Charitable Choice: Expansion by Executive Action

Charitable Choice: Expansion by Executive Action

Order Code RS21924
Updated January 12, 2005
CRS Report for Congress
Received through the CRS Web
Charitable Choice:
Expansion by Executive Action
Joe Richardson
Domestic Social Policy Division
Summary
Charitable choice laws, which seek to promote use of religious organizations as
providers of social services without impairing the religious liberty of beneficiaries or the
independence of religious providers, now apply to a limited set of programs (See CRS
Report RL31042, Charitable Choice: House-Passed Version of H.R. 7 Compared with
Existing Charitable Choice Laws). In his faith-based initiative, President Bush
proposed a sweeping expansion of charitable choice coverage. The House passed an
expansion bill (H.R. 7 of 2001), but it died in the Senate. The President then issued an
executive order (EO 13279) covering most all federally funded public aid and social
service programs (broadly defined) and ordered the relevant agencies, to the extent
allowed by law, to bring their policies into conformity with basic charitable choice
principles identified by him. Pursuant to the order, agencies have changed many rules.
For instance, new regulations of two agencies permit use of government funds to
construct buildings used for provision of both secular services and religious activities,
provided the government-sponsored areas are not a “principal place of worship.” One
department has dropped a rule forbidding use of federal money to train at a divinity
school or department. One department, mindful of the White House public position that
“religious hiring rights must be preserved,” has repealed regulations forbidding religious
organizations to give preference to co-religionists when hiring staff. In general, the
regulations distinguish between direct funding (contract or grant) and indirect public
funding (voucher or certificate). They provide that if a religious organization engages
in inherently religious activities, it must offer those services separately in time or
location from any programs supported with direct federal funds and that beneficiary’s
participation must be voluntary. This report will be updated when events warrant.
Table 1 compares selected provisions of the House-passed Charitable Choice
Expansion Act of 2001 (Title II of H.R. 7; the most recent comprehensive congressional
action), with the December 2002 Executive Order. It shows that three House provisions
were not among charitable choice “principles” listed in EO 13279: (1) Authority for a
Cabinet Secretary to require that some or all program funds be in the form of vouchers,
certificates, or other indirect aid; (2) a stipulation that a religious organization
participating in a covered social service program would retain its right to hire only co-
religionists; and (3) a requirement for alternate providers for beneficiaries who object to
Congressional Research Service ˜ The Library of Congress

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the religious character of a service provider. It also shows that the EO applies to many
more programs than did H.R. 7.
Existing Bars on Religious Discrimination in Hiring. “To the extent permitted
by law,” agencies must adopt the principles in the EO. Existing laws governing three
social service programs have provisions barring religious discrimination in employment:
Head Start,1 the Workforce Investment Act (WIA),2 and substance abuse and mental
health block grant funds under the Public Health Services Act.3 The House voted in
2003 to repeal the Head Start and WIA prohibitions on religious discrimination in
employment: Head Start on July 25 (H.R. 2210) and WIA on May 8 (H.R. 1261). The
Senate’s counterpart measures (S. 1940 and S. 1627) lacked these provisions. In both
cases, there was no final congressional action in the 108th Congress. In its final rule
governing Substance Abuse and Mental Health Services Administration (SAMSHA)
charitable choice provisions, the Bush Administration held that religious
nondiscrimination hiring rules of SAMSHA law are “inapplicable” to religious
organizations that demonstrate that the rules would substantially burden their exercise of
religion. The Administration maintained that the Religious Freedom Restoration Act of
1993 (P.L. 103-141) forbids the government from substantially burdening a person’s
exercise of religious unless this is the least restrictive way to further a compelling
government interest.
Charitable Choice Regulations. Between January 4 and July 16, 2004, the
Departments of Agriculture, Education, Health and Human Services (HHS), Housing and
Urban Development (HUD), Justice, Labor, and Veterans Affairs issued final regulations
to incorporate charitable choice principles in their social service programs. The cardinal
charitable choice rule is that religious organizations should be eligible to compete for
funding on the same basis as other organizations. This repudiates the doctrine that public
funds given to “pervasively sectarian” organizations violate the Constitution by promoting
religion. The new regulations spell out the terms under which faith-based organizations
can provide federally funded services, as follows: (1) federal funds directly received by
an organization cannot be used to pay for inherently religious activities, such as worship,
religious instruction, or proselytization; (2) if the organization engages in religious
activities, it must offer them separately, in time or location, from services paid with direct
federal funds; (3) if federal funds are received indirectly by an organization (through
vouchers or certificates) as the result of the independent choice of the beneficiary, the
money may finance religious activities; (4) religious organizations that provide federally
funded services retain their independence and may continue to carry out their mission;
(5) the organization may give preference to co-religionists in hiring staff (unless the law
1 Section 654 of the Head Start Act requires each Head Start grant or contract to specifically
provide that no person with responsibilities in operation of the program will discriminate with
respect to the program, project or activity because of creed or belief, among other factors.
2 Section 188 of WIA provides that no person shall be denied employment because of religion,
among other factors.
3 The Public Health Service Act provides that no one shall be excluded from, denied benefits of,
or subjected to discrimination under a program or activity receiving block grants from the
Substance Abuse and Mental Health Services Administration (SAMSHA) on grounds of religion.
Courts have held that these prohibitions against religious discrimination apply to employment
practices as well as to beneficiary service.

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of a specific program prohibits this);4 and (6) the organization must not discriminate on
religious grounds in providing the social service.
Many of the new regulations drop long-standing restrictions. Examples follow. The
Department of Education has eliminated a rule barring use of its grants for services
provided by a school or department of divinity. The Labor Department has rescinded a
rule against having religious services on the same premises as Job Corps centers. The
Department of Veterans Affairs no longer requires that religious providers of services for
the homeless certify that they will not exert “religious influence” in their program, and it
no longer prohibits religious preference in hiring by religious organizations. HUD has
rescinded a rule barring religious groups from directly owning housing projects. The new
rules of HUD and the Department of Agriculture permit federal funds to be used to
acquire, construct, or repair a structure used for provision of both secular services and
religious activities, so long as the government-sponsored areas are not the “principal place
of worship.” Agriculture Department regulations clarify a pre-existing practice under
which religious schools that receive school lunch funds may require their students to
attend religious classes. The Justice Department has dropped a rule barring religious
groups from ever making religious use of certain property transferred to them for social
service purposes — and now permits religious usage after five years. Justice Department
regulations also allow use of federal funds to pay for chaplains to work with inmates in
penal institutions.
Missing from the new regulations is a major provision of the House-passed H.R. 7
— a requirement that a beneficiary who objects to a provider on grounds of religion be
offered an alternate and accessible provider. HHS declined to include this requirement,
but noted in the preamble to its regulations that one commentor insisted that “redeemable
vouchers that give beneficiaries choices between programs are only as real as the choices
among programs.” Asked by one commentor for a definition of “faith-based,” HHS said:
that it used the terms “religious organization” and “faith-based organization”
interchangeably. It added that neither the U.S. Constitution nor the relevant Supreme
Court precedents contain a comprehensive definition of religion or a religious
organization.
The Bush Administration has pursued its faith-based initiative vigorously, setting up
offices of faith-based and community initiatives (OFBCIs) in 10 agencies and the White
House. The White House OFBCI has conducted an outreach campaign, sponsoring
regional conferences, and agency OFBCIs have sponsored workshops offering technical
help in applying for federal funds. In his 2004 State of the Union address, President Bush
said he wanted Congress to codify the regulatory expansion of charitable choice.

4 The Workforce Investment Act (WIA) and Head Start law bar specifically bar religious
discrimination in employment program employment. Court rulings have held that SAMSHA law
prohibitions against religious discrimination apply to program employment, but the
Administration has taken the stand that the Religious Freedom Restoration Act of 1993 may
override this.

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Table 1. Major Provisions of the Charitable Choice Expansion Act
and Executive Order 13279
Charitable Choice Expansion Act of 2001
EO 13279 (lists “Principles” that agencies
(Title II of H.R. 7 as passed by House)
must adopt, to the extent permitted by law)
Purposes
To provide assistance to needy individuals and To ensure the economical and efficient
families in the most effective and efficient manner.
administration and completion of government
contracts.
To supplement the nation’s social service capacity by To further the effort to expand opportunities for,
facilitating the entry of new efforts and expanding and strengthen the capacity of, faith-based and
existing efforts by religious and other community community organizations so that they may better
organizations in the administration and distribution meet social needs.
of government assistance under covered programs.
To prohibit discrimination against religious To ensure equal protection of the law for faith-
organizations on the basis of religion in the based and community organizations.
administration and distribution of government
assistance under covered programs.
To allow religious organizations to assist in the
administration and distribution of assistance without
impairing their religious character.
To protect the religious freedom of those in need
who are eligible for government aid, including
expanding the possibility of their choosing to receive
services from a religious organization.
To guide federal agencies in developing policies
regarding faith-based and other community
organizations.
Programs Covereda
Programs that use federal funds and carry out All “social service” programs, broadly defined as
activities in nine categories, namely, programs that programs administered by the federal government,
are:
or by a state or local government using federal
— related to the prevention and treatment of financial assistance, that provide services directed
juvenile delinquency and the improvement of the at reducing poverty; improving opportunities for
juvenile justice system,
low-income children; revitalizing low-income
— related to the prevention of crime and assistance communities; empowering low-income families
to crime victims and offenders’ families,
and low-income individuals to become self-
— related to the provision of assistance under sufficient; or otherwise helping people in need.
federal housing laws,
(Examples given include child care services;
— training programs under the Workforce protective services for children and adults; foster
Investment Act,
care adoption services; services to meet special
— under the Older Americans Act;
needs; transportation; job training and
— related to intervention in and prevention of employment services, information, referral and
domestic violence,
counseling services; meal preparation and
— related to hunger relief activities;
delivery and services related to soup kitchens or
— under the Job Access and Reverse Commute food banks; health support services; literacy;
grant program and
mentoring services to prevent and treat juvenile
— to assist students obtain equivalents of secondary delinquency and substance abuse; services related
school diplomas and activities relating to non-school- to domestic violence and housing assistance.)
hour programs.

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Charitable Choice Expansion Act of 2001
EO 13279 (lists “Principles” that agencies
(Title II of H.R. 7 as passed by House)
must adopt, to the extent permitted by law)
Equal Treatment of Religious Organizations
For a covered program carried out by the federal The nation’s social service capacity will benefit if
government, or by a state or local government with all eligible organizations, including faith-based
federal funds, the government must consider and community organizations, are able to compete
religious organizations on the same basis as other on an equal footing for federal financial assistance
non-governmental organizations.
used to support social service programs.
Neither the federal government, nor a state or local No organization should be discriminated against
government receiving funds under a covered program on the basis of religion or religious belief in the
may discriminate against an organization that administration or distribution of federal financial
provides assistance or applies to provide assistance assistance under social service programs.
under the program, on the basis that the organization
has a religious character.
Nondiscrimination against Beneficiaries
Direct funding. A religious organization, in carrying All organizations that receive federal funds under
out a covered program of assistance through a grant social service programs should be prohibited from
or cooperative agreement, may not discriminate discriminating against beneficiaries or potential
against a beneficiary or applicant on the basis of beneficiaries of the programs on the basis of
religion, a religious belief, or a refusal to hold a religion or religious belief. Accordingly,
religious belief.
organizations, in providing federally supported
services and in their related outreach activities
Voucher or other indirect aid. A religious should not be allowed to discriminate against
organization, in carrying out a covered program of current or prospective program beneficiaries on
assistance through a voucher, certificate, or other the basis of religion, a religious belief, a refusal to
form of indirect disbursement, may not deny hold a religious belief, or a refusal to actively
admission into the program on the basis of religion, participate in a religious activity.
religious belief, or refusal to hold a religious belief.
Limitation on Use of Funds for Religious Activities
Contracts or grants. No funds provided through a Contracts or grants. An organization may not use
grant or contract to a religious organization for direct federal financial assistance to support any
assistance under a covered program may be spent for inherently religious activities, such as worship,
sectarian worship, instruction, or proselytization.
religious instruction, or proselytization.
If a religious organization that receives funds through Organizations that engage in inherently religious
a grant or contract offers religious activities, they activities must offer those services separately, in
must be voluntary for recipients, and offered separate time or location, from any program or services
from the program funded under this act.
supported with direct Federal financial assistance,
and participation in these activities must be
voluntary for the beneficiaries.
Each recipient organization must file a certificate
certifying that the organization is aware of and will
comply with these rules.
Certificates or vouchers. When consistent with the Certificates or vouchers. No explicit provision.b
purpose of a covered program, the Secretary of the
administering department may require that some or
all of the funds be in the form of vouchers,
certificates or other forms of indirect disbursement.
Organizations receive these funds only as a result of
private choices of beneficiaries, and no government
endorsement of any religion, or of religion generally,
occurs.

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Charitable Choice Expansion Act of 2001
EO 13279 (lists “Principles” that agencies
(Title II of H.R. 7 as passed by House)
must adopt, to the extent permitted by law)
Rights of Beneficiaries to Alternate Provider
If a beneficiary or applicant has an objection to the No provision for alternate provider.
religious character of the organization providing
assistance, the appropriate governmental entity must
provide, within a reasonable period of time,
assistance from an accessible and alternate provider
that is unobjectionable to the person on religious
grounds and that is at least equal in value to the aid
that would have been received from the religious
organization.
Employment Discrimination
The exemption under Civil Rights law of a religious No explicit provision, but a White House
organization from the ban on religious discrimination document takes the same position as H.R. 7
in employment is not affected by its receipt of funds (Protecting the Civil Rights and Religious Liberty
from a covered program.
of Faith-Based Organizations: Why Religious
Hiring Rights Must be Preserved). Also, by
revising Section 204 of a 1965 executive order
(No. 11246) EO 13279 permits a religious
organization to hire only co-religionists to
perform work under a procurement contract with
the federal government.
Religious Character and Independence
A religious organization that provides assistance Faith-based organizations should be eligible to
under a covered program has the right to retain its compete for federal financial assistance used to
autonomy from federal, state, and local governments, support social service programs without impairing
including its control over the definition, development, their independence, autonomy, expression, or
practice, and expression of its religious beliefs.
religious character.
Neither the federal government, nor a state or local A faith-based organization may provide federally
government with federal funds, may require a funded social services without removing or
religious organization to alter its form of internal altering religious art, icons, scripture, or other
governance or provisions in its charter documents; or symbols and may retain religious terms in its
to remove religious art, icons, scripture, or other organization’s name, select its board members on
symbols; or to change its name, because the symbols a religious basis, and include religious references
or name are religious, in order to be eligible to in its organizations’ mission statements and other
provide assistance under a covered program.
chartering or governing documents. However, it
may not use direct aid to support inherently
religious activities.
a. Current charitable choice laws apply to Temporary Assistance for Needy Families (TANF), food stamps,
Medicaid, Supplemental Security Income (SSI); the Community Services Block Grant, and substance
abuse treatment and prevention services under the Public Health Services Act.
b. Final regulations of the Departments of Agriculture, Justice, Housing and Urban Development, and
Veterans Affairs state that restrictions on use of federal funds for inherently religious activities do not
apply where indirect assistance is provided to religious organizations as a result of a genuine and
independent private choice of a beneficiary (for example, by use of a voucher or coupon).