Are Faith-Based Rules Changing?

Government collaboration with faith-based organizations long predates any federal faith-based initiative. What has changed with the faith-based initiative is the determined effort by federal officials to ensure that the government’s funding rules are not biased against faith-based organizations that are interested in helping the government serve the needy. Some states have also reformed their own rules for social-service grants and contracts.

To eliminate ambiguities concerning the rights of faith-based organizations and to create a “level playing field”—equal opportunity for those organizations, including robustly religious groups—major reforms were made during the past two administrations. During the Clinton years Congress adopted “Charitable Choice” rules for several federal programs. The Bush administration then adopted Charitable Choice regulations to make sure that states would fully implement these rules. The Bush administration also adopted “Equal Treatment” regulations (very similar to the Charitable Choice rules) to apply to the other federal programs.

These “level playing field rules” follow the federal money, even when the money goes from Washington, DC, to a state, city, or county agency and it is officials of those agencies who make the actual awards of grants or contracts.

President Obama has left the existing rules in place. But as a candidate he was very critical of the Bush faith-based initiative. And many Democrats, who now have large majorities in both the House and the Senate, have criticized the Bush regulations and Charitable Choice as going too far, allegedly violating the separation of church and state.

Can the rules change mid-stream? Will the rules be changed, becoming more restrictive once again—favoring secular, or mildly religious, or interfaith organizations over those that are robustly faith-based? It is possible that government officials will continue to warmly praise the work of faith-based organizations and to invite expanded partnerships, while “adjusting” the rules to screen out groups thought to be “too religious.”

There is no way to know if, and how much, the federal rules might change. But keep these things in mind: The Charitable Choice rules were created by Congress and so far Congress has not decided to change them. The Bush administration’s Equal Treatment regulations can only be changed by a public process that involves public notice and public comment. The regulations were justified by a Bush Executive Order (Dec. 12, 2002), and executive orders can easily be changed by presidents. However, President Bush grounded his executive order in an interpretation of the Constitution and in U.S. Supreme Court decisions. Those arguments and court decisions cannot be simply wished away by succeeding presidents.

Note that once a government agency and a private organization have signed a grant agreement or a contract to provide social services, the government cannot unilaterally change the terms of the legal agreement, for example by imposing new secularizing rules.

Still, faith-based organizations that care deeply about their religious identity and their faith-shaped practices and services should pay close attention to the rules attached to government grants that may appear to be appropriate and attractive.

The rules have changed before and they can be changed again. Be watchful!

Current Rules


Equal eligibility

Government officials must not be biased either for or against religious or “very religious” applicants. ?

Religious identity

There are specific protections for a religious name and mission, religious leaders on the board, religious symbols on the walls. ?

Religious activities

Activities such as prayer, evangelism, and religious instruction can be offered on a voluntary basis to clients, but must be kept separate from grant-funded services. ?

501(c)(3) status

This IRS status is only required in some programs; when it is required, officials cannot demand that the nonprofit be secular. ?

Religious hiring

Taking account of religion when choosing staff is normally permitted, although it is forbidden in certain federal programs and in certain states and cities. ?

Religious Freedom Restoration Act

In federal programs that forbid religious hiring, a faith-based organization can request that the ban be lifted if the ban imposes a substantial religious burden on the organization’s religious practices. ?

Voucher funding

An increasing number of federal programs have switched from grants to voucher funding. With vouchers, religious activities and talk can be incorporated into the government-funded service, and clients get multiple choices. ?

The fine print. Check the details of government program announcements and grant and contract documents. Ask for clarification from the government official designated as the contact person for the program. Ask the Center for Faith-Based and Neighborhood Partnerships in the federal agency offering the grant, or the state faith-based office (many states have one) if the federal money is being awarded by a state agency. Consult a knowledgeable lawyer if you are unsure about the requirements and how they would apply to your faith-based organization.

The level playing field rules. The Charitable Choice rules became law for federally funded welfare services in 1996, for the Community Services Block Grant in 1998, and for federally funded substance-abuse treatment and prevention funding (SAMHSA) in 2000. Charitable Choice regulations were adopted in 2003.

President Bush issued an “Equal Protection” Executive Order in December, 2002, applying rules similar to Charitable Choice to the other federal programs that utilize private organizations to provide services. Equal Treatment regulations corresponding to these rules were adopted in 2004 for most federal programs not covered by Charitable Choice rules.

ResourcesStanley Carlson-Thies, “Faith-Based Initiative 2.0: The Bush Faith-Based and Community Initiative,” Harvard Journal of Law and Public Policy, vol. 32, no. 3 (Summer 2009), pp. 931-947.

Stanley Carlson-Thies, Charitable Choice for Welfare & Community Services: An Implementation Guide for State, Local, and Federal Officials (Center for Public Justice, 2000).