Should Religious Organizations Continue To Receive Federal Grants For Social Service Programs?

Civil Rights Policy Brief #188 | By: | June 13, 2022

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Policy Summary

On August 31, 2021 H.R. 5129 was introduced in the House of Representatives. The bill was the Community Services Block Grant (CSBG) Modernization Act of 2022. This bill reauthorized a continued funding of the Community Services Block Grant Program which makes grants to States, territories, Indian tribes and other non – governmental entities for government programs to help reduce poverty, empower residents of low – income communities and encourage businesses and other organizations to expand opportunities for all individuals.  Included in organizations that are eligible for these grants are faith – based organizations (FBO).

However, the grant of taxpayer monies to faith – based organizations has been controversial. The Establishment Clause of the First Amendment to the U.S. Constitution provides “Congress shall make no law respecting an establishment of religion[.]” Due to the complications that were likely to develop with FBO’s receiving direct financial assistance from the states and the federal government in spite of a tradition that was supposed to keep church and state separate, a set of rules known as “Charitable Choice” rules were introduced in various statutes and regulations.

Generally, faith – based organizations ran government assistance programs and competed with other non – faith based groups for the award of government monies. The Charitable Choice rules helped to clarify the legal standards for an award of monies to an FBO. The rules required the government to neither favor nor oppose faith – based applicants and not interfere in the internal operations of religious organizations that receive federal funds. As a practical matter, if a beneficiary of a social service program did not want the assistance to be administered by a faith – based group, such as a church, the beneficiary was entitled to be reassigned to a secular organization, hence the “choice” of the Charitable Choice rules. A beneficiary would not be forced to attend a faith based group in order to receive the benefits of a social services program.

With H.R. 5129 just passed by the House, these Charitable Choice rules were suddenly omitted from the reauthorization of funds for the Community Services Block Grant Modernization Act of 2022. LEARN MORE

Policy Analysis

So what happened? Why was the framework of “Charitable Choice” rules omitted from the law that sought to continue the flow of federal monies to states and other institutions for social service programs?

One reason why the rules were likely left out is because of pressure from the ongoing debate in the U.S. concerning whether religious organizations and churches can rely on their faith and religious teachings to discriminate against other persons, such as LGBQT people. When faith – based organizations were awarded these grants to run social service assistance programs, there was an understanding that the monies would only be used to provide assistance in much the same manner that secular groups provide assistance. No monies would be used for worship, preaching or proselytizing activities, and most FBO’s did their best to comply.

President George W. Bush helped to clarify the standards used in granting the monies and helped streamline the process of awarding the monies through the creation of the White House Office of Faith Based & Community Initiatives. The Office conducted audits and helped train officials in the process of federal grant applications. But President Bush also made a key move by permitting only religious groups to use an exemption from Title VII of the Civil Rights Act of 1964. This exemption allowed religious groups to discriminate among persons because of their religious beliefs even though they were allowed to continue receiving federal funds. When President Barack Obama in 2014 classified sexual orientation and gender identity as a protected class for the purpose of anti – discrimination laws, a conflict with religious groups was set in motion.

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Should religious groups who receive taxpayer funds to help administer social service programs be permitted to discriminate against LGBQT groups while receiving those funds? While the Charitable Choice rules first implemented in 1996 seemingly made an accommodation for religious groups to receive taxpayer funds and administer social service programs, it appears that the Democrats in the House are looking to change that framework with H.R. 5129. Allowing a religious group to take federal dollars and then turn its back and discriminate against LGBQT groups will no longer be tolerated and may be coming to an end. Religious groups shouldn’t be able to have it both ways.

If a religious group wants federal dollars then it should be compelled to abide by the anti – discrimination laws that all other groups – secular, non – religious – have to follow. This is the message H.R. 5129 sent when it was passed – that the government will no longer distribute tax payer dollars to religious organizations that refuse to comply with its anti – discrimination laws. 

Religious groups may not like it but it seems pointless to continue sending taxpayer dollars to groups who refuse to discontinue their discrimination of other people. While H.R. 5129’s future is uncertain in the Senate it is clear that support for discrimination based on faith and religious reasons may be waning and H.R. 5129 could be the first step to do away with this religious based exemption for good. LEARN MORE

This brief was compiled by Rod Maggay. If you have comments or want to add the name of your organization to this brief, please contact

Engagement Resources​

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Freedom From Religion Foundation – non – profit’s group on the passage of H.R. 5129.

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Institutional Religious Freedom Alliance – history of Charitable Choice rules and how the government deals with federal funds for religious groups.

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