values of the organization: generosity, compassion, justice, and so on, and also the religion's ethic for flourishing families and relationships. Often that means that the organization has an employee conduct code that restricts sexual activity -- by all employees, gay or straight -- to man-woman marriage. In making employment decisions consistent with that conduct code, the faith-based organization is just staffing by religion, which is legal under the federal contracting rules, but a job applicant in a same-sex marriage may assert that, instead, the organization is illegally discriminating on the basis of sexual orientation.

 

The Executive Order did not clarify what happens at this intersection, and neither do the final regulations just released. Many faith-based organizations may consider themselves no longer so welcome in federal contracting, or will fear intrusive (and disruptive and expensive) inquiries by federal officials into their human resources policies and practices, even if in the end they are vindicated. 

 

The Department of Labor's FAQ document on the regulations does stress the continuing validity of the religious staffing freedom and it notes that special rights come into play if an employee is a "ministerial" employee. But no clarification is offered about how religious staffing fits with the new sexual orientation nondiscrimination requirement.

 

There will be explanatory webinars, starting almost immediately, and other opportunities for questions and comments to the Department of Labor, during the 120 days before the new nondiscrimination requirements become effective and are applied to new contracts and existing contracts that are otherwise modified. (That 120-day period starts when the final regulations are published, soon, in the Federal Register.)

Regulators, courts, and the public are rapidly losing their understanding of and respect for some of the core countercultural practices of religious organizations, some of the distinctive ways they operate internally and some of the distinctive ways they serve the public. Governments at all levels are enacting more and more nondiscrimination requirements that conflict with these key countercultural practices while also becoming more reluctant to provide exemptions to the requirements. 

 

One sign of this trend: When the Employment Nondiscrimination Act, designed to stop job discrimination on the bases of sexual orientation and gender identity, was adopted by the Senate a year ago (and then stalled in the House), it entirely exempted religious organizations from its new rules and prohibited governments from excluding those religious organizations from federal funding programs because of their exemption. In sharp contrast, when President Obama issued his Executive Order in July to forbid the same kinds of job discrimination by federal contractors, he pointedly did not exempt religious organizations from the new prohibitions, making it unclear whether such organizations will be excluded from this type of federal funding if they hold their employees to a conservative sexual conduct standard. 

 

And that refusal to fully respect the distinctive, faith-shaped, employment practices of many religious organizations is President Obama's stance even though he has maintained the main principles of the faith-based initiative, an initiative designed to ensure that faith-based providers are not excluded from partnerships with the federal government. 

 

The Obama administration straddles two trends, two commitments: on the one hand, a deep and growing commitment to advancing LGBT rights whenever and wherever possible; on the other hand, an understanding of the important role played in civil society by faith-based organizations, coupled with a desire not to harm the ability of these organizations to play that role.  But the latter commitment is no proof against the former, witness not only the President's LGBT Executive Order without a religious organization exemption but also his administration's fierce and even dysfunctional clinging to its three-category treatment of religious organizations in the case of the contraceptives mandate (roughly: churches are exempt, religious nonprofits get attenuated respect for their convictions, and companies of religious conviction will get only minimal religious freedom protections, and that only because of the US Supreme Court's insistence).

 

The United States has entered a time of sorting. Which faith-based organizations will prove to be so committed to their religious principles and countercultural practices that they will advocate for the freedom they themselves and all such organizations need? And which faith-based organizations, while preferring to stick with their historic religious character, will prove to be unwilling or unable to withstand the public opprobrium of being clearly religious and different, won't adopt the internal overt religious practices needed to claim religious freedom protections, and will then gradually succumb to secularizing public pressures and government rules? 

 

This is the time for faith-based organizations to lift up the faith flag: to make sure that their internal policies are transparently based on religious convictions and that their practices are consistent with the stated convictions; to make it clear to the public -- winsomely-- that the organization is faith-based, faith-shaped. The point is not to retreat to a religious ghetto but rather to continue to serve the public in a faith-shaped way.

 

Now is the time to lift up the faith flag: to speak up, to rally around organizations that are being pilloried, for organizations to bolster their faith identity. When many wave the faith flag, it will be clear to the public and to public officials that what is at stake in the battle for institutional religious freedom is a large swathe of our civil society, a large proportion of the organizations that foster the common good. 

 

In its June, 2013, Windsor decision, the US Supreme Court struck down the federal definition of marriage as one man/one woman and said that the federal government must accept, instead, the varied definitions of marriage used by the states, including same-sex marriage. One consequence is the requirement, being applied gradually across federal programs, that recipients of federal funds to provide services interpret "marriage," "spouse," "dependent," etc., to include legally married same-sex spouses. That is, in these federally funded programs, those terms may not be defined according to that now illegal federal definition of marriage but instead must follow the varied definitions used by the states. Even when the private organization receiving the federal funds is located in a state that bans same-sex marriage, the organization is required to accept every legal same-sex marriage along with opposite-sex marriages.

 

The policy does not apply to the private organization itself -- recipients of the federal dollars are not required all of a sudden, e.g., to offer spousal benefits to same-sex spouses (but a state law or court decision may require that).  Rather, as the organizations operate the federally funded program, whenever the terms "marriage," "spouse," etc., appear, those terms have to be interpreted to include same-sex marriages. Thus, if to be eligible for the program the income of both the applicant and his or her "spouse" has to be below a certain limit, now the income of both same-sex and opposite-sex spouses must be totaled. And so on. The federal government is applying the policy going forward, when grants are renewed or new grant programs are created, rather than requiring the organizations to change their procedures mid-grant.

 

The change is being rolled out slowly, not just because grant programs are on different renewal cycles, but because of two other kinds of complexity. One is federalism. In many cases, the federal funds are given to states to fund services provided by the states themselves, or for the states to award the funds to private organizations to provide the services. A (dwindling) number of states have a law or constitutional provision not recognizing SSM. The federal government acknowledges that it cannot simply require such state governments to treat same-sex and opposite-sex marriages the same, even through federal dollars are involved. So far it is "encouraging" states to adopt a marriage-equality position in these federally funded programs; it seems that federal lawyers are busy deciding whether they can go beyond such encouragement. 

 

The other complexity is the involvement of faith-based organizations in many federally funded programs, delivering a wide range of services to persons, families, and communities. A requirement to serve everyone who is eligible for help; that's not only not a problem for most of these organizations but for their own commitment. Yet the problem of a clash of standards or views of how best to serve is likely in some federal programs -- in particular, in those dealing specifically with marriage and family. The federal government funds a range of programs designed to strengthen marriages. Will all organizations that participate in such programs in the future be required to accept the view that all legal marriages are exactly the same, or will the government cultivate a variety of providers to accommodate the diverse convictions of the public and to respect the religious freedom of faith-based groups committed to one man/one woman marriage?

 

Abstinence education programs sometimes touch on marriage. To be eligible to offer such programs, will organizations have to swear they will teach what Justice Kennedy believes about marriage rather than what their own holy scriptures teach? Will the marriage equality view be required of all organizations involved in adoptions and foster-care services, if federal dollars are involved? What will be the service requirement in residential programs -- emergency shelter for families, housing for married students? 

 

IRFA and other advocates for the religious freedom of faith-based service organizations have raised such issues with the Obama administration, and fortunately the administration has decided that these questions require specific attention from officials involved in the programs and from the Department of Justice. That's no guarantee that the final policy will be acceptable to all faith-based organizations, but it is an important start. 

On November 19, 2014, President Obama signed into law S. 1086, the Child Care and Development Block Grant Act (CCDBG) -- the reauthorization of a quarter-century old federal program that provides funds to states so that they can subsidize the child care needed by low-income families. The program was designed from the start to encourage participation by faith-based child care providers -- the kind of centers and home-based settings that many parents desire. 

 

The CCDBG program was first adopted in 1990, long before any federal faith-based initiative was created to ensure a level playing field in federal grant programs. But because so many parents already were choosing faith-based child care, the program was designed to enable religious providers to participate without giving up their faith character -- the quality that attracted the parents in the first place. How so? By requiring states, when funding child care, to mostly use vouchers (also called certificates) rather than grants or contracts. The vouchers go to the parents, who then decide whether they want a secular or a religious child care provider.  Because the choice of provider is made by the parents and not by the government, the faith-based providers can accept the federal funding without having to abandon their faith-based practices, teachings, and environment. 

 

This well-designed and well-functioning system was cast into doubt as Congress was considering reauthorization because HHS, the federal department that supervises CCDBG, proposed new regulations. Those proposed regulations would call on states to increase the quality of services and increase the provision of some special services (e.g., hours extending into the evening or later) by allocating more of their federal funds to grants or contracts than to vouchers. Officials would do more of the choosing, and faith-based providers would be less able to participate. Faced with such an idea, congressional supporters of the child care system inserted into the reauthorization bill specific instructions not to go down this path. Here's the language they put into the bill before sending it to the President: 

 

(b) Parental Rights to Use Child Care Certificates. -- Nothing in this subchapter shall be construed in a manner --

(2) to disfavor or discourage the use of such certificates for the purchase of child care services, including those services provided by private or non-profit entities, such as faith- based providers.

 

That language is now part of the law, confirming the original design of the program, ensuring that faith-based providers will continue to be fully welcome in the program, and ensuring that parents who prefer to entrust their children to such providers will continue to have that choice. 

The federal government counts on many services essential to Americans to be provided by private charity. So, in addition to often funding private providers via grants and contracts, it offers federal taxpayers various incentives to donate their private funds to a wide variety of secular and faith-based service providers. One very big incentive is the federal deduction for charitable contributions. Federal taxpayers who give a significant amount of money away can reduce the amount of money they owe to the IRS.

 

Or, as revenue-hungry members of Congress and federal officials see the process: those taxpayers rob the Treasury of all that money, even if the result is increased donations to private charity. When federal finances are so out of balance, even many who strongly support the important role of private charities can be motivated to target tax incentives for charitable giving.

 

It is unlikely any significant changes to these incentives will be made during the short duration of this lame-duck Congress, and there is no strong indication that the next Congress will find the consensus needed to undertake a major reform of the tax system, including charitable tax incentives. But sentiment is building to limit the many "tax breaks" that are written into our federal tax law, and too often members of Congress lump together in that category very different things: (1) tax deductions that help people finance some luxury for themselves with (2) the charitable tax deduction, which taxpayers can only get by giving money away for the good of others! 

 

To monitor the fate of charitable tax incentives, check the updates provided by the Alliance for Charitable Reform. 

 

Faith-based organizations, which in general are more dependent than secular groups on charitable contributions by persons and families, should consider joining the Faith & Giving Coalition. Contact Rhett Butler (rbutler AT agrm.org), government relations liaison for the Association of Gospel Rescue Missions.

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