Will Congress protect the non-profit status of religious schools?

Will Congress protect the non-profit status of religious schools?

by Stanley Carlson-Thies

Will Congress act to ensure that religious schools do not lose their non-profit status if they maintain the belief in man-woman marriage? An effort to protect the schools is not quickly gaining congressional support. But they are not in imminent danger, either.

The issue was put on the table during the oral arguments in the Supreme Court’s same-sex marriage case, Obergefell v. Hodges. When Justice Alito asked Solicitor General Verilli about it, the administration’s top lawyer would only say, “It’s going to be an issue.” The precedent is the IRS revocation of the tax-exempt status of Bob Jones University in the 1970s because of the university’s racially discriminatory policies. The university claimed that the constitutional protection of religious freedom shielded its policies but the IRS said that it was required to revoke the tax exemption of nonprofits that violate fundamental public policy-in this case, the federal government’s clear opposition to “racial discrimination in education.” In a 1983 Supreme Court decision, the IRS’s stance was backed up.

In Obergefell, the Supreme Court did not decide that discrimination against same-sex married couples is akin to racism. Instead, it ruled that no state government can exclude same-sex couples from marriage. That decision does not say how private persons and organizations must treat same-sex marriages. Similarly, while the Constitution forbids government from restricting the free exercise of religion, that constitutional principle does not require, say, a secular university to hire religious professors, to teach that religion is true, or to promote worship by erecting a chapel.

However, the federal government, in response to Obergefell, might adopt laws and regulations prohibiting private organizations from discriminating against same-sex married couples. Those actions might eventually amount to what looks like a fundamental public policy. And then the IRS might consider itself justified in stripping tax exemption from religious schools, colleges, and universities that do not embrace marriage equality. And with the loss of the tax exempt status, the educational institutions would also lose the ability to accept tax-deductible charitable contributions.

Losing their federal non-profit status, and being excluded from receiving tax-deductible charitable donations, likely would devastate private education from pre-K through graduate school. These institutions are sometimes wholly excluded from government funding, and even if not excluded, they depend to a significant extent on donations. Losing donor income while also having newly to pay taxes-that would be a harsh blow to independent religious education.

So, what will Congress do? The preliminary news is not encouraging. A quiet effort behind the scenes in the Senate to gain bipartisan support for a protective amendment to the bill to reauthorize the Elementary and Secondary Education Act found some interest but ran out of time before the Senate debated and adopted the bill. In the meantime, when a reporter for the Weekly Standard asked several Democratic senators about protecting the religious schools, there was no great surge of support for their religious freedom.

Still, while concern is justified, panic certainly is not. The federal government is a long way from having taken the multiple initiatives that would amount to a new basic national policy supporting same-sex marriage over religious freedom, and while Congress may be reluctant affirmatively to support the religious schools, it is at least as reluctant to act against them.

No reason for complacency, though. States also offer tax exemptions to nonprofit organizations, and in at least one state-California-there have been efforts to strip the exemption from the Boy Scouts because of the (soon to be ended) Scout policy against openly gay Scoutmasters. That effort so far has not succeeded, and the Scouts are not a religious organization. Still, this is a troubling initiative.