This resource was originally published on the Sacred Sector blog.

Sacred Sector, an initiative of the Center for Public Justice, launched in 2017 with the goal of empowering faith-based nonprofits and their leaders to navigate the increasingly complex challenges of a pluralistic, twenty-first century society. This learning community empowers faith-based organizations (FBOs) to live out their missions holistically: in navigating public policy, in adapting organizational best practices and in public positioning (an approach we refer to as the “Three P’s”). The COVID-19 pandemic presents particular challenges and opportunities for faith-based nonprofits to incarnate the distinctive assets of their faith-based missions to address emerging, complex challenges.

In the current coronavirus health and economic crisis, the federal government has launched major programs to support not only businesses, but also nonprofits, including houses of worship and faith-based service organizations.The federal government has also launched other programs to provide various kinds of assistance to employees and the unemployed. Many faith-based nonprofits wonder about the wisdom and technical aspects of accepting government support. These are appropriate questions. We have developed guidance outlining considerations for faith-based nonprofits involved with accepting government assistance to continue to operate during the current crisis. For an overview, see Sacred Sector’s recent webinar and additional resources.

In addition to government assistance designed to support faith-based organizations through this crisis, federal, state, and local governments often look to faith-based organizations to become a partner-in-service: to accept government funds to provide some kind of service to people in the community, such as substance use treatment, vocational training, or connecting foster children with adoptive families. The Sacred Sector summary document that follows this introduction focuses on these financial partnerships between government and faith-based organizations — partnerships to deliver services that the government seeks to have delivered. Yet, even if your organization does not now and never will accept government funding to offer services to the community, it can be illuminating to know that the public policy principles for those partnerships are highly respectful of the religious identity and practices of faith-based nonprofit organizations. That provides assurance that if your faith-based nonprofit accepts government support to help you keep in operation during the current crisis, acceptance of that support will not require your organization change its fundamental, faith-based identity and missions.

The information may be useful to you, too, as a window into the often-complex world of laws and regulations, and as encouragement that all operations and decisions of a faith-based organization should reflect and strengthen its faith-based mission.

Objective: This resource outlines the major public policy issues to consider when faith-based organizations (FBOs) receive government funding to provide services. It also offers key principles for organizations that are considering competing for government funding. FBOs do not become an extension of government, required to act in the uniform secular fashion required of government, simply by receiving government support to provide services. On the contrary, government supports private organizations with a range of different views and practices.

Sacred Sector Resource: Public Policy Principles for Considering Faith-based and Government Partnerships to Provide Services

Sacred Sector has created six different “Toolboxes” to guide organizations and emerging leaders in the faith-based nonprofit sector through the common challenges that they face. Each toolbox is composed of three parts: Public Policy, Organizational Practice and Public Positioning.

This resource is an excerpt of the Sacred Sector Government Partnerships Toolbox – Public Policy, which is available to members of the Sacred Sector Community and Sacred Sector Fellowship. This resource outlines the major public policy issues involved when faith-based organizations (FBOs) receive government funding to provide services. It also offers key principles for organizations that are considering competing for government funding. FBOs do not become an extension of government, required to act in the uniform secular fashion required of government, simply by receiving government support to provide services. On the contrary, government supports private organizations with a range of different views and practices.

The Role of Government Partnerships

Estimates show that 20 to 35 percent of public-serving nonprofits are religious, with an even higher percentage of faith-based providers in some services. Many of these organizations are privately funded, while others have partnered with the government to provide services. Smaller, place-based organizations often have a greater awareness of community needs than the government, and working together toward common goals can be mutually beneficial. Yet some faith-based organizations (FBOs) are wary of accepting government funds. They may fear that accepting government money will require them to forfeit or suppress their religious identities. Other FBOs may find that they are drifting from their original mission as government funding programs change their goals and requirements. Some may wonder how to best work with the government in non-financial ways.

The Basic Framework

Typically, FBOs are eligible to compete for government grants and contracts on equal footing with secular organizations without abandoning their religious character. As a general rule, government creates partnerships with FBOs based on the effectiveness and quality of their services, without requiring these organizations to surrender their distinctive, religiously-based contributions to the public good. The equal eligibility of faith-based and secular organizations for federal funding dates back to the Clinton administration, and is often referred to as the Equal Treatment rules. These rules were applied widely to federal funding during the George W. Bush administration, were reaffirmed — with some changes — by the Obama administration, and remain in effect today under the Trump administration.

In order to safeguard the equal eligibility of FBOs, President Bush started the federal faith-based initiative to help FBOs navigate the requirements and restrictions of federal funding, and to ensure that federal agencies are complying with the Equal Treatment rules. This initiative was maintained by the Obama administration, and with modifications, continues in the Trump administration. A large proportion of state and local social services are funded by federal dollars; the federal level-playing field rules accompany the federal dollars even when it is a state or local agency that awards the money in the form of grants (or contracts or vouchers) to provide services. In addition, the Religious Freedom Restoration Act (RFRA) provides a way for FBOs that consider religion when hiring to challenge restrictive rules that are sometimes attached to federal funding (see more on RFRA below).

Despite these positive reforms, government money comes with many strings, or special conditions, some of which may affect the religious identity and practices of an FBO. However, FBOs should understand that avoiding government money is no guarantee of avoiding secularizing restrictions. Increasingly, secularizing restrictions are being applied as a condition of operating, even when no government money is involved. Some of the restrictions are attached to licensing or accreditation, whereas other restrictions are applied via public accommodations law, employment law or other general requirements.

The basic principles of the Equal Treatment rules can be summarized in these points:

• Equal eligibility. Government officials must not be biased either for or against religious organizations that apply for funding, but should select the most effective applicants.

• Religious identity. A religious organization cannot be excluded from funding simply because it offers, separately from the government-funded services, other services that include religious teaching and activities. It cannot be excluded for other religious characteristics such as religious terms in governing documents, religious leaders on the board of directors, having a religious mission, religion in the organization’s name, or religious icons on the walls.

• Religious hiring. A religious organization that receives federal funding retains its freedom to consider religion when hiring staff unless the specific funding program considers religious hiring a form of prohibited job discrimination. If an FBO that practices religious staffing encounters a ban on religious job discrimination in a particular funding program, it may appeal to RFRA to ask the federal government to allow it to participate without abandoning its religious hiring policy. Some federal agencies have a routine process to accept such requests unless they suspect falsehood; with other agencies, the FBO has to ask program officials to consider the RFRA request.

• No religious discrimination. No eligible person can be turned away because of their religion or lack of religion, and beneficiaries cannot be coerced into religious activities.

• Direct funding. When the government funding is “direct”, such as grants and contracts, then explicitly or inherently religious elements such as prayer, worship, religious training and holy writings have to be kept separate in location or time from the government-supported services. For example, a federally-funded job training program may not discuss biblical teachings about serving with excellence no matter what the circumstances, but participants can be invited to a job club, held at a separate time, that does include a religious conversation.

• Indirect funding. When the government funding is “indirect”, such as vouchers or certificates, then religious elements can be woven into the government-supported services. For example, a drug-treatment program might include discussion of a “Higher Power” or lead beneficiaries through particular spiritual exercises, including prayer and the reading of sacred texts. Note that, with indirect funding, beneficiaries are given an up-front choice between several programs, including at least one of which is non-religious.

• Referral. A beneficiary who objects to the religious identity of a provider has to be referred to another provider that is religiously acceptable (which may or may not be secular). The referring organization can ask for help from the government agency that runs the program. Referrals are not required when the federally funded services are offered overseas. President Trump has proposed modifying how these referrals operate.

• Notice of rights. The FBO must provide to beneficiaries written notice of their religious rights, except when the services are delivered overseas.

Conclusion

Some religious groups may choose to partner with the government and compete for government funds; others may decide that government funding would be unwise for them despite the protections of the federal faith-based initiative (and similar protections that usually exist in state law and often exist in local law). Leaders of FBOs need to be discerning and aim to make informed decisions when considering government grants or contracts.

If you are part of a faith-based organization and would like support beyond this resource, please contact Sacred Sector Director Chelsea Langston Bombino (Chelsea.Langston@CPJustice.org).

Chelsea Langston Bombino is the director of Sacred Sector, an initiative of the Center for Public Justice. Sacred Sector is a learning community for faith-based organizations and emerging leaders within the faith-based nonprofit sector to integrate and fully embody their sacred missions in every area of organizational life. Chelsea also serves as an adjunct professor for Pepperdine University and serves on the board of several nonprofit organizations, including First Amendment Voice and Young Leaders Institute.

Dr. Stanley Carlson-Thies is the founder and senior founder of the Institutional Religious Freedom Alliance, a division of the Center for Public Justice.