Charitable Choice: Legal and Constitutional Issues

Congressional research reportJan 27, 2006

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Order Code RL32195

CRS Report for Congress

Received through the CRS Web

Charitable Choice:

Legal and Constitutional Issues

Updated January 27, 2006

Angie A. Welborn

Legislative Attorney

American Law Division

Congressional Research Service ˜ The Library of Congress

Charitable Choice: Legal and Constitutional Issues

Summary

Soon after taking office in 2001, President Bush put forward a charitable choice

agenda intended to expand the ability of faith-based organizations to provide

federally funded social services without impairing their religious character or the

religious freedom of beneficiaries. However, prior to 2001, Congress began enacting

charitable choice rules for various federally funded social programs, including,

Temporary Assistance for Needy Families (TANF), the Community Service Block

Grant (CSBG), and substance abuse prevention and treatment programs. When

Congress did not enact legislation to apply the concepts behind charitable choice to

more programs, the Bush Administration issued an Executive Order directing a wide

range of social programs to follow the rubric of charitable choice. Despite the focus

on charitable choice during the Bush Administration, perhaps the broadest example

of charitable choice rules are those established by the 1996 welfare reform law (P.L.

104-193).

Since its inception, charitable choice has been persistently controversial; and

President Bush’s faith-based initiative made that controversy highly visible. Much

of the legal controversy has centered on the constitutionality of the federal

government directly subsidizing faith-based social services programs and on whether

subsidized religious organizations ought to be able to discriminate on religious

grounds in their employment practices.

This report provides analysis of a number of factual, civil rights, and

constitutional questions that have been raised regarding charitable choice in general.

The analysis is generally focused on those provisions enacted as part of the 1996

welfare reform law. More recent charitable choice rules may give rise to the same

or similar concerns. Primarily, this report focuses on civil rights concerns that have

arisen in the context of charitable choice and First Amendment issues, as well as

recent legal developments related to charitable choice. It will be updated as events

warrant.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Civil Rights Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Nondiscrimination in federally assisted programs . . . . . . . . . . . . . . . . . 3

Nondiscrimination in employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Preemption of state and local civil rights laws . . . . . . . . . . . . . . . . . . . 8

Modification of Executive Order 11246 . . . . . . . . . . . . . . . . . . . . . . . . 8

First Amendment Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Direct aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Indirect aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Constitutionality of charitable choice . . . . . . . . . . . . . . . . . . . . . . . . . 16

Recent Legal Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Charitable Choice: Legal and Constitutional

Issues

Introduction

Soon after taking office in 2001, President Bush put forward a charitable choice

agenda intended to expand the ability of faith-based organizations to provide

federally funded social services without impairing their religious character or the

religious freedom of beneficiaries. However, prior to 2001, Congress began enacting

charitable choice rules for various federally funded social service programs, including

Temporary Assistance for Needy Families (TANF), the Community Service Block

Grant (CSBG), and substance abuse prevention and treatment programs.1 When

Congress did not enact legislation to apply the concepts behind charitable choice to

more programs, the Administration issued an Executive Order directing a wide range

of social programs to follow the rubric of charitable choice.2

Despite the focus on charitable choice during the Bush Administration, perhaps

the broadest example of charitable choice rules are those established by the 1996

welfare reform law (P.L. 104-193).3 The provisions of the 1996 law are probably the

most far-ranging set of rules so far set out and have been a basic model for charitable

choice provisions since enacted, proposed, or established by regulation. In general,

the law’s major charitable choice provision bars government from discriminating

against an organization applying to provide publicly funded services on the basis of

its religious character, so long as the program is implemented in a manner consistent

with the Establishment Clause of the First Amendment to the U.S. Constitution.

Moreover, it stipulates the following rules with regard to faith-based organizations

applying for or receiving public funds and applicants for/recipients of services:

Religious organizations remain independent of government and

retain control over the definition, development, practice, and

expression of their religious belief.

Government may not require religious organizations to change their

form of internal governance or to remove religious art and other

symbols as a condition of participation.

For more information on the application of charitable choice rules to these and other

programs, see CRS Report RL32736, Charitable Choice Rules and Faith-Based

Organizations by Joe Richardson.

For more information on this Executive Order, see CRS Report RS21924, Charitable

Choice: Expansion by Executive Action, by Joe Richardson.

For more information, see CRS Report RS20712, Charitable Choice, Faith-Based

Initiatives, and TANF, by Vee Burke.

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Faith-based organizations may discriminate on religious grounds in

their employment practices, regardless of their receipt of public

funds.

Like other grantees/contractors, religious organizations’ use of

public funds is subject to audit — except that, when federal funds

are segregated, only those moneys are subject to audit.

Any party seeking to enforce its rights under charitable choice

provisions of law can assert a civil court action for relief against the

entity/agency allegedly committing a violation.

No funds provided directly (as opposed to indirectly through

vouchers) may be spent for sectarian worship, instruction, or

proselytization.

Federal charitable choice rules are not to be construed as preempting

any provision of a state’s constitution or laws regarding aid to or

through religious organizations.

Faith-based organizations may not discriminate against beneficiaries

or potential beneficiaries on the basis of religion or religious belief.

Government must provide accessible alternative providers where

individuals have an objection to the religious character of the

organization/institution from which they receive or would receive

services.

Since its inception, charitable choice has been persistently controversial; and

President Bush’s faith-based initiative made that controversy highly visible. Much

of the legal controversy has centered on the constitutionality of the federal

government directly subsidizing faith-based social services programs and on whether

subsidized religious organizations ought to be able to discriminate on religious

grounds in their employment practices.

This report provides analysis of a number of factual, civil rights, and

constitutional questions that have been raised regarding charitable choice in general.

The analysis is generally focused on those provisions enacted as part of the 1996

welfare reform law. More recent charitable choice regulations issued under the

executive order discussed below may give rise to the same or similar concerns.

Primarily, this report focuses on the civil rights concerns that have arisen in the

context of charitable choice and First Amendment issues, as well as recent legal

developments related to charitable choice. It will be updated as events warrant.

Civil Rights Concerns

Several civil rights concerns have been raised in the debates on charitable

choice. The primary one has been whether the religious exemption in Title VII of the

Civil Rights Act of 1964, which allows religious organizations to discriminate on

religious grounds in their employment practices, should apply to religious

organizations that receive public funds under the rubric of charitable choice.

President Bush’s December 12, 2002, executive order (E.O. 13279) raised a related

issue by exempting religious organizations that contract to provide goods and

services to the federal government or that participate in federally financed

construction contracts from the religious nondiscrimination in employment

provisions of Executive Order 11246. There has also been some concern over the

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protections from discrimination afforded beneficiaries by charitable choice, and on

whether charitable choice should preempt state and local civil rights laws that go

beyond federal nondiscrimination requirements and bar employment discrimination

on such bases as sexual orientation and marital status.

These issues arise in the context of a complex panoply of civil rights mandates

and exemptions that already exist. The following subsections explicate charitable

choice with respect to (1) existing mandates barring discrimination in programs and

activities that receive federal financial assistance, (2) existing regulatory mandates

barring discrimination in employment practices, particularly Title VII of the Civil

Rights Act of 1964; and (3) the preemption of state and local nondiscrimination laws

that go beyond federal law. A final subsection discusses the employment

nondiscrimination requirements of Executive Order 11246 and the President’s

exemption of religious organizations from the religious nondiscrimination

requirement of that Order.

Nondiscrimination in federally assisted programs. Federal law

imposes a number of civil rights obligations on the provision of services in programs

and activities that receive federal financial assistance:

Title VI of the Civil Rights Act of 1964 bars discrimination on the

bases of race, color, or national origin.4

Title IX of the Education Amendments of 1972 bars discrimination

on the basis of sex and on the basis of blindness (in admissions) in

education programs.5

Section 504 of the Rehabilitation Act of 1973 bars discrimination on

the basis of handicap.6

The Age Discrimination Act of 1975 bars discrimination on the

basis of age.7

All of these prohibitions on discrimination apply generally and are triggered by the

receipt of federal funds, but most of them apply only to the delivery of services and

not to the employment practices of the entities that receive federal funds. The

applicability of these statutes to federally financed programs and activities is not

altered by charitable choice.

In contrast, there is no comparable federal statute that generally bars religious

discrimination in federally funded programs and activities. Individual programs

sometimes contain such a prohibition,8 but there is no general statutory prohibition.

42 U.S.C.A. 2000d et seq.

20 U.S.C.A. 1681 et seq.

29 U.S.C.A. 794.

42 U.S.C.A. 6101 et seq.

See, e.g., the nondiscrimination prohibition attached to the Head Start program at 42

U.S.C.A. 9849(a).

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Nonetheless, charitable choice has, since its inception as part of the welfare

reform measure in 1996, included provisions that bar religious organizations from

discriminating against beneficiaries on religious grounds and that require government

to make an alternate provider available to any beneficiary who objects to the religious

character of a given provider.

All of the existing charitable choice statutes, with the exception of the

Community Service Block Grants (CSBG) (P.L. 105-285), bar a religious

organization that receives assistance from discriminating against beneficiaries on the

basis of “religion” or “a religious belief.” Three of the four statutes also bar such

discrimination on the basis of a “refusal to actively participate in a religious

practice.” But one of the substance abuse statutes does not include this latter

prohibition.9

Nondiscrimination in employment. Federal statutes impose a number of

employment nondiscrimination requirements on public and private employers, and

generally these are not dependent on whether or not the entity receives federal

financial assistance, i.e., they are regulatory requirements that apply regardless of

whether an entity receives federal assistance. With the exception of Title IX, none

of the nondiscrimination statutes described in the previous subsection applies to the

employment practices of entities that receive federal funds (unless a primary

objective of the federally funded program is to provide employment). But most

public and private employers that employ more than a specified number of employees

are barred by the Americans with Disabilities Act from discriminating in their

employment practices on the basis of disability,10 by the Age Discrimination in

Employment Act on the basis of age,11 and by Title VII of the Civil Rights Act of

1964 on the bases of race, color, national origin, sex, and religion.12

A number of these statutes contain special provisions with respect to the

employment practices of religious institutions. Religious educational institutions are

exempt from the sex nondiscrimination requirement of Title IX, for instance, if “the

application of this subsection would not be consistent with the religious tenets of

such organization.”13 The Americans with Disabilities Act, while barring religious

organizations from discriminating on the basis of disability in employment,

specifically provides that they may still give preference in their employment practices

on the basis of religion and may require their employees to conform to their religious

tenets.14 Most important, Title VII specifically exempts religious employers from its

ban on religious discrimination in employment.

See P.L. 106-554.

42 U.S.C.A. 12201 et seq.

29 U.S.C.A. 621 et seq.

42 U.S.C.A. 2000e et seq.

20 U.S.C.A. 1681(a)(3).

42 U.S.C.A. 12113(c).

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Title VII and the religious exemption. It is the Title VII exemption that

has generated the most extensive debate in the discussion of charitable choice,

because all of the charitable choice statutes and proposals so far have explicitly

provided that the Title VII exemption “shall not be affected by the religious

organization’s provision of assistance under, or receipt of funds from, a program

described in ....”

Title VII bars most public and private employers with 15 or more employees

from discriminating in their employment practices on the bases of race, color,

national origin, sex, and religion. This threshold requirement of 15 employees

means that many churches, synagogues, and other congregational entities, as well as

small religious social services providers, are not large enough to be covered by any

of the nondiscrimination mandates of Title VII. But Section 702 of Title VII

specifically exempts those religious employers that are large enough to be covered

from its prohibition on religious discrimination, as follows:

This title shall not apply ... to a religious corporation, association, educational

institution, or society with respect to the employment of individuals of a

particular religion to perform work connected with the carrying on by such

corporation, association, educational institution, or society of its activities.15

Thus, religious organizations otherwise covered by Title VII may use religion as a

criterion in their hiring, firing, promotion, and other employment practices; and they

may do so not only with respect to employees engaged in religious activities but also

those engaged in purely secular activities. This exemption has been unanimously

upheld as constitutional by the Supreme Court with respect to the nonprofit activities

of religious organizations16 and has been applied to allow a wide variety of religious

entities to discriminate on religious grounds in a wide variety of circumstances.17

42 U.S.C.A. 2000e-1. Title VII also contains two other exemptions, now largely

redundant, allowing religious employers to discriminate on religious grounds. The first

allows educational institutions that are religiously controlled or that are “directed toward the

propagation of a particular religion” to discriminate on religious grounds in their

employment practices. The second allows all employers, not just religious organizations,

to use religion, sex, or national origin as a criterion in their employment practices if religion,

sex, or national origin “is a bona fide occupational qualification reasonably necessary to the

normal operation of that particular business or enterprise.” See 42 U.S.C.A. 2000e-2(e).

Corporation of the Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v.

Amos, 483 U.S. 327 (1987). The Court offered no comment with respect to the

constitutionality of the exemption as it might be applied to any profit-making activities of

religious organizations.

See, e.g., Corporation of the Presiding Bishop v. Amos, supra (church fired a building

engineer employed in a church-owned gymnasium open to the public because he failed to

qualify for a “temple recommend”); Little v. Wuerl, 929 F.2d 944 (3d Cir. 1991) (Catholic

school fired a teacher who had remarried without first seeking an annulment of her first

marriage in accord with Catholic doctrine); Porth v. Roman Catholic Diocese of Kalamazoo,

209 Mich.App. 630, 532 N.W.2d 195 (Mich. App. 1995) (Catholic school refused to renew

the contract of a Protestant teacher after it had decided to hire only Catholics as faculty

members); Walker v. First Orthodox Presbyterian Church, 22 FEP Cases 761 (Cal. 1980)

(continued...)

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As noted, Title VII is a regulatory statute. Nothing in its language generally or

in the religious exemption provision (§ 702) suggests that either is limited to

situations in which an employer does not receive public funds. The case in which the

Supreme Court upheld § 702 as constitutional did not involve any public funding,18

but several lower federal courts have held the exemption to be applicable to religious

organizations receiving public funds.19 Nonetheless, apparently to eliminate any

possible misunderstanding, all four charitable choice statutes have stated explicitly

that the religious exemption in Title VII is not lost simply because a religious

employer receives public funds. That, in turn, has generated vigorous opposition

from those who believe government should not subsidize such discrimination.

Religious organizations that meet the minimum size requirement of Title VII

(i.e. the organization has 15 or more employees) are not exempt from the other

employment nondiscrimination requirements of Title VII regarding race, color,

national origin, and sex; and charitable choice does not alter, or propose to alter, the

applicability of these requirements. Thus, religious organizations have in a number

of instances been held liable under Title VII for discrimination on the bases of race,

sex, or national origin.20 It can sometimes be a close question, however, whether the

(...continued)

(church fired its organist on the grounds his homosexuality conflicted with the church’s

beliefs); Boyd v. Harding Academy of Memphis, Inc., 88 F.3d 410 (6th Cir. 1996) (Christian

school fired an unmarried female teacher after she became pregnant because of its beliefs

opposing extramarital sex); Maguire v. Marquette University, 814 F.2d 1213 (7th Cir. 1987)

(Catholic university refused to hire a female professor because her views on abortion were

not in accord with Catholic doctrine); EEOC v. Presbyterian Ministries, Inc., 788 F.Supp.

1154 (W.D. Wash. 1992) (a Christian retirement home fired a Muslim receptionist because

she insisted on wearing a head covering as required by her faith); Piatti v. Jewish

Community Centers of Greater Boston, Mass. LEXIS 733 (1993) (a Jewish community

center refused to hire a Catholic as a youth director); Feldstein v. Christian Science Monitor,

555 F.Supp. 974 (D. Mass. 1983) (a newspaper owned by the Christian Scientist Church

refused to hire applicants of other faiths); and Hall v. Baptist Memorial Health Care

Corporation, 215 F.3d 618 (6th Cir. 2000) (a Baptist health care corporation fired an

employee because she had assumed a leadership role in a church that welcomed and

supported gay and lesbian individuals).

Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints,

supra, n. 86.

See, e.g., Hall v. Baptist Memorial Health Care Corporation, supra, n. 10 (student

assistance); Siegel v. Truett-McConnell College, supra, n. 11 (student assistance); Young

v. Shawnee Mission Medical Center, Civ. No. 88-2321-S (D. Kan., decided Oct. 21, 1988)

(Medicare payments); Dodge v. Salvation Army, 1989 U.S.Dist.LEXIS 4797, 48 Empl. Prac.

Dec. (CCH) P38,619 (S.D. Miss. 1989) (unspecified public funding of a Victims Assistance

Coordinator position).

See, e.g., EEOC v. Pacific Press Publishing House, 676 F.2d 1272 (9th Cir. 1982)

(publishing house had fired a female employee after she complained that she had been

denied monetary allowances paid to similarly situation male employees); EEOC v. Lutheran

Family Services in the Carolinas, 884 F.Supp. 1033 (E.D. N.C. 1994) (a religious social

services provider had refused to give a pregnant employee a leave of absence but gave

extended leaves of absence to male employees for a variety of reasons); and EEOC v.

(continued...)

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alleged discrimination by a religious employer is based on religion or one of the

prohibited bases of discrimination.21

Ministerial exception. It should be noted that the Title VII exemption

overlaps to some degree with a constitutionally-based employment discrimination

exemption for religious organizations that has been labeled the “ministerial

exception.” This exception exempts religious organizations from all statutory

prohibitions on discrimination with respect to the employment of ministers and other

ecclesiastical personnel. The free exercise of religion clause of the First Amendment,

it has been held, bars the government from interfering in any way with the

relationship between a religious institution and its ministers. The ministerial

exception has been held to apply to the employment of ministers (including youth

ministers, probationary ministers, and ministers of music), seminary faculty, and

hospital chaplains.22 It has been held not to apply, however, with respect to the

employment by religious organizations of persons who are not engaged in a religious

ministry or in the training of persons for such ministries, such as the administrative

and support staff in religious institutions.23 Because the ministerial exemption is

constitutionally based, it is not modified by charitable choice in any way.

(...continued)

Southwestern Baptist Theological Seminary, 651 F.2d 277 (5th Cir. 1981), cert. den., 456

U.S. 905 (1982) (seminary held to be subject to filing information reports on its employment

practices with respect to staff in its non-academic departments).

In several cases the courts have refused to grant summary judgment in favor of Christian

schools that had each fired an unmarried female teacher who had become pregnant, saying

that if the dismissals were due to the teachers’ adultery the Title VII religious exemption

would apply but that dismissal for pregnancy alone would constitute forbidden sex

discrimination. See Vigars v. Valley Christian Center of Dublin, Cal., 805 F.Supp. 802

(N.D. Cal. 1992); Ganzy v. Allen Christian School, 995 F.Supp. 340 (E.D. N.Y. 1998); and

Cline v. Catholic Diocese of Toledo, 199 F.3d 853 (6th Cir. 1999).

See McClure v. Salvation Army, 460 F.2d 553 (5th Cir.), cert. den., 409 U.S. 896 (1972)

(firing of a female officer in the Salvation Army after she claimed she was given a lower

salary and fewer benefits than male officers held to be within the scope of the ministerial

exemption); Bryce v. Episcopal Church in the Diocese of Colorado, 121 F.Supp.2d 1327

(firing of youth minister by her church after she participated in a commitment ceremony

with her partner held to be a constitutionally exempt act); Young v. Northern Illinois

Conference of the United Methodist Church, 21 F.3d 184 (7th Cir. 1994), cert. den., 513 U.S.

929 (1994) (conference of churches’ refusal to change the probationary status of an AfricanAmerican minister held to be constitutionally exempt);EEOC v. The Roman Catholic

Diocese of Raleigh, N.C., 213 F.3d 795 (4th Cir.), cert. den., 69 U.S.L.W. 3206 (2000)

(church fired its minister of music);EEOC v. Southwestern Baptist Theological Seminary,

supra (seminary’s criteria for its faculty held to be constitutionally exempt from monitoring

and examination by the EEOC); and Sharon v. St. Luke’s Presbyterian School of Theology,

713 N.E.2d 334 (Ind. Ct. App., 1st Dist., 1999) (firing of a chaplain by a religiously affiliated

hospital held to be constitutionally protected).

See, e.g., EEOC v. Southwestern Baptist Theological Seminary, supra (administrative and

support staff in a seminary) and EEOC v. Pacific Press Publishing Association, 676 F.2d

1272 (9th Cir. 1982) (editorial support staff in a religious publishing house).

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Preemption of state and local civil rights laws. Another issue that has

raised concerns is the preemptive effect of charitable choice on state and local civil

rights laws that bar forms of discrimination that are not barred by federal law, such

as discrimination based on sexual orientation or marital status. All of the charitable

choice statutes that have been enacted to date provide that a religious organization

that is a program participant “shall retain its independence from Federal, State, and

local government, including such organization’s control over the definition,

development, practice, and expression of its religious beliefs.” Similarly, all of the

charitable choice statutes to date have barred government from requiring that a

religious provider “alter its form of internal governance” and, as noted above, have

explicitly provided that a religious organization’s exemption under Title VII “shall

not be affected by its participation in, or receipt of funds from, a designated

program.” But with the exception of a provision added to the charitable choice

statute concerning substance abuse programs,24 little attention has been paid to

whether these provisions might have a preemptive effect on state and local civil

rights laws.

Under the supremacy clause of the Constitution,25 it seems clear that Congress

has the power to preempt state and local laws pursuant to charitable choice. What

has been the subject of debate has been the desirability of doing so in this case. It

might be noted, however, that Executive Order 13279 issued by President Bush on

December 12, 2002 (discussed infra), directs federal departments and agencies to

implement a similar policy regarding the independence of religious entities from state

and local laws in their social services programs.

Modification of Executive Order 11246. Executive Order 11246, in effect

since 1965,26 requires that all federal procurement contracts (Part II) and federally

assisted construction contracts (Part III) include clauses barring contractors and

subcontractors from discriminating in their employment practices on the bases of

race, color, religion, sex,27 or national origin and requiring them to take affirmative

action to promote equal employment opportunity. Section 202 of the Order provides

in part as follows:

During the performance of this contract, the contractor agrees as follows: (1) The

contractor will not discriminate against any employee or applicant for

employment because of race, color, religion, sex, or national origin. The

P.L. 106-554,which added charitable choice provisions to Title V of the Public Health

Service Act, prefaced the Title VII exemption language with the following sentence:

“Nothing in this section shall be construed to modify or affect the provisions of any other

Federal or State law or regulation that relates to discrimination in employment.”

U.S. Constitution, Art. VI, cl. 2: “This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof ... shall be the supreme Law of the Land.”

30 Fed. Reg. 12319 (Sept. 25, 1965). As amended, it can be found in the U.S. Code

following 42 U.S.C.A. 2000e.

E.O. 11246 did not initially include “sex” among the prohibited grounds of discrimination.

That was added two years later by E.O. 11376 (32 Fed. Reg. 14303 (Oct. 13, 1967)). A

subsequent amendment also consolidated enforcement functions in the Department of Labor.

See E.O. 12086, 43 Fed. Reg. 46501 (Oct. 10, 1978).

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contractor will take affirmative action to ensure that applicants are employed,

and that employees are treated during employment, without regard to their race,

color, religion, sex, or national origin ....

Section 301, in turn, requires that the same provisions be included in all federally

assisted construction contracts.

On December 12, 2002, President Bush issued Executive Order 13279.28 That

Order, inter alia, amends E.O. 11246 with respect to the prohibition on religious

discrimination as it applies to religious organizations. The amendment adds the

following language to E.O. 11246:

Section 202 of this Order shall not apply to a Government contractor or

subcontractor that is a religious corporation, association, educational institution,

or society, with respect to the employment of individuals of a particular religion

to perform work connected with the carrying on by such corporation, association,

educational institution, or society of its activities. Such contractors and

subcontractors are not exempted or excused from complying with the other

requirements contained in this Order.29

E.O. 13279 states that the amendment is “to further the strong Federal interest in

ensuring that the cost and progress of Federal procurement contracts are not

adversely affected by an artificial restriction of the labor pool caused by an

unwarranted exclusion of faith-based organizations from such contracts.”30

The amendment tracks word-for-word the exemption afforded religious entities

from the religious nondiscrimination requirement of Title VII of the Civil Rights Act

of 1964.31 Thus, like the Title VII exemption, the exemption it affords covered

religious entities is broad: It applies to all of the activities of the organizations

regardless of whether an employee’s functions are secular or religious. But the

amendment does not affect the obligation of covered religious entities to comply with

the other requirements of the executive order regarding employment

nondiscrimination on the bases of race, color, sex, and national origin; nor does it

affect the obligation of covered nonreligious entities with respect to religious

discrimination.

To the extent the amendment modifies Part II of E.O. 11246, it seems doubtful

that it has substantial significance for religious organizations. Part II in itself is not

applicable to the federal grant and cooperative agreement programs subsidizing the

provision of social services that have been the primary focus of debate about

charitable choice and religious discrimination by faith-based organizations. Part II

concerns federal procurement contracts, i.e., contracts for the provision of goods and

services directly to the federal government. Such contracts can range from food

services to office supplies to bombers and can, obviously, involve substantial sums

67 Fed. Reg. 77141 (Dec. 16, 2002).

Id. at 77143.

Id.

42 U.S.C. 2000e-1.

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of money. But it is not at all clear that religious organizations have historically

played a significant role in such federal procurement contracts.

However, the amendment also appears to apply to Part III of E.O. 11246, i.e.,

to federally assisted construction contracts. Part III defines “construction contract”

to mean a contract “for the construction, rehabilitation, alteration, conversion,

extension, or repair of buildings, highways, or other improvements to real property”;

and its coverage includes construction contracts that are incident to carrying out a

federal “grant, contract, loan, insurance, or guarantee” program. Thus, Part III

reaches beyond the federal procurement contracts addressed by Part II and applies to

the construction aspects of federal grant programs such as, for example, those of the

Department of Housing and Urban Development. Because religious organizations

have historically been extensively involved in federally assisted housing and

community development programs, and because other federally assisted social

services programs in which faith-based organizations participate may incidentally

involve construction or renovation activities, the amendment to this part of E.O.

11246 likely has greater significance for such organizations.

First Amendment Issues

As noted above, the charitable choice statutes contain a number of provisions

that seem intended to ensure their constitutionality. All of these measures require

that they be implemented “consistent with the Establishment Clause of the United

States Constitution.” All require that public funds that are disbursed directly to

religious organizations not be used for purposes of religious worship, instruction, or

proselytization. All have provisions to protect those who receive services from

religious organizations from religious discrimination. All require equal treatment,

but not preferential treatment, for religious organizations seeking to participate in

government social services programs.

On the other hand, all of the statutes also allow religious organizations that

receive public funds to discriminate on religious grounds with respect to their

employees, to display religious symbols on the premises where services are provided,

and to practice and express their religious beliefs independent of any government

restrictions. None of them, moreover, require the publicly funded program to be

separately incorporated from its sponsoring religious organization. In addition, the

measures allow religious organizations that receive public funds indirectly, i.e., by

means of vouchers, to engage in religious worship, instruction, and proselytization

in the funded program and to impose religious requirements on beneficiaries after

they are once admitted to a program. Finally, all of the charitable choice initiatives

seem premised on the assumption that charitable choice may in some manner allow

religious organizations to employ their faiths in carrying out the publicly funded

programs, regardless of whether they are directly or indirectly funded.

As a consequence, questions have been raised about whether charitable choice

on its face or in its implementation is consistent with the establishment of religion

clause of the First Amendment. One aspect of this issue concerns whether it is

constitutional for public funds to go to organizations that discriminate on religious

grounds in their employment practices. More generally, the question is whether it is

constitutional for public funds to go to religious organizations that have the

CRS-11

characteristics detailed in the previous paragraph and that in some manner employ

their faiths in carrying out the funded programs.

These questions of constitutionality, in turn, have at least two dimensions. The

charitable choice statutes and proposals govern public aid that is given directly to

religious organizations by means of grants or cooperative agreements in the specified

programs and, at least in the case of Temporary Assistance for Needy Families

(TANF), public aid that is given indirectly in the form of vouchers that can be

redeemed with religious (as well as nonreligious) organizations. The constitutional

strictures that apply to these two forms of aid differ; and as a consequence, the form

in which the public aid is provided to religious organizations under charitable choice

has implications for the constitutionality of the aid.

These questions are further complicated by the fact that the Supreme Court’s

interpretation of the establishment clause has been shifting. Prior to its recent

decisions, the Court’s construction of the establishment clause made it difficult, if not

impossible, for religious organizations that are deemed pervasively sectarian to

receive aid directly from the government, even for avowedly secular purposes, and

have required that programs receiving direct public aid be essentially secular in

nature. But the Court’s recent decisions in Agostini v. Felton32 and Mitchell v.

Helms33 have relaxed the strictures on direct aid and eliminated the pervasively

sectarian barrier, although the Court still requires that direct aid to religious

institutions not be used for religious indoctrination. With respect to indirect

assistance, the Court’s past jurisprudence has been less restrictive; and its recent

decision in Zelman v. Simmons-Harris34 appears to legitimate an even broader array

of voucher programs.

The following subsections detail the constitutional frameworks that appear to

govern direct and indirect aid and apply them to charitable choice:

Direct aid. In general terms the establishment clause has been construed by

the Supreme Court to “absolutely prohibit government-financed or governmentsponsored indoctrination into the beliefs of a particular religious faith.”35

“[G]overnment inculcation of religious beliefs,” the Court has stated, “has the

impermissible effect of advancing religion.”36 To guard against that effect, public

assistance which flows directly to religious institutions in the form of grants or

cooperative agreements has been required by the Court to be limited to aid that is

“secular, neutral, and nonideological....”37 Government has been able to provide

direct support to secular programs and services sponsored or provided by religious

521 U.S. 203 (1997).

530 U.S. 793 (2000).

122 S.Ct. 2460 (2002).

Grand Rapids School District v. Ball, 473 U.S. 373, 385 (1973).

Agostini v. Felton, 521 U.S. 203, 223 (1997).

Committee for Public Education v. Nyquist, 413 U.S. 756, 780 (1973).

CRS-12

entities, but it has been barred from directly subsidizing such organizations’ religious

activities or proselytizing.38

The Court gradually distilled the constitutional requirements governing direct

aid into a tripartite test. That test, known as the Lemon test after the case in which

it was first given full expression, required public aid to meet all of the following

requirements:

First, the statute must have a secular legislative purpose; second, its principal or

primary effect must be one that neither advances nor inhibits religion ...; finally,

the statute must not foster “an excessive entanglement with religion.”39

The secular purpose prong has rarely posed a serious obstacle to the constitutionality

of a direct aid program, but the Court’s original formulations of the primary effect

and entanglement tests often proved fatal to programs providing direct aid to

pervasively religious institutions. The Court construed the primary effect test to

mean that direct public aid must be limited to secular use. Thus, a direct aid program

could founder on this aspect of the Lemon test in either of two ways. It could be held

unconstitutional if the aid was not limited to secular use either by its nature or by

statutory or regulatory constraint.40 It could also be held unconstitutional if it flowed

to institutions that the Court deemed to be pervasively sectarian, i.e., entities whose

religious and secular functions were so “inextricably intertwined” that their secular

functions could not be isolated for purposes of public aid.41

Moreover, even if an aid program was limited to secular use, it often foundered

on the excessive entanglement prong of the Lemon test. Particularly in the context

of direct aid to pervasively sectarian organizations, the Court held that government

had to closely monitor the use religious organizations made of the aid provided in

order to be sure that the limitation to secular use was observed. But the very act of

monitoring, the Court sometimes said, excessively intruded the government into the

affairs of the religious institution; and for that reason the aid program was

unconstitutional.42

Thus, under this application of the Lemon test, religious organizations were not

automatically disqualified from participating in public programs providing direct

assistance. But in order to meet the secular use requirement, such organizations had

either to divest themselves of their religious character and to become predominantly

secular in nature or, at the least, to be able to separate their secular functions and

Committee for Public Education v. Nyquist, supra; Lemon v. Kurtzman, 403 U.S. 602

(1971); Bowen v. Kendrick, 487 U.S. 589 (1988).

Lemon v. Kurtzman, 403 U.S. 602, 612-13 (1971).

See, e.g., Committee for Public Education v. Nyquist, supra; Meek v. Pittenger, 421 U.S.

349 (1975); Wolman v. Walter, 433 U.S. 229 (1977).

See, e.g., Wolman v. Walter, supra, and School District of the City of Grand Rapids v.

Ball, 473 U.S. 373 (1985).

Lemon v. Kurtzman, supra; Meek v. Pittenger, supra; Aguilar v. Felton, 473 U.S. 402

(1985).

CRS-13

activities from their religious functions and activities. To the extent they did so, it

was deemed constitutionally permissible for government to provide direct funding

to their secular functions. This former interpretation of the establishment clause also

generally meant that it was constitutionally impermissible for religious organizations

that are pervasively sectarian to participate in direct public aid programs.43

As a practical matter, these interpretations of the establishment clause had their

most severe effects on programs providing direct aid to sectarian elementary and

secondary schools, because the Court presumed that such schools are pervasively

sectarian. The Court presumed to the contrary with respect to sectarian colleges,

hospitals, and other social welfare organizations, although it held open the possibility

that some of these agencies might be pervasively sectarian.44

In its most recent decisions, however, the Court has reformulated the Lemon

test and abandoned the presumption that some religious institutions, such as sectarian

elementary and secondary schools, are so pervasively sectarian that they are

constitutionally ineligible to participate in direct public aid programs. The Court still

requires that direct public aid serve a secular purpose, not have a primary effect of

advancing or inhibiting religion, and not lead to excessive entanglement. But the

primary effect test now means that the aid itself must be secular in nature, must be

distributed on a religiously neutral basis, and must not be used for purposes of

religious indoctrination. Moreover, the Court has now made the excessive

entanglement test one aspect of the primary effect inquiry; and it no longer assumes

that such entanglement is the inevitable result of government oversight of its aid

program.

The Court did not lay down a hard and fast definition of what makes an organization

pervasively sectarian. But it looked at such factors as the proximity of the organization in

question to a sponsoring church; the presence of religious symbols and paintings on the

premises; formal church or denominational control over the organization; whether a

religious criterion is applied in the hiring of employees or in the selection of trustees or, in

the case of a school, to the admission of students; statements in the organization’s charter

or other publications that its purpose is the propagation and promotion of religious faith;

whether the organization engages in religious services or other religious activities; its

devotion, in the case of schools, to academic freedom; etc. See, e.g., Bradfield v. Roberts,

175 U.S. 291 (1899); Lemon v. Kurtzman, supra; Tilton v. Richardson, 403 U.S. 672

(1971); Committee for Public Education v. Nyquist, supra; Meek v. Pittenger, 421 U.S. 349

(1975); Roemer v. Maryland Board of Public Works, 426 U.S. 736 (1976); and Bowen v.

Kendrick, 487 U.S. 589 (1988). But the Court has also made clear that “it is not enough to

show that the recipient of a ... grant is affiliated with a religious institution or that it is

‘religiously inspired.’” Bowen v. Kendrick, supra, at 621. Indeed, none of these factors, by

itself, has been held sufficient to make an institution pervasively sectarian and therefore

ineligible for direct aid. Such a finding has always rested on a combination of factors. For

useful lower federal court discussions of the criteria bearing on whether an institution is

pervasively sectarian or not, see Minnesota Federation of Teachers v. Nelson, 740 F.Supp.

694 (D. Minn. 1990) and Columbia Union College v. Clark, 159 F.3d 151 (4th Cir. 1998),

cert. denied, 527 U.S. 1013 (1999), on remand sub nom Columbia Union College v. Oliver,

2000 U.S.Dist.LEXIS 13644 (D. Md. 2000), aff’d, 2001 U.S.App.LEXIS 14253 (4th Cir.

decided June 26, 2001).

See Bowen v. Kendrick, 487 U.S. 589 (1988).

CRS-14

In 1997, in Agostini v. Felton45 the Court for the first time overturned a prior

establishment clause decision and held it to be constitutional for public school

teachers to provide remedial and enrichment services on the premises of private

sectarian schools to children attending those schools who were eligible for such

services under Title I of the Elementary and Secondary Education Act.46 The earlier

decision of Aguilar v. Felton, supra, had found the delivery of such services on the

premises of sectarian elementary and secondary schools to be excessively entangling,

because the pervasively sectarian nature of the institutions required government to

engage in a very intrusive monitoring to be sure that the Title I employees did not

inculcate religion. But in Agostini the Court stated that subsequent decisions had

abandoned the presumption that “public employees will inculcate religion simply

because they happen to be in a sectarian environment.”47 As a consequence, it said,

it had also to “discard the assumption that pervasive monitoring of Title I teachers

is required.”48 The Court also stated that

the factors we use to assess whether an entanglement is “excessive” are similar

to the factors we use to examine “effect” .... Thus, it is simplest to recognize

why entanglement is significant and treat it ... as an aspect of the inquiry into a

statute’s effect.49

Most recently, the Court in Mitchell v. Helms50 upheld as constitutional an

ESEA program which subsidizes the acquisition and use of educational materials and

equipment by public and private schools. More particularly, the Court found the

provision of such items as computer hardware and software, library books, movie

projectors, television sets, tape recorders, VCRs, laboratory equipment, maps, and

cassette recordings to private sectarian elementary and secondary schools not to

violate the establishment clause. In the process the Court overturned parts of two

prior decisions which had held similar aid programs to be unconstitutional and which

had been premised on the view that direct aid to pervasively sectarian institutions is

constitutionally suspect.51 Although the Justices could not agree on a majority

opinion, the plurality opinion by Justice Thomas and the concurring opinion by

Justice O’Connor (joined by Justice Breyer) both appear to have eliminated pervasive

sectarianism as a constitutionally preclusive characteristic regarding direct aid and

modified the primary effect test accordingly. Agostini had hinted at this result but

Mitchell confirmed it. As summarized by Justice O’Connor, the primary effect test

now has three essential elements:

521 U.S. 203 (1997).

The Agostini decision overturned in its entirety the Court’s decision in Aguilar v. Felton,

473 U.S. 402 (1985) but also overturned parts of Meek v. Pittenger, supra, and City of

Grand Rapids v. Ball, 473 U.S. 373 (1985).

Agostini v. Felton, supra, at 234.

Id.

Id. at 232-33.

530 U.S. 793 (2000).

Overturned in part were Meek v. Pittenger, 421 U.S. 349 (1975) and Wolman v. Walter,

433 U.S. 229 (1977).

CRS-15

(1) whether the aid results in governmental indoctrination, (2) whether the aid

program defines its recipients by reference to religion, and (3) whether the aid

creates an excessive entanglement between government and religion.52

Thus, the Court now appears to construe the establishment clause to allow some

forms of direct aid to religious entities that formerly were deemed constitutionally

excluded because of their pervasively religious character. Under the reformulated

Lemon test, direct public aid must still serve a secular purpose and not create an

excessive entanglement. But the most critical elements appear to be that the aid is

distributed in a religiously neutral manner, i.e., that it does not define its recipients

on the basis of religion and provide an incentive for beneficiaries to undertake

religious indoctrination, and that it does not result in religious indoctrination which

is attributable to the government.

Indirect aid. Indirect aid in the form of tax benefits or vouchers, however, was

less constrained prior to the Court’s recent revisions of its establishment clause

jurisprudence; and the Court’s most recent decision in Zelman v. Simmons-Harris53

appears to loosen the constitutional bounds even more. Like its standards for direct

aid, the Court requires that indirect aid programs serve a secular purpose and be

distributed to their initial beneficiaries on a religiously neutral basis, i.e., that the

beneficiaries not be chosen or given preference on the basis of a religious criterion.

But the critical element seems to be whether the initial beneficiaries have a “true

private choice” in deciding whether to obtain subsidized services from secular or

religious providers.

In its earlier decisions the Court held indirect aid programs unconstitutional if

they had been designed in such a manner that the universe of choice available to the

beneficiaries was almost entirely religious.54 But if the initial beneficiaries had a

genuinely independent choice among secular and religious providers, the Court held

the programs constitutional and ruled that even pervasively sectarian entities were not

precluded from participating.55 Indeed, the Court made clear that indirect aid which

ultimately is channeled to religious institutions does not have to be restricted to

secular use but can be used for all of the institutions’ functions, including their

religious ones.56

The Court’s recent decision in Zelman v. Simmons-Harris, supra, further

loosened the constitutional constraints on indirect aid. That case involved a program

Mitchell v. Helms, supra, at 845 (opinion of O’Connor, J.).

122 S.Ct. 2460 (2002).

Committee for Public Education v. Nyquist, supra, and Sloan v. Lemon, supra.

Mueller v. Allen, 463 US. 388 (1983); Witters v. Washington Department of Social

Services, 474 U.S. 481 (1986); Zobrest v. Catalina Foothills School District, 509 U.S. 1

(1993); Zelman v. Simmons-Harris, supra.

For a more detailed examination of the constitutional standards governing indirect aid,

including the Court’s decision in Zelman v. Simmons-Harris, supra, and for summaries of

recent state and lower federal court decisions, see CRS Report RL30165, Education

Vouchers: Constitutional Issues and Cases.

CRS-16

of educational vouchers that low-income parents could use at private schools in the

city of Cleveland. Most of those schools were religious in nature. But the Court held

that in evaluating whether the parents had a true private choice in using the aid, all

of the educational options open to the parents needed to be considered and not just

the private school options. Thus, enrollment in public schools, magnet schools, and

community schools, as well as the possibility of receiving special tutoring assistance,

all needed to be considered as options along with the private religious and secular

school possibilities. In other words, the Court held that the universe of choice

available to the voucher recipients was not defined solely by the private providers

where the vouchers could be used but included a number of public school and nonvoucher educational options as well.

Constitutionality of charitable choice. Some aspects of the charitable

choice proposals that have been enacted likely satisfy the foregoing requirements.

That seems particularly to be the case with respect to social services aid that is

provided in the form of vouchers. The Court’s interpretations of the establishment

clause make clear that such aid can ultimately flow even to pervasively sectarian

institutions, so long as the initial recipients have a true private choice among service

providers. That means both that such aid can go to religious entities that

discriminate on religious grounds in their employment practices57 and that such

entities need not be barred from engaging in religious worship, instruction, and

proselytizing in programs receiving such support. Thus, there does not appear to be

a constitutional problem in the provisions of the charitable choice statutes that allow

such employment discrimination and that permit religious institutions receiving

social services aid indirectly to engage in religious worship, instruction, or

proselytizing in the subsidized program.

Nonetheless, there may still be a constitutional question raised about charitable

choice with respect to indirect aid. The critical issue for indirect aid continues to be

whether there is a genuinely independent decision-maker between the government

and the entity that ultimately receives the assistance or whether the government has

dictated that the aid ultimately goes to a religious entity. All of the charitable choice

measures, with the exception of CSBG, require that those who object to a particular

religious provider be given an alternative that is either secular or not religiously

objectionable. But they may not require that a voucher recipient have a choice of

A number of lower court decisions have held that religious colleges and hospitals do not

forfeit their Title VII exemption as a result of receiving public funds indirectly in the form

of student aid and Medicare payments. See, e.g., Young v. Shawnee Mission Medical

Center, 1988 U.S.Dist.LEXIS 12248 (D. Kan. 1988) (court held that the Title VII exemption

applied to a religiously affiliated hospital’s firing of a clerk-receptionist because she was not

a Seventh Day Adventist, notwithstanding the hospital’s acceptance of Medicare payments);

Siegel v. Truett-McConnell College, Inc., 13 F.Supp.2d 1335 (N.D. Ga. 1994) (Baptist

college’s firing of a teacher because he was not a Christian held to be protected by Title VII

notwithstanding college’s receipt of public funds from a federal student assistance program);

and Hall v. Baptist Memorial Health Care Corporation, 215 F.23d 618 (6th Cir. 2000)

(Baptist college’s firing of a student services specialist because she had become a lay

minister in a community church that welcomed gay and lesbian members held to be

protected by Title VII exemption notwithstanding the college’s receipt of public funds by

means of unspecified federal student assistance programs).

CRS-17

secular and religious providers initially. Whether this is sufficient to meet the

Court’s standards does not seem certain.

Whether direct aid to religious entities that discriminate on religious grounds

in their employment practices, as allowed by all of the charitable choice statutes, can

pass constitutional muster seems more complex but still likely. Prior to Mitchell the

Court’s decisions had often used such employment discrimination as an indicator that

an entity was pervasively sectarian and, hence, ineligible for direct assistance.58 But

it had never relied on that factor alone; other factors always entered into the

constitutional equation.59 Those rulings, consequently, seem to suggest that religious

discrimination in employment, by itself, might not have been enough to render a

direct aid program unconstitutional. Mitchell seems to strengthen that possibility, at

least for certain kinds of direct aid. In that case, as noted, the Court upheld as

constitutional a direct aid program providing educational supplies and equipment to

entities that the Court had previously found to be pervasively sectarian and had

previously held to be constitutionally barred from receiving such aid — sectarian

elementary and secondary schools. In so doing the Court shifted the constitutional

focus from the nature of the organization receiving the aid to whether the aid is

distributed in a religiously neutral manner and whether it is used for religious

indoctrination. As a consequence, whether the entity receiving the assistance

discriminates on religious grounds in its employment practices seems to have become

of little or no concern, at least for in-kind direct assistance.

The more critical question concerns the role of faith in carrying out social

services programs that are directly subsidized. The Court’s decisions make clear

that direct public aid cannot be used for religious indoctrination, and all of the

charitable choice measures seem to meet this requirement by explicitly prohibiting

direct aid from being used for religious worship, instruction, or proselytizing. But

the underlying assumption of charitable choice has been that religious organizations

ought to be able to retain their religious character and employ their religious faiths

See, e.g., Lemon v. Kurtzman, supra (fact that most of the teachers in the Catholic schools

were nuns and rest were largely lay Catholics found to support finding that schools were “an

integral part of the religious mission of the Catholic church”); Hunt v. McNair, 413 U.S. 734

(1973) (fact that religiously affiliated college had no religious qualifications for faculty

weighed in determining whether state could issue bonds to subsidize the construction of

academic buildings); Committee for Public Education v. Nyquist, 413 U.S. 756 (1973)

(imposition of religious restrictions on faculty appointments found to be one element in

rendering sectarian elementary and secondary schools constitutionally ineligible for state

maintenance and repair grants); and Roemer v. Maryland Board of Public Works, 426 U.S.

736 (1976) (finding that religiously affiliated colleges did not make hiring decisions “on a

religious basis” relied on in part in upholding direct public grants to colleges).

Indeed, in some decisions the Court has given that factor no weight at all. See, e.g.,

Bradfield v. Roberts, 175 U.S. 291 (1899) (upholding construction of wing at a hospital run

by an order of Catholic nuns on the condition the wing be used for the medical care of the

poor) and Tilton v. Richardson, 403 U.S. 672, 681 (1971) (in finding several religiously

affiliated colleges not to be so permeated by religion as to be ineligible for federal

construction grants for academic buildings, the Court placed primary emphasis on the fact

that the schools “were characterized by an atmosphere of academic freedom rather than

religious indoctrination”).

CRS-18

in carrying out the subsidized programs. That, it is said, is what makes their

programs distinctive and more effective. Thus, given this assumption and the various

possibilities for how particular subsidized programs might be implemented, it seems

likely that constitutional questions will inevitably arise in the implementation of

direct aid programs under charitable choice, notwithstanding its prohibitions on the

use of direct aid for religious worship, instruction, and proselytization.

In addition, it should be noted that Mitchell involved an in-kind aid program —

educational supplies and equipment. All of the Justices in Mitchell expressed doubt

that direct grants of money to religious entities could pass constitutional muster even

under the Court’s loosened standards for direct aid programs; and direct grants of

money are what seem contemplated in the programs to which charitable choice now

applies. Justice O’Connor, joined by Justice Breyer, stated in Mitchell both that

“[t]his Court has recognized special Establishment Clause dangers where the

government makes direct money payments to sectarian institutions” and that a direct

subsidy “would be impermissible under the Establishment Clause.”60 Justice Souter,

joined by Justices Stevens and Ginsburg, stated:

[W]e have long held government aid invalid when circumstances would allow

its diversion to religious education. The risk of diversion is obviously high when

aid in the form of government funds makes its way into the coffers of religious

organizations, and so from the start we have understood the Constitution to bar

outright money grants of aid to religion.61

Justice Thomas, joined by Chief Justice Rehnquist and Justices Scalia and Kennedy,

asserted that neutrality is the essential constitutional criterion governing public aid

programs that benefit religious entities. But he, nonetheless, observed that “we have

seen ‘special Establishment Clause dangers’ ... when money is given to religious

schools or entities directly rather than, as in Witters and Mueller, indirectly.”62 These

statements are all dicta and do not indicate with any certainty how the Court might

rule on a case involving a particular grant or cooperative agreement. But they do

indicate constitutional doubt about direct money grants.

In addition, it deserves notice that one federal district court, in a decision handed

down some years prior to Mitchell, held religious discrimination in employment by

a religious organization in a position specifically funded by a government grant to

be unconstitutional.63 Neither Agostini nor Mitchell addressed the constitutionality

Mitchell v. Helms, supra, at 843 (quoting Rosenberger v. Rector and Visitors of

University of Virginia, 515 U.S. 819, 842 (1995) and 841, respectively (O’Connor, J.,

concurring in the judgment).

Id. at 890 (Souter, J., dissenting).

Id. at 818-19, quoting Rosenberger, supra, at 842 (Thomas, J., plurality opinion)

(emphasis in original).

Dodge v. Salvation Army, 48 Empl.Prac.Dec. 38619, 1989 U.S.Dist.LEXIS 4797, 1989

WL 53857 (S.D. Miss. 1989) (establishment clause held to bar the Salvation Army from

firing a Wiccan from her position as Victims Assistance Coordinator in a Domestic

Violence Shelter, both of which were substantially funded by public grants, on the grounds

(continued...)

CRS-19

of direct monetary subsidies. On the other hand, it should also be noted that,

although not in direct conflict, a federal appellate court recently upheld a state

program providing general aid to colleges, including religiously affiliated ones, as

applied to a Seventh Day Adventist college, notwithstanding that the college “gave

an express preference in hiring ... to members of the Church.”64 Another recent case

that was thought to raise the question of the constitutionality of public funding of an

agency that discriminated on religious grounds in its employment practices turned out

not to do so. In Pedreira v. Kentucky Baptist Homes for Children, Inc.65 the federal

district court held that the firing of an employee because of her lesbian lifestyle by

an organization whose Christian values abhorred homosexuality did not involve

religious discrimination, because the organization’s policy did not require employees

to accept or practice its religious beliefs but only to conform to a behavioral

requirement.

As a final observation, it also deserves notice that formal neutrality as the

controlling constitutional principle did gain the adherence of four Justices in Mitchell

v. Helms, supra (Chief Justice Rehnquist and Justices Scalia, Kennedy, and Thomas).

This perspective contends that the critical constitutional elements governing direct

public aid to religious entities are whether the aid itself is secular and whether it has

been distributed in a religiously neutral fashion, i.e., without preference for religious

entities. From this perspective it makes no difference whether the institutional entity

eventually uses the aid for religious purposes or not. A slight shift in the membership

of the Court, thus, could foreshadow further changes in the Court’s jurisprudence in

this area.

Recent Legal Developments

In 2004, several decisions addressing some aspects of charitable choice

generally were handed down by the United States Supreme Court and other lower

federal courts. While none of these cases specifically addressed the constitutionality

of any of the federally funded programs currently subject to charitable choice rules,

the decisions may be an indication of how a federal court would address challenges

(...continued)

that public funding of such discrimination would have a primary effect of advancing religion

and would entangle the government in the religious purpose of the Salvation Army).

Columbia Union College v. Oliver, 254 F.3d 496 (4th Cir. 2001).

186 F.Supp.2d 757, 86 FEP Cases 417 (W.D. Ky. 2001).

CRS-20

to those programs if brought at a later date.66 Two of these cases are discussed

below.

In Locke v. Davey67, the United States Supreme Court overturned a decision by

the U.S. Court of Appeals for the Ninth Circuit that had held the free exercise clause

of the First Amendment to be violated by a statute and a constitutional provision in

the state of Washington that were applied to deny a college scholarship to an eligible

student simply because he planned to pursue a degree in theology at a religious

college.68 Article I, § 11, of the Washington Constitution provides in part that “[n]o

public money or property shall be appropriated for or applied to any religious

worship, exercise or instruction, or the support of any religious establishment.”

Reflecting that stricture, a state statute providing college scholarships for in-state,

low and moderate income college students included a provision stating that “[n]o aid

may be awarded to any student who is pursuing a degree in theology.”69 As a

consequence, the state denied a Promise Scholarship to a student enrolled in a

religious college who sought to pursue a double major in Pastoral Ministries and

Business Management and Administration.

The Supreme Court reversed the decision of the Ninth Circuit finding that

Washington state’s exclusion of the pursuit of a devotional theology degree from its

otherwise inclusive scholarship aid program did not violate the Free Exercise Clause

of the First Amendment.70 The Court rejected Davey’s argument that the program

was presumptively unconstitutional because it is not facially neutral with respect to

religion. Davey’s claim was based on the Court’s decision in Church of Lukumi

Babalu Aye, Inc. v. Hialeah where the Court determined that a city ordinance making

it a crime to engage in certain types of animal slaughter violated the Free Exercise

In mid-2004, the Freedom From Religion Foundation filed a challenge to the current

Administration’s faith-based and community initiative as a whole alleging that it violated

the Establishment Clause by using government resources to promote religion, favoring

religious organizations over secular, and religiously indoctrinating social service recipients.

copy

the

complaint

can

found

here

[http://www.ffrf.org/legal/faithbased_complaint.html]. The plaintiffs have reportedly

voluntarily dismissed eight of their original claims, and others have been dismissed due to

lack of standing. What remains are challenges to two particular grants awarded by the

Department of Health and Human Services. Motions for summary judgment were due at the

end of 2004, but there is no indication of whether the last two claims have been resolved.

The case is presumably pending in the United States District Court for the Western District

of Wisconsin.

540 U.S. 712 (2004). For more information see CRS Report RL30165, Education

Vouchers: Constitutional Issues and Cases.

299 F.3d 748 (9th Cir. 2002).

Wash. Rev. Code § 28B.10.814.

540 U.S. 720. The Court also rejected Davey’s argument that the Promise Scholarship

Program is an unconstitutional viewpoint restriction on speech, finding that the Program was

not a forum for speech. Id. at 721.

CRS-21

rights of those who practice the Santeria religion.71 The Court distinguished the

present case from Lukumi, and others in that line of cases, by noting that the state law

in question imposed no civil or criminal penalties on any type of religious service or

rite, nor did it require the student to choose between their religious beliefs and receipt

of a government benefit.72

The Court went on to note that the Promise Scholarship Program went “a long

way toward including religion in its benefits” by allowing students to attend

pervasively religious schools, so long as they are accredited, and allowing students

to take devotional theology courses.73 Without any evidence to suggest animus

towards religion, there existed no presumption of unconstitutionality.74 The Court

found that since the state’s interest in not funding the pursuit of devotional degrees

was substantial and the burden placed on Promise Scholars by the exclusion of such

programs was minor, the program survived constitutional scrutiny.75

The United States District Court for the District of Columbia, in American

Jewish Congress v. Corporation for National and Community Service, ruled that

AmeriCorps Education Award Program violated the Establishment Clause by

providing awards to teachers who serve in religious schools and by making grants to

the religious organizations that oversee such teachers.76 In making this

determination, the court found that Corporation used “highly discretionary criteria

to select among potentially qualifying grantees” and “that a number of programs

actually list among their requirements that AmeriCorps participants must be of a

particular faith.”77 Based upon these findings, the court stated that “it is clear that the

Corporation does not determine eligibility for government aid neutrally.”78

The Corporation had argued that although Americorps participants were placed

in religious schools, they were required to keep timesheets noting that amount of time

they spend on classroom activities and that religious activities were to be excluded

from the timesheets they submitted as a condition of their participation in the

program. Despite these efforts, the court found that the Corporation’s monitoring of

the participant’s time spent on religious and nonreligious activities was inadequate,

and that in the context of a religious classroom, it was “not possible to clearly

distinguish between the two roles the AmeriCorps participants are supposed to

play.”79 The court also found that funds received by the educational institutions for

508 U.S. 520 (1993).

540 U.S. at 720, citations omitted.

Id. at 724.

Id. at 725.

Id.

323 F. Supp.2d 44 (D. D.C. 2004).

323 F. Supp.2d at 60.

Id.

Id. at 63.

CRS-22

the AmeriCorp participants was not segregated to ensure that the money was spent

on only secular activities.80

On March 8, 2005, the United States Court of Appeals for the District of

Columbia Circuit reversed the decision of the district court.81 The Court of Appeals

noted that AmeriCorps participants and grantees were chosen without regard to

religion and that participants who elected to teach religion in addition to secular

subjects did so as a result of their own private interests.82 The court found that the

AmeriCorps program itself created no incentives for participants to teach religion and

that there were adequate measures in place to ensure that when a participant chose

to teach religion, there was no “imprimatur of government endorsement.”83 The

court’s decision was appealed, but the Supreme Court denied certiorari on January

9, 2006.84

Id. at 64.

399 F.3d 351 (DC Cir. 2005).

Id. at 10.

Id. at 11, citing Zelman at 655.

2006 U.S. LEXIS 221 (January 9, 2006).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.