Two Decades of Bipartisan Cooperation on Government Funding and Religion

Carl H. Esbeck & Stanley Carlson-Thies, Monday August 22, 2016

[This article appears, in slightly different form, as a post in Cornerstone blog of the Religious Freedom Institute.]

Ours is a time of polarization, partisanship, and decline in religion’s influence in public life, with heated debates about government’s relationship with religion. And yet, receiving little attention but no less significant than the divisiveness, is the 20-year bipartisan cooperation over federal aid to religious organizations that serve the poor and needy. The basic principles, termed “Charitable Choice,” were signed into law multiple times by President Bill Clinton, starting with the welfare reform act on August 22, 1996. Those same principles were endorsed by George W. Bush in an executive order and then promulgated in a series of “equal treatment” regulations stretching across all federal grants for charitable work. President Obama embraced the principles in an executive order of his own, which led, just this past April, to expanded equal-treatment regulations governing social service grants and cooperative agreements in nine departments, from HHS, HUD and Justice to USAID, Agriculture, Labor and Homeland Security.

For millennia religious institutions have provided alms for the poor and sick, organized schools, and responded to dislocated peoples and natural disasters. These initiatives express, to use Christian terms, the love of neighbor that flows from the love of God. What should a modern secular government, developing and expanding its own social services, health care, and educational initiatives, do about these faith-based efforts? As the federal government’s service role accelerated from the Great Society of the 1960s onward, the initial resort was to the Jeffersonian wall of separation: the Establishment Clause prohibits government funding of markedly religious organizations, no matter the good that they do.

Supreme Court decisions, however, beginning with Bowen v. Kendrick in 1988, broke down this strict separation of church and state, replacing it with the measure of neutrality. That is, government should not be biased against religious providers if they can do the job. Rather, award the funds to the best provider while insisting that the aid be confined to the program as designed, which is social services, health, or education, not anything explicitly religious. The breakthrough came in the Mitchell v. Helms case in 2000. In a decision where the justices divided 6 to 3, but with no majority opinion, the Court upheld a congressional program of direct aid for all K-12 schools, including pervasively religious schools. In the controlling opinion by Justice O’Connor, she noted that the funding was for education in the ordinary sense of what is taught in all accredited schools and thus the program was constitutional so long as checks were in place to prevent diversion of funds to anything explicitly religious.

Charitable Choice anticipated by five years this revised understanding of when and how government may resource faith-based service providers. The provision was added by Senator John Ashcroft, R-MO, to the Personal Responsibility and Work Opportunity Reconciliation Act—comprehensive welfare reform—signed into law by President Clinton exactly 20 years ago. Charitable Choice instructed regulators not to eliminate grant applicants simply because they were intensely religious in character, but rather to ask, “Can you do the job?” In turn, Charitable Choice guaranteed faith-based providers that they would not have to forfeit their religious nature to obtain the funding. That said, explicitly religious activities by faith-based charities would have to take place outside the government-funded program. The law also guaranteed that beneficiaries of the assistance would not have to be served by a religious provider. If they objected, they would be reassigned: the “choice” in Charitable Choice.

There was an assumption, still controversial but now buttressed by empirical studies, that faith-based charities were often more effective for many people: their workers were highly motivated, their storefronts were in the needy neighborhoods, and religion is a help for some with hardcore addictions and recidivism. The welfare reform law was the first of four social service bills containing Charitable Choice that were signed by President Clinton. During the 2000 presidential campaign, his Vice President, Al Gore, advocated for the extension of Charitable Choice to additional programs, even before George W. Bush did so. As governor of Texas, Bush aggressively implemented support for faith-based organizations as well as neighborhood groups unaffiliated with churches.

Within weeks of taking office on January 20, 2001, Bush created a White House Office of Faith-Based & Community Initiatives, with satellite centers in five major departments where the grants are actually awarded and administered. In December, 2002, Bush issued an executive order setting out principles, modeled on Charitable Choice, to ensure a level playing field in federal welfare grants. Those principles were implemented in the years 2003 and 2004 in the form of a series of equal-treatment regulations to govern federal social service spending, including when federal funds are channeled through state and local governments and then awarded to service providers. The White House Office, through the five centers, “audited” practices to ensure against bias for or against providers because of their religious character, supplied information and training to those new to federal grant applications, and helped federal agencies to connect more effectively with both secular and faith-based groups with neighborhood credibility, able to reach and help where conventional services had not. Concerning revenue-sharing with states, federal funds came with federal rules. That meant the often more restrictive state constitutional restraints first adopted in the late nineteenth century were not controlling. It was new wine in new wineskins, all with the aim of better helping the needy while being effective with limited resources.

Barack Obama, in his first presidential campaign, announced—to the surprise of many and dismay of some—that his administration would support, but refine, the faith-based initiative. An early step was to organize a new Advisory Council on Faith-Based and Neighborhood Partnerships, which brought together noted religious and secular leaders. A Council taskforce, which included members ranging from the Southern Baptist Convention and the U.S. Conference of Catholic Bishops to the Human Rights Campaign and Americans United for Separation of Church and State, specifically reexamined the constitutionality of the Charitable Choice rules—and recommended only minor changes. The recommendations became the basis for Obama’s November 2010 executive order.

The order’s process of review, after a long period of interdepartmental discussion to harmonize practices across departments and independent agencies, resulted in a set of final regulations published in the Federal Register on April 4, 2016. Added was greater detail on the rights of beneficiaries and increased transparency to assure everyone involved that awards were made on merit and not politics. This was a culmination of balance and reform extending to all federal grant funding the rights and duties originally applicable to just the four social-service programs first reached by Charitable Choice.

Throughout this two-decade process of perfecting how government can support religious providers, the Supreme Court’s distinction between “direct” and “indirect” funding was followed to meet no-establishment guidelines. In the case of direct funding it is the government who decides which private organization will receive the grant funding. Thus the funds cannot be expended on explicitly religious activities, such as chapel, prayer, or Bible classes. With indirect funding, such as vouchers or scholarships—or specially configured contracts—it is the beneficiary, such as the victim of domestic violence or the addict or the homeless, who chooses a provider and thereby determines which private entity receives government support. Because the funding choice is private, the faith-based organizations that are selected by the beneficiary are free to integrate religious elements into the supported services—and beneficiaries are empowered to select from a range of differently configured programs, religious and secular. The Access to Recovery program initiated during the Bush administration gave drug addicts a wide range of treatment choices, including religious rehabilitation centers. When, in April, 2003, the celebrity judge, Richard Posner of the U.S. Court of Appeals in Chicago, upheld a faith-shaped drug treatment program called Faith Works of Milwaukee that was indirectly funded (albeit by a specially configured contract), the imprimatur of constitutionality was stamped on the faith-based initiative.

Also throughout this two-decade process, and notwithstanding persistent complaints to the contrary, the Charitable Choice provisions and equal-treatment regulations maintained federal rules governing the employment practices of faith-based organizations. Those rules are set in Title VII of the Civil Rights Act of 1964, and have from the start included an exemption from nondiscrimination mandates so that religious providers may continue to staff with those of like-minded faith. This is a matter of survival, for religious charities cannot maintain their religious character if they cannot choose the religious character of their workers. Most federal grant programs say nothing about the hiring practices of grantees. And in the rare instances where there is a restriction on religious hiring, the provider can get relief under another two-decades-old law, the Religious Freedom Restoration Act, adopted almost unanimously by Congress and signed by President Bill Clinton in 1993.

In his December 2002 executive order, President Bush modified the employment rules for federal contractors, bring them into alignment with the rule in Title VII permitting religious employers, even when receiving grant funds, to staff on a religious basis. When President Obama, in July, 2014, added new prohibitions on job discrimination on the bases of sexual orientation and gender identity to the federal contracting rules, he expressly noted he was not removing Bush’s earlier-provided religious staffing exemption. Neither did Obama clarify how the new protected classes interact with the existing exemption. So, for example, if a religious organization regards following the religion’s teaching about marriage a test of authentic faith and declines to hire an applicant in a same-sex marriage, is that a legitimate exercise of its religious hiring freedom or a newly illegal act of discrimination based on sexual orientation?

When sexual orientation and gender identity, as newly protected classes, come up against religious hiring practices, there is disagreement, differing legal assessments, and “culture war” heat. But none of that can detract from a central—and surprising—reality: for 20 years now, diverse presidential administrations, Democratic, Republican, and then Democratic, have broadly and deeply agreed on the Charitable Choice framework for government funding of social services.

There is no claim, of course, that the faith-based initiative is the complete answer to how our society should serve those in need. But it has proven itself to be a principal part of the government’s response. The result has been a greater richness in social service providers, a diversity of private-sector institutions highly motivated by their confessions of faith but open to serving everyone in need regardless of the person’s faith or lack thereof. It’s so American: having choices, respect for religion and conscience. Why deny it in social services?

Carl H. Esbeck is professor of law emeritus at the University of Missouri. He assisted Senator Ashcroft in the design of Charitable Choice, and served in the U.S. Department of Justice in 2001-02, where he assisted with the faith-based initiative.

Stanley Carlson-Thies is founder and Senior Director of the Institutional Religious Freedom Alliance, a division of the Center for Public Justice. In 2001-02 he worked in the White House Office of Faith-Based and Community Initiatives, and later was an advisor to Obama’s Advisory Council on Faith-Based and Neighborhood Partnerships.