Order Code RL31043
CRS Report for Congress
Received through the CRS Web
Public Aid and Faith-Based Organizations
(Charitable Choice): Background and
Selected Legal Issues
Updated February 20, 2002
David M. Ackerman
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

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Public Aid and Faith-Based Organizations (Charitable
Choice): Background and Selected Legal Issues
Summary
On July 19, 2001, the House passed H.R. 7, the “Community Solutions Act of
2001.” The Act is the primary legislative vehicle for President Bush’s faith-based
initiative and contains tax incentives for charitable giving (Title I), the “Charitable
Choice Act of 2001" (Title II), a modified re-authorization of individual development
accounts for persons of limited income (Title III), and limitations on the liability of
corporations for charitable donations of equipment and supplies (Title IV). In the
Senate controversy over the civil rights and constitutional implications of the
charitable choice title of H.R. 7 led to the introduction recently of the “CARE Act of
2002” (S. 1924), a bipartisan bill that excludes most of those provisions.
Government has long provided public aid to social services programs operated
by faith-based organizations. But interpretations of the establishment of religion
clause of the First Amendment have generally required such programs to be secular
in nature. In recent years, however, a number of advocates have promoted the
concept that the Constitution and public policy should allow faith-based organizations
to receive public funds on the same basis as other entities that operate social services
programs without abandoning their religious character. That view has had
considerable effect. The Supreme Court has modified its establishment clause
jurisprudence to allow a broader (although as yet ill-defined) scope to public aid to
religious organizations; Congress has enacted four charitable choice measures into
law; and President Bush’s initiative “to rally America’s armies of compassion” remains
a centerpiece of his domestic agenda.
Nonetheless, questions abound about the constitutionality, efficacy, and public
policy implications of charitable choice; and H.R. 7's charitable choice provisions
differ significantly from those previously enacted. This report provides background
and analysis on some of the salient factual and legal issues about charitable choice in
a question-and-answer format. The questions addressed are as follows:
(1) What is charitable choice?
(2) Aren’t religious organizations already eligible to receive public funds?
(3) What initiatives has President Bush proposed to promote the involvement of religious
organizations in publicly funded social services programs?
(4) What charitable choice proposals have been enacted into law?
(5) Have any hearings been held on charitable choice?
(6) What legislative action has taken place on H.R. 7 and other charitable choice measures?
(7) What does the charitable choice title of H.R. 7 provide and how does it differ from
previous charitable choice statutes?
(8) What legal framework governs the civil rights concerns about charitable choice?
(9) Is charitable choice constitutional?
(10) Have any court suits involving charitable choice or similar programs been filed or
decided as yet?
The report concludes with an appendix giving a summary comparison of the
provisions of the four charitable choice statutes that have been enacted and of Title
II of H.R. 7, as approved by the House. This report will be updated as events warrant.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(1) What Is Charitable Choice? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Protecting the religious character of the organization . . . . . . . . . . 3
(b) Protecting the religious freedom of recipients . . . . . . . . . . . . . . . . 4
(c) Protecting the constitutionality of charitable choice . . . . . . . . . . . . 4
(2) Aren’t Religious Organizations Already Eligible to
Receive Public Funds? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(3) What Initiatives Has President Bush Proposed
to Promote the Involvement of Religious Organizations in
Publicly Funded Social Services Programs? . . . . . . . . . . . . . . . . . . . . 6
(4) What Charitable Choice Proposals Have Been Enacted into Law? . . . . 8
(5) Have any Hearings Been Held on Charitable Choice? . . . . . . . . . . . . . . 8
(6) What Legislative Action Has Occurred on H.R. 7 and
Other Charitable Choice Measures in the 107th Congress? . . . . . . . . . . 9
(a) H.R. 7, the “Community Solutions Act of 2001” . . . . . . . . . . . . . . 9
(b) S. 1924, the “CARE Act of 2002" . . . . . . . . . . . . . . . . . . . . . . . 13
(c) Other measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(7) What Does the House-Passed Version of Title II of H.R. 7 Provide and
How Does It Differ from Previous Charitable Choice Statutes? . . . . 15
(8) What Is the Legal Framework for the Civil Rights Concerns
That Have Been Raised About Charitable Choice? . . . . . . . . . . . . . . 17
(a) Nondiscrimination in federally assisted programs . . . . . . . . . . . . . 18
(b) Nondiscrimination in employment . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Preemption of state and local civil rights laws . . . . . . . . . . . . . . . 23
(9) Is Charitable Choice Constitutional? . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Direct aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Indirect aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Constitutionality of charitable choice . . . . . . . . . . . . . . . . . . . . . . 30
(10) Have any Court Suits Involving Charitable Choice or
Similar Programs Been Filed or Decided As Yet? . . . . . . . . . . . . . . . 34
List of Tables
Appendix: Comparison of Charitable Choice Statutes with Title II of H.R. 7,
as Adopted by the House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

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Public Aid and Faith-Based Organizations
(Charitable Choice): Background and
Selected Legal Issues
Introduction
On July 19, 2001, the House gave its approval to H.R. 7, the “Community
Solutions Act of 2001,” by a vote of 233-198. Until recently, the Act has been the
primary legislative vehicle for President’s Bush’s faith-based initiative and consists of
tax incentives for charitable giving (Title I), the “Charitable Choice Act of 2001”
(Title II), an extension and modification of the authorization for individual
development accounts for persons of limited means (Title III), and limitations on the
liability of corporations for donations of equipment and supplies to charitable
organizations (Title IV). Title II would extend modified charitable choice rules to
nine new program areas and is the most (although not the only) controversial part of
H.R. 7. In the Senate the bill has been referred to the Finance Committee.
In part because the controversy over charitable choice cast substantial doubt on
H.R. 7's prospects in the Senate, Senators Lieberman (D.-Ct.) and Santorum (R.-Pa.)
on February 8, 2002, introduced a bipartisan compromise bill that does not contain
most of the charitable choice provisions of the House bill (S. 1924). Worked out in
cooperation with the Administration and entitled the “Charity Aid, Recovery, and
Empowerment Act of 2002" (the CARE Act), S. 1924 includes tax incentives for
charitable giving and promotes the establishment of individual development accounts
by persons of limited means. It is similar to H.R. 7 in that it would bar government
from requiring non-governmental organizations involved in the delivery of social
services to remove religious art and symbols from their premises, to change their
names because they are religious, or to alter religious provisions in their charter
documents.1 But in lieu of the other charitable choice provisions of H.R. 7, S. 1924
provides for expedited consideration by the IRS of applications for tax exemption by
nonprofit social services providers and authorizes $150 million for a Compassion
Capital Fund to enable several federal departments and agencies to provide technical
and programmatic assistance to small providers. The CARE Act would also expand
federal funding of the Social Services Block Grant and establish a new program
providing federal support for maternity group homes. Like H.R. 7, S. 1924 has been
referred to the Senate Finance Committee.2
1Unlike H.R. 7, S. 1924 would also bar government from requiring providers to eliminate
religious qualifications for membership on their governing boards.
2Initially, the Senate counterpart to H.R. 7 was S. 592, the “Savings Opportunity and
Charitable Giving Act of 2001,” introduced on March 21, 2001, by Senators Santorum (R-
(continued...)

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CRS-2
Government has long provided public aid to social services programs operated
by faith-based organizations (FBOs). But as the result of interpretations of the
establishment of religion clause of the First Amendment3 and policy decisions by
administrators, such programs have generally been required to be secular in nature
and pervasively sectarian entities have been deemed ineligible to participate. In recent
years a number of advocates have promoted the concept that the Constitution and
public policy should allow faith-based organizations to receive public funds on the
same basis as other entities that operate social services programs without abandoning
their religious character. That effort has had considerable effect. The Supreme Court
has modified its establishment clause jurisprudence to allow a broader (although as
yet ill-defined) scope to public aid to religious organizations; Congress has enacted
four “charitable choice” measures into law; and President Bush has undertaken an
initiative “to rally America’s armies of compassion” as a centerpiece of his domestic
agenda.
Nonetheless, numerous questions have been raised about the constitutionality,
efficacy, and public policy implications of charitable choice. While the legislative fate
of the charitable choice provisions contained in H.R. 7 remains uncertain, similar
provisions have been enacted in four previous statutes. With particular attention to
H.R. 7 and S. 1924, this report provides background on, and analysis of, some of the
salient factual, civil rights, and constitutional issues generated by charitable choice in
a question and answer format, as follows:
(1) What is charitable choice?
(2) Aren’t religious organizations already eligible to receive public funds?
(3) What initiatives has President Bush proposed to promote the involvement of religious
organizations in publicly funded social services programs?
(4) What charitable choice proposals have been enacted into law?
(5) Have any hearings been held on charitable choice?
(6) What legislative action has taken place on H.R. 7 and other charitable choice
measures in the 107th Congress?
(7) What does the charitable choice title of H.R. 7 provide and how does it differ from
previous charitable choice statutes?
(8) What is the legal framework for the civil rights concerns that have been raised about
charitable choice?
(9) Is charitable choice constitutional?
(10) Have any court suits involving charitable choice or similar programs been filed or
decided as yet?
2(...continued)
Pa.) and Lieberman (D.-Conn.) and referred to the Finance Committee. That proposal does
not include any of the charitable choice provisions of H.R. 7 nor that bill’s corporate liability
reforms. It does contain comparable tax incentives for charitable giving and measures to
promote the establishment of individual development account provisions.
3The First Amendment provides in pertinent part that “Congress shall make no law respecting
an establishment of religion, or prohibiting the free exercise thereof ....” The protections of
both the establishment clause and the free exercise clause have been held applicable to the
states as well as part of the liberty protected from undue state interference by the due process
clause of the Fourteenth Amendment. See Everson v. Board of Education, 330 U.S. 1 (1947)
and Cantwell v. Connecticut, 310 U.S. 296 (1940).

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CRS-3
The report includes as well an appendix that compares the provisions of the four
charitable choice measures that have been enacted into law and Title II of H.R. 7 as
adopted by the House. This report will be updated as events warrant.4
(1) What Is Charitable Choice?
First added to the welfare reform measure adopted in 1996,5 charitable choice
is a set of provisions in law intended to ensure that religious organizations can apply
to participate in federally funded social services programs on the same basis as any
other nongovernmental provider and can provide services pursuant to such programs
without abandoning their religious character or infringing on the religious freedom of
recipients. The underlying assumptions of charitable choice seem to be that religious
organizations should be given greater access to public funding and should be allowed
to employ their faiths in carrying out the publicly funded programs to a greater degree
than has traditionally been the case.6 Except for a small technical assistance
authorization in H.R. 7, charitable choice does not contain new funding for faith-
based organizations; and it applies only to programs designated by Congress. The
four charitable choice measures that have been enacted, H.R. 7, and S. 1924 differ in
some of their details, and sometimes significantly so (see question 7 and Appendix).
But the major provisions of charitable choice include the following:
(a) Protecting the religious character of the organization. Charitable
choice bars government from discriminating against an organization that applies to
provide publicly funded social services on the basis of its religious character. To
protect such organizations’ religious character, charitable choice further provides that:
(i) religious organizations which receive public funds remain independent
of government and retain control over the definition, development, practice, and
expression of their religious belief;
(ii) government may not require such organizations to change their form of
internal governance or to remove religious art and other symbols as a condition
of participation; and
(iii) religious organizations which receive federal funds may discriminate on
religious grounds in their employment practices as allowed under Title VII of the
Civil Rights Act of 1964.7
4For more detailed information on the charitable choice provisions that have been proposed
or enacted into law prior to the 107th Congress and additional analysis of the constitutional
framework governing charitable choice, see CRS Report RL30388, Charitable Choice:
Constitutional Issues and Developments Through the 106th Congress, and CRS Report
RS20712, Charitable Choice and TANF.
5P.L. 104-193, Title I, § 104 (Aug. 22, 1996); 110 Stat. 2161; 42 U.S.C.A. 604a.
6The latter objective may raise constitutional questions about the initiative and may also have
been undermined to some extent by modifications that have been added to the charitable choice
title of H.R. 7. See the discussion under questions 8 and 9.
742 U.S.C.A. 2000e-1.

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CRS-4
Charitable choice states that a religious organization’s use of public funds is subject
to audit. But it allows – and often requires – the public funds to be segregated into
a separate account and limits the government audit to that account.

(b) Protecting the religious freedom of recipients. Charitable choice
specifies that a religious organization cannot discriminate against a beneficiary or
potential beneficiary on the basis of religion or religious belief (and in some versions
on the basis of a refusal to hold a religious belief and/or a refusal to actively
participate in a religious practice as well). Charitable choice also requires that an
alternate and accessible provider be made available to a recipient who objects to the
religious character of a given provider and that the government give all beneficiaries
notice of their right to an alternate provider. Title II of H.R. 7 adds to these
provisions a requirement that participation by beneficiaries in any religious activity
offered by a provider that receives direct governmental assistance be voluntary. But
it also provides that this requirement of voluntariness does not apply if a religious
organization receives funding indirectly, i.e., in the form of vouchers; and in such
programs it bars religious discrimination against beneficiaries only in admissions.
(c) Protecting the constitutionality of charitable choice. Charitable
choice bars a religious organization from using direct government aid for sectarian
worship, instruction, or proselytization (unless the aid is received in the form of
vouchers, in which case this restriction does not apply). Moreover, charitable choice
programs are explicitly required to be implemented in a manner “consistent with” the
establishment of religion clause of the First Amendment to the Constitution (and in
some versions with the free exercise clause as well). Title II of H.R. 7, although not
the charitable choice statutes previously enacted into law, also requires that any
religious activity offered by a religious organization be separate from the program that
receives direct federal assistance and that participation in any religious activity that
is directly funded be voluntary for the individuals receiving services. Charitable
choice also does not appear to bar government from requiring that religious programs
and entities receiving federal funds be incorporated separately from their sponsoring
religious organizations.
(2) Aren’t Religious Organizations Already Eligible to Receive
Public Funds?
Yes. Some federal programs, such as the Child Care and Development Block
Grant program,8 explicitly specify that religious organizations are eligible to
participate. More commonly, federal grant and cooperative agreement programs9
provide that private entities or nonprofit entities are eligible to participate, and these
categories include religious as well as secular organizations. Such entities as Catholic
842 U.S.C.A. 9858 et seq.
9“Cooperative agreement” is the legal phrase used to refer to funding agreements between the
federal government and social services providers that involve substantial interaction between
the government agency and the provider, while the term “grant” refers to funding agreements
that do not involve substantial interaction. The term “contract” is limited to agreements for
the provision of property or services to the government itself. See 31 U.S.C.A. 6303-6305.

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CRS-5
Charities USA, Lutheran Services in America, the Salvation Army, United Jewish
Communities, and numerous other religiously affiliated or religiously sponsored
organizations at the national, state, and local levels have long participated in publicly
funded social services programs. These organizations are commonly incorporated
separately from their sponsoring religious organizations and usually have tax-exempt
status under § 501(c)(3) of the federal tax code.10
But interpretations and applications of the establishment of religion clause of the
First Amendment as well as policy decisions by administrators have in the past
generally required programs operated by religious organizations that receive direct
public funding to be essentially secular in nature. Religious symbols and art have
often had to be removed from the premises; and religious worship, instruction, and
proselytizing have been forbidden. Moreover, religious entities that have been found
to be “pervasively sectarian,” i.e., entities in which religion is a pervasive element of
all that they do, have in the past generally been constitutionally ineligible to participate
in direct funding programs, because they have been deemed unable to separate their
secular functions from their religious functions and thus unable to meet the
constitutional requirement that direct aid be limited to secular use.
The courts have applied these constraints most strictly in the context of direct
aid programs benefiting sectarian elementary and secondary schools.11 But the same
standards have been held to apply with respect to direct aid to religiously affiliated
colleges and social services programs.12 Although recent decisions by the Supreme
10Section 501(c)(3) of Title 26 of the U.S. Code provides an exemption from federal income
taxes to the following:
Corporations, and any community chest, fund, or foundation, organized and
operated exclusively for religious, charitable, scientific, testing for public safety,
literary, or educational purposes ..., no part of the net earnings of which inures to
the benefit of an private shareholder or individual, no substantial part of the
activities of which is carrying on propaganda, or otherwise attempting, to influence
legislation ..., and which does not participate in, or intervene in (including the
publishing or distributing of statements), any political campaign on behalf of (or
in opposition to) any candidate for public office.
One of the primary benefits of tax-exempt status, and a major incentive for obtaining such
status, is that donations to such organizations may be claimed as a tax deduction by the
donors. See 26 U.S.C.A. 170.
11See, e.g., Lemon v. Kurtzman, 403 U.S. 602 (1971) (subsidy of teachers of secular subjects
in sectarian elementary and secondary schools held unconstitutional); Committee for Public
Education v. Nyquist, 413 U.S. 756 (1973) (grants for maintenance and repair of sectarian
school facilities and tuition subsidies for the parents of children attending private sectarian
elementary and secondary schools held unconstitutional); and Wolman v. Walter, 433 U.S.
229 (1977) (public subsidy of field trip transportation for children in sectarian elementary and
secondary schools held unconstitutional).
12See, e.g., Tilton v. Richardson, 403 U.S. 672 (1971) (public subsidy of the construction of
academic buildings at sectarian colleges held constitutional, subject to the restriction that the
buildings be limited to secular use) and Bowen v. Kendrick, 487 U.S. 589 (1988) (provisions
(continued...)

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CRS-6
Court seem to be loosening these constitutional constraints to some degree, charitable
choice is a legislative attempt to move beyond these restrictions and allow faith-based
organizations to participate in publicly funded social services programs while in some
manner still retaining their religious character. (See question # 9 for a fuller
discussion of the constitutional issues raised by charitable choice.)
(3) What Initiatives Has President Bush Proposed to Promote
the Involvement of Religious Organizations in Publicly Funded
Social Services Programs?
The promotion of faith-based and community organization initiatives has been
a centerpiece of President’s Bush’s domestic agenda. On January 29, 2001, President
Bush issued two executive orders establishing federal offices to define and promote
these initiatives. Executive Order 13199 created an Office of Faith-Based and
Community Initiatives in the White House to take the lead responsibility in enhancing
and promoting government’s partnership with faith-based and community
organizations.13 Executive Order 13198, in turn, established centers for faith-based
and community initiatives in each of five federal agencies – the Departments of Health
and Human Services, Housing and Urban Development, Labor, Justice, and
Education.14 These centers are mandated to work with the White House office in
order to make their agencies “as open and supportive as possible to successful faith-
based and grassroots organizations” and, more particularly, to identify and eliminate
regulatory, statutory, and administrative barriers to the participation of such groups.
On August 16, 2001, the White House issued the first of what it said will be annual
reports summarizing the initial findings of the departmental centers – Unlevel Playing
Field: Barriers to Participation by Faith-Based and Community Organizations in
Federal Social Service Programs.15
12(...continued)
in Adolescent Family Life Act allowing grants to be made to religious organizations held
constitutional so long as particular grants were not made to pervasively sectarian entities).
1366 Fed. Reg.8499 (Jan. 31, 2001). Initially, that office was headed by Catholic scholar John
J. DiIulio, Jr. But on August 17, 2001, the White House announced his resignation. On
February 2, 2002, President Bush announced the selection of James Towey, an attorney with
an extensive background in working with social services organizations, as the head of the
office and also designated him as a Deputy Assistant to the President.
14Id. at 8497.
15 The report summarizes the initial findings of the five departmental centers as including the
following:
(i) small faith-based and secular groups receive “very little” federal support
relative to the scope of the services they provide;
(ii) there is a “widespread bias” against such groups reflected in “cumbersome”
regulations and prohibitions on religious activities that go beyond constitutional
requirements;
(iii) regulations often impose requirements beyond what the legislation mandates;
(iv) the existing charitable choice statutes have been “almost entirely ignored” by
(continued...)

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CRS-7
These executive orders were part of a document released by President Bush on
January 30, 2001, entitled “Rallying the Armies of Compassion.” The document
detailed his agenda “to enlist, equip, enable, empower, and expand the heroic works
of faith-based and community groups across America” and set forth the following
initiatives:

(a) encouraging and helping states to create their own versions of the White
House Office of Faith-Based and Community Initiatives;
(b) a commitment to fully implement the charitable choice measures that
have been enacted into law;
(c) a recommendation that pilot programs incorporating charitable choice
be established to help the children and families of prisoners, to improve inmate
rehabilitation prior to release, to establish maternity group homes, and to provide
after-school programs for low-income children; and
(d) an expansion of incentives for private giving to religious and charitable
enterprises by such means as allowing a charitable gift tax deduction to those
who do not itemize on their federal income tax returns, permitting individuals to
take tax-free withdrawals from their IRAs for the purpose of making charitable
contributions, limiting the liability of corporations for the donation of equipment
and supplies to charitable organizations, encouraging the states to adopt a
charitable gift tax credit, increasing the charitable donation deduction for
corporations from 10 percent to 15 percent of taxable income, and creating a
Compassion Capital Fund from both federal and private funds to provide
technical assistance to small community and faith-based organizations and to
provide start-up capital to such enterprises.
In the House the Administration supported H.R. 7, the “Community Solutions
Act of 2001,” as the primary legislative vehicle for a number of these initiatives.16 In
the Senate President Bush has heralded the bipartisan compromise reflected in S. 1924
as “a great accomplishment” and urged its adoption, notwithstanding its deletion of
most of the charitable choice provisions in the House bill.17
15(...continued)
federal administrators;
(v) there is very little evaluation of the results that are achieved in federally funded
social services programs; and
(vi) the Government Performance and Results Act of 1993, which was enacted to
promote performance-based management, has had “little discernible impact.”
T h e r e p o r t i s a v a i l a b l e o n t h e W h i t e H o u s e w e b s i t e a t
[http://www.whitehouse.gov/news/releases/2001/08/unlevelfield.html]
16As noted above, S. 584 was originally the Senate counterpart to H.R. 7. Like S. 1924, that
measure also does not include the charitable choice title or the corporate liability reform
provisions of H.R. 7. It has now been superseded by H.R. 1924.
17White House Office of the Press Secretary, “Remarks by the President and Senator
Lieberman in Photo Opportunity After Meeting on Armies of Compassion” (Feb. 7, 2002).

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CRS-8
(4) What Charitable Choice Proposals Have Been Enacted into
Law?
Prior Congresses have enacted four charitable choice measures into law.
Charitable choice was first enacted in 1996 as part of the “Temporary Assistance for
Needy Families” program (TANF) and applies as well to the welfare-to-work grant
program added to TANF in 1997.18 The 105th Congress included selected charitable
choice provisions in its reauthorization of the “Community Services Block Grant
Program” in 1998.19 In 2000 the 106th Congress adopted two measures adding
charitable choice to the substance abuse treatment and prevention services provided
under both the block grant and discretionary grant provisions of Titles V and XIX of
the Public Health Services Act.20
The language in the 1996 welfare law has been the basic model for charitable
choice. That law authorizes the states, at their option, to administer and provide
TANF services or benefits through contracts with nongovernmental entities or
through the provision of certificates or vouchers to TANF beneficiaries redeemable
with private entities. The law said that if a state exercised this option, it had to allow
religious organizations to participate on the same basis as any other private entity,
subject to the requirements of charitable choice regarding the religious character of
such organizations, the religious freedom of beneficiaries, and the use of funds (see
question 1). Subsequent enactments and proposals have varied some of these
requirements, but the basic framework of the welfare reform enactment has been
retained.
(5) Have any Hearings Been Held on Charitable Choice?
Notwithstanding the enactment of four charitable choice measures in the 104th,
105th, and 106th Congresses, no congressional committee had held a hearing on
charitable choice prior to the first session of the 107th Congress. So far in this
Congress five hearings have been held, as follows:
(1) Two hearings have been held by the Subcommittee on the Constitution
of the House Judiciary Committee, chaired by Rep. Chabot (R.-Oh). The first, on
April 24, 2001, examined “State and Local Implementation of Existing Charitable
Choice Programs.” The second, on June 7, 2001, focused on “The Constitutional
18P.L. 104-193, Title I, § 104 (August 22,1996); 110 Stat. 2161; 42 U.S.C.A. 604a.
19P.L. 105-285, Title II, § 201 (Oct. 27, 1998); 112 Stat. 2749; 42 U.S.C.A. 9920.
20P.L. 106-310, Title XXXIII, § 3305 (Oct. 17, 2000); 114 Stat. 1212; 42 U.S.C.A. 300x-65
(West Supp. 2001) and P.L. 106-554, § 1 (Dec. 21, 2000); 114 Stat. 2763; 42 U.S.C.A.
290kk (West Supp. 2001). The charitable choice provisions in the latter act were part of H.R.
5662, the “Community Renewal Tax Relief Act of 2000,” which was incorporated and
enacted by reference in the “Consolidated Appropriations Act, 2001.” See 114 Stat. 2763I-1,
at 2763I-33.

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CRS-9
Role of Faith-Based Organizations in Competitions for Federal Social Service
Funds.”21

(2) On April 26, 2001, the Subcommittee on Criminal Justice, Drug Policy,
and Human Resources of the House Committee on Government Reform, chaired
by Rep. Souder (R.-Ind.) held a hearing on “The Role of Community & Faith-
Based Organizations in Providing Effective Social Services.”22
(3) On June 6, 2001, the Senate Committee on the Judiciary, chaired by Sen.
Leahy (D.-Vt.), held a hearing on “Faith-Based Solutions: What Are the Legal
Issues?”
(4) On June 14, 2001, two subcommittees of the House Ways and Means
Committee – the Subcommittee on Human Resources, chaired by Rep. Herger (R.-Ca.),
and the Subcommittee on Select Revenue Measures, chaired by Rep. McCrery (R.-La.)
– held a joint hearing on H.R. 7.23
(6) What Legislative Action Has Occurred on H.R. 7 and Other
Charitable Choice Measures in the 107th Congress?
(a) H.R. 7, the “Community Solutions Act of 2001”. H.R. 7, the
“Community Solutions Act of 2001,” was introduced with the support of the White
House on March 29, 2001, by Rep. Watts (R.-Ok.), Rep. Hall (D.-Oh.), and Speaker
Hastert (R.-Ill.).24 The tax provisions of Title I and the individual development
account provisions of Title III were referred to the Committee on Ways and Means,
while the corporate liability provisions of Title I and the charitable choice provisions
contained in Title II were referred to the Committee on the Judiciary. After an all-day
markup session on June 28, 2001,25 the Judiciary Committee approved, 20-5, a
substitute version of the corporate liability and charitable choice sections offered by
its chairman, Rep. Sensenbrenner (R.-Wis.), which had been developed in extensive
discussions with the Administration. The Democratic minority proposed numerous
modifications to the substitute, but most of these were rejected.26 The Ways and
21 State and Local Implementation of Existing Charitable Choice Programs: Hearing Before
the Subcommittee on the Constitution of the House Committee on the Judiciary, 107th Cong.,
1st Sess. (April 24, 2001) (Serial No. 13) and The Constitutional Role of Faith-Based
Organizations: Hearing Before the Subcommittee on the Constitution of the House
Committee on the Judiciary,107th Cong., 1st Sess. (June 7, 2001) (Serial No. 17).
22The hearing is not yet printed but is available at the subcommittee’s web site at
www.house.gov/reform/cj/hearings/01.05.23/index.html
23H.R. 7 -- The Community Solutions Act of 2001: Hearing Before the Subcommittee on
Human Resources and the Subcommittee on Select Revenue Measures of the House
Committee on Ways and Means, 107th Cong., 1st Sess. (June 14, 2001) (Serial 107-34).
24An identical bill, H.R. 1284, was introduced by the same sponsors on March 28, 2001.
25The transcript of the Committee’s markup is reproduced in the committee’s report on H.R.
7, infra, n. 24.
26See H. Rept. 107-138, Part I, 107th Cong., 1st Sess. (July 12, 2001). As noted, the report
(continued...)

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Means Committee, in turn, marked up the tax and individual development account
provisions on July 11, 2001, and approved a version substantially reducing the amount
of the tax incentives by a vote of 23-16.27 On July 19, 2001, the House debated
another substitute proposal proferred by Rep. Sensenbrenner, rejected two minority
proposals, and adopted the substitute, 233-198.28
(i) Judiciary Committee report. In its report on the bill the Judiciary
Committee stressed that charitable choice is “not new” and has previously been
enacted four times. It stated that the bill is a response to the decline in private
26(...continued)
includes a transcript of the markup. Amendments rejected by the committee included
(i) proposals by Rep. Scott (D.-Va.) to strike the Title VII exemption allowing
religious organizations to discriminate on religious grounds in their employment
practices (11-19), to exclude all ESEA programs from the purview of charitable choice
(10-17), to require an alternative provider to be “at least as accessible” as the original
provider (voice vote), to define a religious organization as a “pervasively sectarian”
entity (voice vote), and to require funding decisions to be made on the basis of the
“objective merits of the applications submitted” (7-20);
(ii) proposals by Rep. Nadler (D.-N.Y.) to broaden the judicial relief provision by
allowing suits against religious organizations as well as governmental agencies and
permitting the award of damages as well as injunctive relief (voice vote); to require as
a condition of eligibility that a religious organization be incorporated separately from
its pervasively sectarian parent or affiliate (voice vote), to bar a religious organization
from engaging any beneficiary in religious activity while that person is receiving
assistance (7-22), and to require that a secular alternative provider be provided to an
individual who objected to the religious character of an initial provider (voice vote);
(iii) a proposal by Rep. Frank (D.-Mass.) to bar religious organizations receiving
assistance indirectly from discriminating against an individual on the basis of a religious
belief (7-15);
(iv) a proposal by Rep. Lofgren (D.-Cal.) to strike the liability reform section
concerning corporate donations to charitable organizations (7-13); and
(v) a proposal by Rep. Jackson-Lee (D.-Tex.) to strike the section concerning the
autonomy of religious organizations (7-19).
Amendments accepted by the committee included one by Rep. Scott to increase the
authorization for technical assistance to $50 million and to allow such assistance to include
help in creating a 501(c)(3) organization (accepted by unanimous consent) and another to add
a provision to the subsection stating that funds are not to be considered aid to the religious
organization saying that Title VI still applies (voice vote); a modified amendment by Rep.
Watt stating that religious organizations that receive public funds, notwithstanding their
partial exemption from Title VII, still must comply with its nondiscrimination provisions
(accepted by unanimous consent); and an amendment by Rep. Frank stating that nothing in
the section alters the duty of a religious organization to comply with Title VI, Title IX, section
504, and the Age Discrimination Act of 1975 (voice vote).
27See H. Rept. 107-138, Part II, 107th Cong., 1st Sess. (July 16, 2001). The committee
reduced the cost of the tax incentives for charitable giving from the $84.4 billion originally
proposed to $6.4 billion (estimated over ten years). See Congressional Quarterly, Ways and
Means Scales Back Bush Plan for Fostering Charitable Donations (July 14, 2001), at 1688.
28147 CONG.REC. H 4222 - H 4281 (daily ed. July 19, 2001)

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philanthropy caused by “higher and higher taxes” as well as to “misguided
understandings of the Constitution” which have prevented government from working
more closely with religious organizations; that support for public funding of social
services programs operated by religious organizations is strong, “particularly ...
among African-Americans”; that “[e]xisting charitable choice programs have had a
significant impact on social welfare delivery”; and that H.R. 7 has been modified to
respond to some of the criticisms that have been made about charitable choice.
The report gave an extended defense of the constitutionality of charitable choice
and of the provision allowing religious organizations to discriminate on religious
grounds in their employment practices. It emphasized that the bill ensures that aid to
social services organizations is distributed in a religiously neutral way and that it
respects the “individual choices, whether religious or nonreligious, of the needy who
are served by these programs.” Recent decisions by the Supreme Court, it said, have
abandoned the notions that public aid cannot be provided directly to pervasively
sectarian organizations and that employees of such organizations “cannot be trusted
to follow guidelines preventing the use of Government funds for proselytizing
activities ....” The bill, it said, contains “constitutionally adequate safeguards” for
monitoring how public funds are used. Moreover, with respect to the new provision
in H.R. 7 authorizing social services programs to be converted to voucher programs
if deemed “feasible and efficient” by the Secretary of the administering department,
the report asserted that “[c]haritable choice programs administered through the use
of vouchers or certificates to individuals, who may then choose to give them to
nonreligious or religious organizations in return for services, enjoy the widest
constitutional berth”:
So long as the initial beneficiaries have a choice about where to redeem the
vouchers or certificates, and a range of choices are available including religious
and nonreligious social service organizations, such programs do not violate the
First Amendment.29
With respect to employment discrimination, the committee report contended that
“one of the most important charitable choice principles is the guarantee of institutional
autonomy that allows faith-based organizations to select staff on a religious basis ....
This guaranteed ability is central to each organization’s freedom to define its own
mission according to the dictates of its faith.” That is the reason, the report stated,
that Congress wrote an exemption for religious organizations into Title VII of the
Civil Rights Act of 1964; and that exemption, it asserted, “is not waived or forfeited
when a religious organization receives Federal funding.” “Staffing on a religious
basis,” it said, does not constitute “invidious discrimination; and constitutionally the
exemption is a “permissible religious accommodation.” Moreover, it stated, this
exemption should apply “even when State or local laws provide otherwise.” Both the
autonomy provision and the provision stating that the charitable choice rules apply to
state funds that are commingled with federal funds, the report stated, serve to preempt
state and local civil rights laws that would intrude on the right of religious
organizations to employ persons of their own faiths. The report noted that under
H.R. 7 the right is judicially enforceable.
29H. Rept. 107-38, Part I, supra,at 28.

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Twelve Democrats filed “Dissenting Views” in the committee report stating that
“[w]e cannot support legislation which seeks to enlarge the role of religious
institutions by sanctioning government-funded discrimination and by breaking down
the historic separation between church and state.” Contending that the bill not only
allows religious organizations to discriminate on the basis of a prospective employee’s
religion but also on the basis of “a failure to adhere to religious doctrine (e.g., being
pregnant and unmarried, being gay or lesbian)” and that it preempts conflicting state
and local nondiscrimination laws as well, the dissenters asserted that “it is
unacceptable for any group or entity to discriminate with taxpayer funds.” Given that
the federally funded services to be provided by such organizations must be wholly
secular under H.R. 7, they said, employment discrimination on the basis of religion is
simply unnecessary.
With respect to the separation of church and state, the dissenters contended that
the safeguards in the bill are inadequate. They noted that H.R. 7 provides no funds
to ensure that a beneficiary’s right to a secular alternative to a faith-based service –
“the most critical Establishment Clause safeguard included in the legislation” – can be
honored and said the requirement constitutes “an unfunded and unenforceable
mandate.” They contended as well that the other “key religious protections in the
bill” – the ban on the use of government funds for sectarian proselytization and the
requirements that religious activity be separate from the funded program and that
participation in such activity be voluntary -- are “largely left to self enforcement.”
They questioned as well whether participation in such programs by children or,
perhaps, even drug addicts could ever be truly voluntary. The dissenters further
argued that the nondiscrimination provisions in the bill still allow religious
organizations to discriminate not only on grounds of religion but also on the grounds
of “sex, pregnancy status, marital status, or sexual orientation.” Moreover, they
asserted, in indirectly funded programs the ban on religious discrimination applies
only to admissions and the requirements that religious activities be separate and
voluntary do not apply at all. The dissenters further charged that the funding process
contemplated by H.R. 7 would diminish religion’s “independent voice of compassion,”
support only those religious groups able to muster sufficient lobbying power to obtain
government grants, precipitate intense religious competition for funds, and lead to
government discrimination against unpopular groups. Finally, the dissenters
expressed “concern that H.R. 7 would fail to pass constitutional muster.”
(ii) Rules Committee report. On July 17, 2001, the House Rules
Committee adopted a rule which provided that in lieu of the bill as reported by the
two committees, a substitute amendment sponsored by Rep. Sensenbrenner which
consolidated and reordered their recommendations would be deemed the pending bill
upon adoption of the rule.30 The rule also made in order a minority substitute
measure that proposed to (1) delete the Title VII exemption allowing religious
organizations to discriminate on grounds of religion in their employment practices, (2)
add a provision making clear that state and local civil rights laws remain applicable to
30See H. Rept. 107-144, 107th Cong., 1st Sess. (July 17, 2001), accompanying H. Res. 196.
The Sensenbrenner substitute was printed in the Congressional Record on July 16 and again
on July 19. See 147 CONG.REC. H 4014-H4019 (daily ed. July 16, 2001) and H 4239-H
4243 (daily ed. July 19, 2001).

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religious organizations receiving funds under charitable choice, (3) bar religious
activity from taking place at the same time and place as a government funded
program, (4) delete the provision allowing programs to be converted to vouchers if
deemed “feasible and efficient” by the Secretary of the pertinent department, (5)
eliminate the liability reform provisions regarding corporate contributions of
equipment and supplies to charitable organizations, and (6) provide a revenue offset
for the cost of the charitable giving tax incentives. Finally, the rule made in order one
motion to recommit.31
(iii) House floor debate. After some delay because of concerns raised by a
Washington Post article that disclosed an apparent agreement between the Salvation
Army and the Administration concerning the issuance of a regulation to preempt state
and local laws barring discrimination on the basis of sexual orientation in exchange
for support for H.R. 7,32 the House took up the measure on July 19, 2001, and
adopted the rule, 228-199. After several hours of vigorous debate, the House then
rejected the minority substitute described above, 168-231; rejected as well a motion
to recommit offered by Rep. Conyers (D.-Mich.) incorporating the first two
provisions of the rejected substitute which would have barred religious discrimination
in employment as well as the preemption of state and local nondiscrimination statutes,
195-234; and adopted the bill, 233-198.33 Prior to the vote on the minority substitute
and in response to concerns raised during the debate about the preemption of state
and local civil rights laws, Rep. Watts (R.-Ok.) made a commitment for himself and
the other primary sponsor of H.R. 7, Rep. Hall (D.-Oh.) to “more clearly address this
issue in conference.”34
In the Senate H.R. 7 has been referred to the Finance Committee.
(b) S. 1924, the “CARE Act of 2002". In the Senate concerns about the
legal and policy implications of charitable choice cast doubt on the prospects for H.R.
7. As a consequence, Senators Lieberman (D.-Cn.) and Santorum (R.-Pa.) led efforts
to develop a bipartisan bill that would have more promising prospects. On February
31The Rules Committee refused to allow three other amendments to be offered – one to bar
religious groups receiving assistance from exempting themselves from state and local civil
rights laws (defeated 4-9), another to prohibit direct funding of pervasively sectarian
organizations (defeated 3-10), and a third to bar the tax provisions from taking effect if the
Director of OMB projects a deficit outside of the Social Security and Medicare Trust Funds
(defeated 3-10). See id. at 2.
32Dana Milbank, Charity Cites Bush Help in Fight Against Hiring Gays, Washington Post,
July 10, 2001, at A1. Later that same day the White House Press Office issued a statement
saying “The White House will not pursue the OMB regulation proposed by the Salvation
Army and reported today.”
33For the full debate on the bill, see 147 CONG.REC. H 4222 - H 4281 (daily ed. July 19,
2001). For the votes, see id. at H 42778-78, H 4280-81, and H 4281, respectively.
34Id. at H 4274 (statement of Mr. Watts of Oklahoma).

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8, 2002, they introduced S. 1924, the “CARE Act of 2002.”35 President Bush
immediately endorsed the bill and urged its adoption.36
S. 1924 is similar to H.R. 7 in several respects. It contains tax incentives for
charitable giving and provisions to promote the establishment of individual
development accounts by and for low-income persons (although these provisions are
both more expansive and more detailed than those in H.R. 7). It also would bar
government at all levels from requiring religious organizations participating in publicly
funded social services programs to remove religious art and icons from their premises
or to change the religious elements of their names or charter documents. But S. 1924
does not contain the other charitable choice provisions of H.R. 7 nor its limitations
on corporate liability. Instead, S. 1924 would
– mandate that nongovernmental organizations not be disadvantaged in
applying to participate in publicly funded social services programs simply because
they have not previously participated;
– authorize social services grants or cooperative agreements to be awarded
to intermediate organizations that could facilitate the participation of small
nongovernmental providers;
– direct the IRS to adopt expedited procedures for acting on applications for
tax-exempt status by social services providers (the EZ Pass system);
– authorize $150 million for a “Compassion Capital Fund” to enable several
federal departments to provide technical and programmatic assistance to small
community-based social services providers;
– restore funding for the Social Services Block Grant program established
under Title XX of the Social Security Act; and
– authorize funding for a new program to support maternity group homes.
S. 1924 has also been referred to the Senate Finance Committee.
(c) Other measures. Another measure pending in the Senate that once
contained charitable choice provisions is S. 304, the “Drug Abuse Education,
Prevention, and Treatment Act of 2001.” As introduced on February 13, 2001, by
Senators Hatch (R.-Ut.) and Leahy (D.-Vt.) and four co-sponsors, the bill would have
extended charitable choice rules to a number of new programs, such as jail-based
substance abuse programs, residential treatment programs for juveniles, programs to
prevent delinquency through character education, and programs to help the children
of prisoners. But in reporting the measure to the Senate on November 29, 2001, the
Senate Judiciary Committee by voice vote approved a substitute measure that does
not contain the charitable choice provisions. (The committee did not issue a report.)
In addition, it might be noted that, as introduced, Title V of H.R. 1, the “No
Child Left Behind Act of 2001,” would have applied a charitable choice provision to
drug and violence prevention programs and before- and after-school programs for
35148 CONG. REC. S 546 (daily ed. February 8, 2002). The full title of the bill is the
“Charity Aid, Recovery, and Empowerment Act of 2002.”
36See n. 17.

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school-age youth. But that provision was not included in the bill as reported37 or as
adopted by the House.38 Nor was charitable choice part of the counterpart measure
adopted by the Senate re-authorizing the Elementary and Secondary Education Act
(S. 1, the “Better Education for Teachers and Students Act).39 As a consequence, no
charitable choice provisions were included in the measure as signed into law by
President Bush on January 8, 2002.40
Finally, it might be noted that the fiscal 2002 appropriations act for the
Departments of Justice, Commerce, and State41 includes a directive that $5 million be
used to start five faith-based pilot programs in prisons to help inmates prepare for
release. The report of the House Appropriations Committee had stated as follows:
In addition, the Committee supports the request to establish a multi-faith based
prison pre-release pilot program. The Committee directs that a fifth pilot be added,
and that it be located at the Petersburg, VA, facility.42
The conference report on the legislation, in turn, stated that “[t]he conference adopts
by reference House language regarding drug treatment programs and establishment
of faith-based and other pilots ....”43
(7) What Does the House-Passed Version of Title II of H.R. 7
Provide and How Does It Differ from Previous Charitable
Choice Statutes?
The charitable choice section of H.R. 7, as approved by the Judiciary Committee
and by the House, contains a more expansive purposes section than prior enactments
stating that the Act is intended not only to prohibit discrimination against religious
organizations on the basis of their religious character and to protect the religious
freedom of beneficiaries but also to provide assistance to individuals and families “in
the most effective and efficient manner” and to facilitate the entry of religious and
other community organizations in the administration and distribution of government
assistance. In addition, with the provisions that differ from the previously enacted
charitable choice statutes highlighted in italics, Title II of H.R. 7 would:
(a) extend charitable choice rules to federally funded activities in nine
program areas – (a) the prevention and treatment of juvenile delinquency and
the improvement of the juvenile justice system; (b) the prevention of crime and
37H. Rept. 107-63, Part I (May 14, 2001)).
38147 CONG. REC. H 2421- H 2516 (daily ed. May 22, 2001).
39147 CONG. REC. S 6305 (daily ed. June 14, 2001).
40P.L. 107-110 (January 8, 2002).
41P.L. 107-77 (Nov. 28, 2001).
42H. Rept. 107-139, 107th Cong., 1st Sess. (July 13, 2001), at 35.
43H. Conf. Rept. 107-278 (Nov. 9, 2001), reprinted at 147 CONG. REC. H 8008 (daily ed.
Nov. 9, 2001).

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CRS-16
assistance to crime victims; (c) the provision of assistance under the federal
housing statutes; (d) workforce investment under subtitles B or D of title I of the
Workforce Investment Act of 199844; (e) the Older Americans Act of 196545; (f)
intervention in and prevention of domestic violence; (g) hunger relief; (h) the
Job Access and Reverse Commute grant program46; and (i) after-school and
GED programs.
(b) state that funds received by religious organizations are to be deemed
aid to individuals and families and not to religion, and are not to be deemed
“an endorsement by the government of religion or of the organization’s
religious beliefs or practices”;
(c) bar government from discriminating against religious organizations that
seek to provide federally funded services because of their religious character;
(d) specify that a religious organization providing assistance “retain[s] its
autonomy from Federal, State, and local governments”;
(e) bar government from requiring religious organizations, as a condition
of eligibility, to change their form of internal governance or to remove religious
symbols or, in new prohibitions, to change “provisions in [their] charter
documents” or “to change [their] name[s]”;
(f) make clear that the Title VII exemption allowing religious organizations
to discriminate on religious grounds in their employment practices is not affected
by their receipt of federal funds;
(g) provide that the Title VII exemption and the provisions of charitable
choice generally override any contrary mandates in the programs to which
charitable choice is extended by the bill;
(h) state explicitly that religious organizations receiving federal financial
assistance pursuant to H.R. 7 must still comply with the nondiscrimination
requirements of Title VI of the Civil Rights Act of 1964,47 Title IX of the
Education Amendments of 1972,48 section 504 of the Rehabilitation Act of
1973,49 and the Age Discrimination Act of 197550;
(i) bar discrimination against beneficiaries generally “on the basis of
religion, a religious belief, or a refusal to hold a religious belief” but, in a new
distinction, limit this nondiscrimination mandate only to admissions in
programs funded by vouchers;
(j) require that beneficiaries that object to the religious character of a
provider be afforded an alternative provider of equal value which, in modified
language, is “unobjectionable to the individual on religious grounds”;
4429 U.S.C.A. 2801 et seq.
4542 U.S.C.A. 3001 et seq.
4649 U.S.C.A. 5309 note.
4742 U.S.C.A. 2000d et seq. (barring discrimination on the bases of race, color, or national
origin).
4820 U.S.C.A. 1681 et seq. (barring discrimination on the basis of gender in federally assisted
education programs).
4929 U.S.C.A. 794 (barring discrimination on the basis of handicap).
5042 U.S.C.A. 6101 et seq. (barring discrimination on the basis of age).

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(k) require that government ensure that notice is given to beneficiaries of
their right to an alternative provider;
(l) require that the programs be implemented in a manner that is consistent
with the establishment clause and, as is also provided by one of the existing
charitable choice statutes, the free exercise clause;
(m) bar the use of funds provided directly (but not funds provided indirectly
) to a religious organization for “sectarian instruction, worship, or
proselytization”;
(n) require that religious activities offered by a religious organization
receiving direct funding be “separate from the program funded under this
subpart” and “voluntary for the individuals receiving services,” and mandate
that religious organizations certify that they will abide by these requirements;
(o) allow assistance under all of the programs to which the charitable
choice provisions of Title VII would apply to be distributed in the form of
vouchers or certificates, if the Secretary of the administering department
determines that to be “feasible and efficient”;
(p) give the states a choice of commingling their own funds with the federal
funds in the pertinent program or of keeping them separate but require that
charitable choice rules apply to all commingled funds;
(q) require that religious organizations providing assistance be subject to
the same regulations as other nongovernmental organizations and that their use
of funds be subject to audit by the government, but allow, and in the case of
direct assistance require, that public funds be kept in a separate account and that
any audit be limited to that account;
(r) require organizations providing services to conduct an annual self-
audit;
(s) in a provision that is also in one of the drug abuse charitable choice
statutes, impose on nongovernmental entities that make subgrants the same
charitable choice obligations imposed on government and, if such entities are
religious in nature, extend to them the same rights otherwise afforded religious
organizations;
(t) allow parties who believe their rights have been violated to bring suit in
state and federal courts for injunctive relief, but in contrast to existing charitable
choice statutes, allow suits only against the federal, state, or local governments
and not against the service providers; and
(u) authorize $50 million to provide training and technical assistance to
small nongovernmental organizations “in procedures relating to potential
application and participation” in the pertinent programs, including assistance
in setting up a 501(c)(3) organization, in applying for grants, and in complying
with the federal nondiscrimination mandates.
(8) What Is the Legal Framework for the Civil Rights Concerns
That Have Been Raised About Charitable Choice?
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. There has also been some

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concern over the protections from discrimination afforded beneficiaries and, in an
issue that has only become apparent in the debates on H.R. 7, 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 mandates barring
discrimination in employment practices, particularly Title VII of the Civil Rights Act
of 1964 and its religious exemption, and (3) the preemption of state and local
nondiscrimination laws that go beyond federal law. The question of the
constitutionality of public aid going to organizations which discriminate on religious
grounds in their employment practices is discussed in question 9.
(a) 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.51 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.52 Section 504 of the
Rehabilitation Act of 1973 bars discrimination on the basis of handicap.53 The Age
Discrimination Act of 1975 bars discrimination on the basis of age.54 All of these
prohibitions on discrimination 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 is not altered
by charitable choice.55
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,56 but there is no general statutory prohibition.
5142 U.S.C.A. 2000d et seq.
5220 U.S.C.A. 1681 et seq.
5329 U.S.C.A. 794.
5442 U.S.C.A. 6101 et seq.
55Because H.R. 7 contains a provision stating that any funds received under the rubric of
charitable choice “constitute[] aid to individuals and families in need” and not aid to the
organization, there was some concern in the House about whether Title VI, Title IX, Section
504, and the Age Discrimination Act would be applicable. Consequently, an amendment was
agreed to in the committee markup and retained in the House-passed bill referencing these
statutes and clarifying that “nothing in this section” affects their applicability.
56See, 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 bill, 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. But there have been some distinctions in the types of religious
discrimination that are prohibited, and H.R. 7 has drawn a new distinction based on
whether the religious organization receives funding directly or indirectly. With
respect to indirect assistance, H.R. 7 would bar religious discrimination against
individuals only in admissions.
All of the existing charitable choice statutes as well as H.R. 7 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 H.R. 7 and one of the substance abuse statutes do not include this latter
prohibition (although H.R. 7's requirement that participation in a religious activity
must be voluntary is arguably equivalent). Moreover, H.R. 7 and the other drug
abuse statute also bar discrimination on the basis of “a refusal to hold a religious
belief.” Finally, H.R. 7 applies its religious nondiscrimination mandates to all aspects
of programs that are directly funded but only to admissions in programs that are
indirectly funded. Given that H.R. 7 also allows the Secretaries of the appropriate
department to convert the programs to which the charitable choice provisions would
be applied to vouchers if they find it to be “feasible and efficient,” this distinction may
be significant.
(b) 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,57 by the Age Discrimination in Employment Act
on the basis of age,58 and by Title VII of the Civil Rights Act of 1964 on the bases of
race, color, national origin, sex, and religion.59
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
5742 U.S.C.A. 12201 et seq.
5829 U.S.C.A. 621 et seq.
5942 U.S.C.A. 2000e et seq.

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organization.”60 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.61
Most important, Title VII specifically exempts religious employers from its ban on
religious discrimination in employment.
Title VII and the religious exemption. It is the Title VII exemption that
has generated extensive debate in the discussion of charitable choice, because all of
the charitable choice statutes and proposals so far, including H.R. 7, 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 ....”62 (S. 1924, it should be noted, contains no such provision.)

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.63
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
6020 U.S.C.A. 1681(a)(3).
6142 U.S.C.A. 12113(c).
62Title II of H.R. 7 as introduced included as well a provision that would have allowed
religious entities receiving public funds to require their employees to adhere to their “religious
practices.” Given the broad construction that has been given the Title VII exemption, that
provision likely added nothing to the Title VII exemption. But in any event, the provision was
not part of the manager’s substitute for Title II proposed at the beginning of the markup of
H.R. 7 by the House Judiciary Committee and was not part of the bill as approved by the
committee or by the House.
6342 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).

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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 organizations64 and has been applied to allow a wide variety of religious
entities to discriminate on religious grounds in a wide variety of circumstances.65
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,66
but several lower federal courts have held the exemption to be applicable to religious
organizations receiving public funds.67 Nonetheless, apparently to eliminate any
possible misunderstanding, all four charitable choice statutes as well as Title II of
H.R. 7 state explicitly that the religious exemption in Title VII is not lost simply
because a religious employer receives public funds.
64Corporation 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.
65See, 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)
(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).
66Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints,
supra, n. 6.
67See, 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).

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Religious organizations that meet the minimum size requirement of Title VII (i.e.
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.68
It can sometimes be a close question, however, whether the alleged discrimination by
a religious employer is based on religion or one of the prohibited bases of
discrimination.69
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.70 It has
68See, 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. 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).
69In 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).
70See 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 African-American
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
(continued...)

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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.71 Because the ministerial exemption is constitutionally based, it is not
modified by charitable choice in any way.
Thus, under the Title VII exemption a religious organization can discriminate on
religious grounds with respect to all of its employees; but if it meets the minimum size
requirement, it is otherwise subject to the statute’s employment nondiscrimination
mandates. With respect to the employment of its spiritual leaders, however, a
religious organization, pursuant to the ministerial exception, is unconstrained by any
nondiscrimination requirement
(c) Preemption of state and local civil rights laws. An issue that
received only slight attention in previous debates on charitable choice gained
substantial visibility during House consideration of H.R. 7. That issue concerns 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, as well as Title II of H.R. 7, 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.” But prior to the House
debate on H.R. 7, there has been no legislative history explicating the meaning of this
provision. Similarly, all of the charitable choice statutes and proposals 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,72 little attention has been paid to whether these provisions might have a
preemptive effect on state and local civil rights laws.
The House debate on H.R. 7 made clear that these provisions, and particularly
the first one concerning the independence of religious organizations, are intended to
preempt state and local civil rights laws. The report of the House Judiciary
Committee stated:
70(...continued)
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).
71See, 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).
72P.L. 106-554,which added charitable choice provisions to Title V of the Public Health
Services 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.”

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Because H.R. 7 expands charitable choice principles to cover many new Federal
programs, one uniform rule should apply to all programs and allow religious
organizations to retain their autonomy over the definition, development, practice,
and expression of their religious beliefs, including through hiring staff. This is so
even when State or local laws provide otherwise .... Wherever federal funds go,
this statutory right of religious organizations to staff on a religious basis should
follow ....73
The report similarly made clear that if state and local funds are commingled with
federal funds in an applicable program, state and local civil rights laws will not apply
to those funds.74
Under the supremacy clause of the Constitution,75 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.
(9) Is Charitable Choice Constitutional?
As noted in question 1, the charitable choice statutes and Title II of H.R. 7
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. Title II of H.R. 7,
although not the charitable choice statutes previously enacted into law, also requires
that any religious activity offered by a religious organization be separate from the
program that receives direct federal assistance and that participation in any religious
activity that is directly funded be voluntary for the individuals receiving services.
On the other hand, all of the statutes as well as H.R. 7 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
73H. Rept. 107-138, Part I, supra, at 37.
74Id. at 38. During the markup of the bill, Rep. Sensenbrenner responded to a question from
Rep. Frank about the preemptive effect of the measure on state and local laws by stating that
“Federal law applies where Federal funds go, and State law does not apply.” Id. at 176. The
committee also rejected an amendment by Rep. Frank to bar religious organizations receiving
assistance from discriminating against any individual “on any basis prohibited under
applicable Federal, State, or local law ....” Id. at 249-254. It rejected as well an amendment
by Rep. Jackson-Lee specifying that religious organizations receiving assistance would not
be exempt from state and local laws. Id. at 258-266. Floor debate during House
consideration of H.R. 7 also made clear the preemptive effect of the bill on state and local
laws.
75U.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.”

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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 proposals
seem premised on the assumption that charitable choice will 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
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 cases of TANF and Title II of H.R. 7, 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 appears to be shifting, at least with respect
to direct aid. The Court’s past decisions have 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. Felton76 and Mitchell v. Helms77 appear to relax the
strictures on direct aid to an as-yet indeterminate degree.
The following subsections detail the constitutional frameworks that appear to
govern direct and indirect aid and apply them to H.R. 7:
(a) Direct aid. In general terms the establishment clause has been construed
by the Supreme Court to “absolutely prohibit government-financed or government-
76521 U.S. 203 (1997).
77530 U.S. 793 (2000).

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sponsored indoctrination into the beliefs of a particular religious faith.”78
“[G]overnment inculcation of religious beliefs,” the Court has stated, “has the
impermissible effect of advancing religion.”79 To guard against that effect, public
assistance which flows directly to religious institutions in the form of grants or
cooperative agreements has in the past been required to be limited to aid that is
“secular, neutral, and nonideological....”80 That is, government has been able to
provide direct support to secular programs and services sponsored or provided by
religious entities, but it has been barred from directly subsidizing such organizations’
religious activities or proselytizing. Direct assistance, the Court has held, must be
limited to secular use.81
Thus, under this interpretation of the establishment clause, religious
organizations have not automatically been disqualified from participating in public
programs providing direct assistance. But in order to meet the secular use
requirement, such organizations have 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 activities from their religious functions and
activities. To the extent they have done so, it has been deemed constitutionally
permissible for government to provide direct funding to their secular functions.
This interpretation of the establishment clause has also generally meant that it has
been constitutionally impermissible for religious organizations that are pervasively
sectarian to participate in direct public aid programs. The Court has not laid down
a hard and fast definition of what makes an organization pervasively sectarian.82 But
78Grand Rapids School District v. Ball, 473 U.S. 373, 385 (1973).
79Agostini v. Felton, 521 U.S. 203, 223 (1997).
80Committee for Public Education v. Nyquist, 413 U.S. 756, 780 (1973).
81Committee for Public Education v. Nyquist, supra; Lemon v. Kurtzman, 403 U.S. 602
(1971); Bowen v. Kendrick, 487 U.S. 589 (1988).
82The Court has 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
(continued...)

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it has described them generally as organizations permeated by a religious purpose and
character and as entities whose secular functions and religious functions are
“inextricably intertwined.” In such religion-dominated institutions it is simply
impossible, the Court has stated, to limit public aid to secular use. (It might be noted
that one important element in the Court’s determination of whether a religious entity
is pervasively sectarian has often been whether it discriminates on religious grounds
in its employment practices.83 But the Court has never looked exclusively at that
factor in making its constitutional determination; and in some of its decisions
regarding the constitutionality of direct aid, it has not looked at that factor at all.84)
The Court crystallized this understanding of the establishment clause in what is
known as the tripartite Lemon test. That test, named after the case of Lemon v.
Kurtzman85 in which it was first given full expression, originally 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.”86
The secular purpose test has rarely posed a serious obstacle, but in the past both the
primary effect and entanglement tests have often proved fatal to public aid programs
directly benefiting sectarian institutions. As noted above, the primary effect test has
been construed to mean that direct public aid be limited to secular use; and as a
consequence the courts have applied this test to strike down programs in which the
82(...continued)
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).
83See, 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).
84See, 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”).
85403 U.S. 602 (1971).
86Id. at 612-13.

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aid was not limited to secular use either by its nature or by statutory or regulatory
constraint.87 This test has also been used to strike down programs providing direct
aid to pervasively sectarian institutions due to the assumption that religious and
secular functions in such institutions are “inextricably intertwined.”88 Even if aid
programs have been limited to secular use and, thus, have passed muster under the
primary effect test, they still often foundered on the excessive entanglement test
because the Court presumed that in pervasively religious entities the government
would have to so closely monitor the use of the aid to enforce the secular use
limitation that it would inevitably become excessively entangled with the religious
enterprise.89
As a practical matter, these interpretations of the establishment clause have had
their most severe effects on programs providing direct aid to sectarian elementary and
secondary schools, because the Court has presumed that such schools are pervasively
sectarian. The Court has presumed to the contrary with respect to sectarian colleges,
hospitals, and other social welfare organizations, although it has held open the
possibility that some of these agencies might be pervasively sectarian.90
In its most recent decisions, however, the Court appears to have 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. In the process it has also reformulated
the Lemon test.
Three years ago in Agostini v. Felton91 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.92 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
87See, 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).
88See, e.g., Wolman v. Walter, supra, and School District of the City of Grand Rapids v. Ball,
473 U.S. 373 (1985).
89Lemon v. Kurtzman, supra; Meek v. Pittenger, supra; Aguilar v. Felton, 473 U.S. 402
(1985).
90See Bowen v. Kendrick, 487 U.S. 589 (1988).
91521 U.S. 203 (1997).
92The 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).

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because they happen to be in a sectarian environment.”93 As a consequence, it said,
it had also to “discard the assumption that pervasive monitoring of Title I teachers is
required.”94 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.95
Most recently, the Court in Mitchell v. Helms96 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.97 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:
(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.98
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 (1)
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 (2) that it does not result in religious indoctrination which is
attributable to the government.
93Agostini v. Felton, supra, at 234.
94Id.
95Id. at 232-33.
96530 U.S. 793 (2000).
97Overturned in part were Meek v. Pittenger, 421 U.S. 349 (1975) and Wolman v. Walter,
433 U.S. 229 (1977).
98Mitchell v. Helms, supra, at 845 (opinion of O’Connor, J.).

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(b) Indirect aid. Indirect aid in the form of tax benefits or vouchers, however,
has been less constrained by the Court’s decisions. If the programs have been
designed in such a manner that the aid will inevitably be channeled primarily to
sectarian institutions, the Court has held the programs to be unconstitutional.99 But
if such aid programs have been religiously neutral in design and the initial
beneficiaries, i.e., the taxpayers or voucher recipients, have had a genuinely
independent choice about whether to use the aid at secular or sectarian institutions,
the Court has held the programs constitutional and ruled that even pervasively
sectarian entities are constitutionally eligible to participate.100 Indeed, the Court has
made clear that indirect aid which ultimately benefits 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.101
Justice Powell, in a concurring opinion in Witters, summarized the critical factors
as follows:
Mueller makes the answer clear: state programs that are wholly neutral in offering
educational assistance to a class defined without reference to religion do not violate
the second part of the Lemon v. Kurtzman test, because any aid to religion results
from the private choices of individual beneficiaries. Thus, in Mueller, we
sustained a tax deduction for certain educational expenses, even though the great
majority of beneficiaries were parents of children attending sectarian schools. We
noted the State’s traditional broad taxing authority ..., but the decision rested
principally on two other factors. First, the deduction was equally available to
parents of public school children and parents of children attending private schools.
Second, any benefit to religion resulted from the “numerous private choices of
individual parents of school-age children.”102
(It should be noted that in its present Term the Court is reviewing the
constitutional standards that govern indirect aid programs. Before it is the case of
Zelman v. Simmons-Harris,103 which involves the constitutionality of an educational
voucher program in Cleveland, Ohio. The Court heard oral argument on the case on
February 20, 2002.)
(c) Constitutionality of charitable choice.
Some aspects of the charitable
choice proposals that have been enacted as well as Title II of H.R. 7 likely satisfy the
foregoing requirements. Particularly with respect to indirect aid programs, the
Court’s interpretations of the establishment clause suggest that it poses no barrier
99Committee for Public Education v. Nyquist, supra, and Sloan v. Lemon, supra.
100Mueller v. Allen, 463 US. 388 (1983); Witters v. Washington Department of Social
Services, 474 U.S. 481 (1986); and Zobrest v. Catalina Foothills School District, 509 U.S.
1 (1993).
101For a more detailed examination of the constitutional standards governing indirect aid and
for summaries of recent judicial developments, see CRS, Education Vouchers: Constitutional
Issues and Cases (Report RL30165).
102Witters v. Washington Department of Services for the Blind, supra, at 490-91 (Powell, J.,
concurring).
103234 F.3d 945 (6th Cir. 2000), cert. granted, 70 U.S.L.W. 3232 (2001) (No. 00-1751).

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with respect to indirect public aid to religious entities that discriminate on religious
grounds in their employment practices. Indirect assistance, the Court has said, can
ultimately flow even to pervasively sectarian institutions; and one of the criteria often
used to identify such an institution is whether it discriminates on religious grounds in
its employment practices. Thus, a number of recent 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.104
Similarly, the Court’s standards suggest that the establishment clause may pose
no obstacle to the inclusion of religious worship, instruction, and proselytizing in
programs that receive public funds indirectly pursuant to charitable choice. As noted,
even pervasively sectarian entities have been held eligible to participate in such
programs by the Court.
Nonetheless, there may still be a constitutional question raised about charitable
choice with respect to indirect aid. The critical issue for indirect aid has been whether
there is a genuinely independent decision-maker between the government and the
entity that ultimately receives the assistance or whether the government has virtually
dictated by the structure of the program that the aid ultimately goes to a religious
entity. All of the charitable choice measures require that those who object to a
particular religious provider be given an alternative that is either secular or, as in H.R.
7, not religiously objectionable. But they do not require that a voucher recipient have
a choice of 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 can pass constitutional muster seems more complex. 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. But it had never relied on that factor alone; other factors always entered
into the constitutional equation. 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
104See, 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).

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CRS-32
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.
Nonetheless, the Court’s decisions make clear that direct public aid cannot be
used for religious indoctrination. Notwithstanding the apparent assumption
underlying charitable choice that religious entities will in some manner employ their
religious faiths in carrying out the publicly funded programs, all of the charitable
choice measures prohibit direct aid from being used for religious worship, instruction,
or proselytizing. H.R. 7 buttresses this prohibition with requirements that any
religious activity be entirely separate from the publicly funded program and that any
participation in such activity be wholly voluntary. Arguably, these prohibitions and
requirements go far to meet the requirements of the establishment clause with respect
to the content of programs that receive direct aid. But given the assumption that
underlies charitable choice and the various possibilities for how particular programs
might be implemented, it also seems likely that constitutional questions will inevitably
arise in the implementation of direct aid programs under charitable choice.
In addition, it should be emphasized 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 revised standards; and direct grants of
money are what seem contemplated in the programs to which charitable choice now
applies or would be applied should H.R. 7 be enacted. Justice O’Connor, joined by
Justice Breyer, stated 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.”105 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.106
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
105Mitchell 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).
106Id. at 890 (Souter, J., dissenting).

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CRS-33
schools or entities directly rather than, as in Witters and Mueller, indirectly.”107 These
statements are all dicta, however, and do not indicate with any certainty how the
Court might rule on a case involving a particular grant or cooperative agreement.
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.108 Neither Agostini nor Mitchell addressed that form of aid. 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.”109 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.110 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 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.
107Id. at 818-19, quoting Rosenberger, supra, at 842 (Thomas, J., plurality opinion) (emphasis
in original).
108Dodge 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 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).
109Columbia Union College v. Oliver, 254 F.3d 496 (4th Cir. 2001).
1102001 U.S. Dist. LEXIS 10283, 86 FEP Cases 417 (W.D. Ky. 2001).

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CRS-34
(10) Have any Court Suits Involving Charitable Choice or
Similar Programs Been Filed or Decided As Yet?
At least four pertinent suits have been initiated, three of which have been decided
(at least in part). In Freedom from Religion Foundation v. McCallum111 a federal
district court on January 7, 2002, struck down as unconstitutional the public funding
of a Wisconsin welfare-to-work program operated by an organization named Faith
Works which employed a “faith-enhanced” version of the Alcoholics Anonymous 12-
step program as a central element of its residential recovery services to male drug and
alcohol addicts. The program was funded by $600,000 in direct grants from the
governor’s discretionary fund under the federally funded welfare-to-work program.
Using the Lemon-Agostini-Mitchell test described above, the court found that the
grants served a secular purpose, did not define their recipients on the basis of religion,
and did not precipitate excessive entanglement. But it held that the grants resulted
in religious indoctrination attributable to the government. It described Faith Works
as a holistic program that sought to “indoctrinate[] its participants in religion” and
concluded that “religion is so integral to the Faith Works program that it is not
possible to isolate it from the program as a whole.” Safeguards in federal and state
law barring the use of funds for religious purposes, it asserted, “exist only on paper”
and are “insufficient to insure that public funding ... does not contribute to a religious
end.” Although the state welfare-to-work program was funded under the federal
welfare reform statute and thus was subject to the charitable choice provisions of that
statute, the court found the suit not to challenge the constitutionality of charitable
choice on the grounds that charitable choice itself bars the “direct funding of religious
activities.” (The plaintiffs also challenged the constitutionality of a public subsidy
given Faith Works by the Wisconsin Department of Corrections to operate a halfway
house providing addiction recovery services to designated offenders. But the court
found sufficient factual uncertainty about how the program operated to order a trial
on that issue.) This decision seems likely to be appealed.
As noted in the preceding section, Pedreira v. Kentucky Baptist Homes for
Children112 did not involve a federally funded program but raised the question of
whether the establishment clause allows the direct public funding of a religious entity
that fired an employee who was found to be a lesbian on the grounds her sexual
orientation violated the agency’s religious beliefs. On July 23, 2001, a federal district
court held that the employee’s dismissal did not constitute religious discrimination,
because her lifestyle was not premised on any religious beliefs and Baptist Homes did
not require her to accept its religious beliefs. It only required conformity, the court
said, with a behavioral requirement. The court held over for trial, however, a separate
claim alleging that public funds were being used by Baptist Homes for the purpose of
religious indoctrination in violation of the establishment clause. In so doing it rejected
an argument that Mitchell dictated judgment for Baptist Homes, saying that “Mitchell
is factually dissimilar from this case,” in part because this case involves “direct
monetary assistance.” Thus, the case continues to have implications for charitable
choice.
1112002 U.S. Dist. LEXIS (W.D. Wis., decided January 7, 2002).
112See n. 110.

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CRS-35
A third suit, American Jewish Congress v. Bost contended that a welfare-to-
work training program funded under the TANF program in Brenham, Texas, was
permeated with the teachings of Protestant evangelical Christianity and even used
public funds to purchase Bibles for participants. The suit contended that the funding
had been provided pursuant to directives promulgated by then-Governor George Bush
that implemented the provisions of charitable choice. But the case was dismissed as
moot in early February because the program was no longer being funded by the state.
The plaintiffs have appealed that decision to the U.S. Court of Appeals for the Fifth
Circuit and have asked that court to order a trial on the constitutional issue.
. American Jewish Congress v. Bernick charges that the California Employment
Development Department gave an unconstitutional preference for religion by inviting
only religious groups to submit proposals on how to use $5 million in job training
funds under TANF. The suit charges as well that the bid invitation violates the
mandate of charitable choice that religious and non-religious providers be given equal
treatment. The suit is pending in the California Superior Court for the County of San
Francisco.

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CRS-36
Appendix: Comparison of Charitable Choice Statutes with Title II of H.R. 7,
as Adopted by the House
1. States purpose to be to
2. Bars gov. from
3. Requires that FBOs
4. Bars gov.
5. Provides that Title VII
allow FBOs to participate on
discriminating on the
remain independent of
interference with
exemption allowing FBOs to
same basis as secular
basis of an FBO’s
government and retain
FBOs’ form of
discriminate on religious
organizations without
religious character
control over expression
internal governance
grounds in their
impairing their religious
of religious beliefs
or displays of
employment practices is not
character or religious
religious symbols
affected by receipt of public
freedom of beneficiaries
funds under designated
programs
Welfare Reform (42
X
X
X
X
X
USCA 604a)
Community Services
X
X
X
X
Block Grant (42 USCA
9920)
Children’s Health Act
X
X
X
X
X (also allows FBOs to
(42 USCA 300x-65)
require adherence to rules
forbidding the use of drugs or
alcohol)
Community Renewal
X
X
X
X
X (also states that this does
Tax Relief Act of 2000
not affect the applicability of
(42 USCA 290kk)
any other employment non-
discrimination statute)
Title II of H.R. 7, the
X (also to provide aid in most
X
X
X (also bars gov. from
X (also states that Title VII
“Charitable Choice
effective manner and to
requiring changes in
exemption and charitable
Act of 2001"
broaden the Nation’s social
charter documents or
choice override contrary
services capacity)
in name)
provisions in program
statutes, and specifies that
Title VII continues to apply)

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CRS-37
6. Bars discrimination
7. Requires gov. to
8. Requires gov. to
9. Requires
10. Requires
11. Bars use of
against beneficiaries on
provide those who
give notice to
programs to be
programs to be
direct aid for
basis of religion or a
object to FBO’s
beneficiaries of
consistent with the
consistent with the
sectarian worship,
religious belief
religious character
right to an alternate
establishment
free exercise clause
instruction, or
an accessible
provider
clause
proselytization
alternate provider of
equal value
Welfare Reform (42
X (also on the basis of a
X
X
X
USCA 604a)
“refusal to actively
participate in a religious
practice”)
Community Services
X
X
Block Grant (42
USCA 9920)
Children’s Health
X (also on the bases of a
X
X
X
X
Act (42 USCA 300x-
“refusal to hold a religious
65)
belief or a refusal to
actively participate in a
religious practice”)
Community Renewal
X
X
X (imposes duty on
X
X
X
Tax Relief Act of
“program
2000 (42 USCA
participants” as well,
290kk)
and requires them to
“ensure” individual
makes contact with
alternate provider)
Title II of H.R. 7, the
X (also on the basis of “a
X (alternative must be
X
X
X
X
“Charitable Choice
refusal to hold a religious
“unobjectionable to the
Act of 2001"
belief,” and requires for
individual on religious
direct aid programs that
grounds”)
participation in religious
activities be voluntary)

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CRS-38
12. Requires
13. Requires FBOs to
14. Allows audits of
15. States that public
16. States that public
17. States that Title
FBOs to certify
be subject to same
FBOs but requires
aid to FBOs is aid to
funding is not to be
VI, Title IX, Section
compliance with #
accounting
public funds to be
the individual or
deemed a government
504, and Age
11
requirements as non-
segregated from
family and not to
endorsement of religion
Discrimination Act
FBOs for use of funds
FBOs’ own funds
religion or the
or of an FBO’s religious
remain applicable to
organization’s
beliefs or practices
FBOs receiving
religious beliefs or
assistance or providing
practices
services
Welfare Reform (42
X
X (allows, but does
USCA 604a)
not require, funds to
be segregated)
Community Services
X
X
X (bars discrimination
Block Grant (42
on the basis of race,
USCA 9920)
color, national origin,
and sex, and states that
Age Discrimination
Act, Section 504, and
Title II of the ADA are
applicable)
Children’s Health
X
X
Act (42 USCA 300x-
65)
Community
X
X
Renewal Tax Relief
Act of 2000 (42
USCA 290kk)
Title II of H.R. 7,
X (also with the
X
X (requires
X (specifies that Title
X
X
the “Charitable
voluntariness
segregation for
VI still applies to
Choice Act of 2001"
requirement of # 6)
direct aid, allows it
direct aid programs)
for indirect aid, and
mandates an annual
self-audit)

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CRS-39
18. States that an
19. Allows suits for
20. Provides that
21. Requires states
22. Directs
23. Authorizes
intermediate grantor
injunctive relief in
charitable choice will
to accept training of
Departments to
training and
has same duties as
state or federal court
apply to state funds
drug counselors by
disburse funds as
technical
gov. in making
for alleged violations
that are commingled
FBOs that is
indirect assistance
assistance program
subgrants but, if an
with federal funds
“equivalent” to
where “feasible and
for “small non-
FBO, retains all rights
usual educational
efficient”
governmental
of FBOs
requirements
organizations”
Welfare Reform (42
X
USCA 604a)
Community Services
X (refers only to duties)
Block Grant (42
USCA 9920)
Children’s Health
X
X
X
Act (42 USCA 300x-
65)
Community Renewal
X (only against federal
X
Tax Relief Act of
government in federal
2000 (42 USCA
court)
290kk)
Title II of H.R. 7, the
X
X
X
X
X
“Charitable Choice
Act of 2001"

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