Keith J. Pavlischek
On August 22, 1996 President Clinton signed into the law "The
Personal Responsibility and Work Opportunity Reconciliation Act,"
thereby "ending welfare as we know it." Largely lost amidst
the public controversy over welfare reform, was the section of the
act with potentially landmark significance for church-state relations.
Section 104, commonly referred to as the "Charitable Choice"
provision, was a product of the larger movement to "devolve"
welfare responsibility to the states and to the institutions of
civil society. The motivation for the Charitable Choice provision
stemmed from the realization that faith-based service providers,
in particular, were often more successful in meeting the needs of
the poor than government agencies or even large bureaucratic nonprofit
The success of these faith-based service providers, however, stemmed
precisely from their refusal to separate the religious or "spiritual"
part of their ministry from the service rendered. Even so, such
organizations often have been unfairly disadvantaged in the competition
for service with "secular" agencies, or with those "religious"
agencies more willing to compromise their religious identity. And
often they have been subjected to the threat of lawsuits by church-state
watchdog agencies or welfare state bureaucrats. The charitable choice
section sought to mitigate this problem. According to Sen. John
Ashcroft, (R. Mo.) the primary promoter of the provision was "to
encourage faith-based organizations to expand their involvement
in the welfare reform effort by providing assurances that their
religious integrity would be protected." (Introduction to "A
Guide to Charitable Choice," p. v).
The Charitable Choice provision stipulates that states receiving
block grants for welfare assistance may not exclude religious service
providers from eligibility for subcontracts or vouchers on the grounds
that they are religious. The act includes several safeguards to
protect the religious character of organizations receiving indirect
or direct government assistance. The organization retains its independence
from Federal, State and local governments, including the organization's
control over "the definition, development, practice and expression
of its religious beliefs" (Section 104D(1)). Neither the Federal
or State government may require a religious organization to alter
its form of internal governance; it may not require it to remove
"religious art, icons, scripture or other symbols" from
its premises (Section 104(d)(2); and a participating religious organization
continues to be exempt from the discrimination prohibitions of Section
702 of the Civil Rights Act of 1964 (Section 104(f)), thus allowing
it to hire in accordance with the organization's religious convictions.
As long a the religious organization segregates the federal funds
it receives from its other accounts it is only subject to a limited
audit (Section 104(h)). And finally, a religious organization may
sue a state in state civil court if it believes its rights under
section 104 have been violated (Section 104(i)).
Congress anticipated that religious service providers could cooperate
with government assistance welfare efforts in two ways. The involvement
would be indirect if the state offers the individual beneficiary
certificates or vouchers for the delivery of service redeemable
at the participating organization. But Congress also anticipates
and intends that states will contract directly with religious providers
through purchase-of-service agreements.
While these safeguards reflect the goal of Charitable Choice to
involve faith-based providers in delivering welfare services "without
impairing the religious character of such organizations" [subsection
(b)], it also stipulates that "no funds provided directly to
institutions or organizations to provide services ... shall be expended
for sectarian worship, instruction, or proselytization." Faith-based
organizations that receive funds indirectly by means of vouchers
or certificates, however, are not subject to this restriction. Needless
to say, a state can only authorize a provider to redeem vouchers
if that organization, in fact, provides the authorized and stipulated
services for the needy. But under charitable choice an organization's
eligibility for funds disbursed through vouchers and certificates
does not take into account its religious character or whether or
not it is "pervasively sectarian."
Strict-separationists watchdog organizations and their judicial
camp followers have long held that the mere presence of religious
symbols and hiring on the basis of religious conviction is evidence
of an organization being "pervasively sectarian," and
that a general program of direct assistance unconstitutionally advances
religion if the organization is "pervasively sectarian."
One is not surprised to learn that the Charitable Choice provision
was actively opposed by the ACLU and other separationist watchdog
organizations-strong evidence that the provision was intended as
a direct assault on their interpretation of the establishment clause.
The distinction between direct and indirect funding and the permissibility
of the latter to religious organizations is fairly well established
in constitutional law, the most notable cases being Mueller v. Allen
(upholding a state income tax deduction for parents paying school
tuition), Witters v. Washington (upholding a state vocational rehabilitation
grant to use for training as a pastor), and Sobrest v. Catalina
Foothills School District (providing special education services
to a student attending Catholic high school permissible under the
establishment clause). Each of these decisions determined that "indirect"
aid was permissible under the Establishment Clause.
Yet these cases leave unresolved is the more interesting question
prompted by Charitable Choice: whether excluding religious providers
from a general program of either direct or indirect assistance would
violate the Free Exercise clause.
Current constitutional law suggests that neither the Establishment
clause nor the Free Exercise clause is triggered if a state decides
to provide assistance solely through government-operated agencies.
A state may decide, for instance, to permit indirect benefits to
be redeemed only at its own government-run welfare agencies. What
it cannot do, according to the Charitable Choice, and arguably according
to the Free Exercise clause, is adopt a program that involves the
independent sector but disqualifies participation by religious providers.
A recent case in the Sixth Circuit, Hartman v. Stone, suggests that
this is a promising judicial strategy against a state seeking to
exclude religious providers. The court held, citing Church of the
Lukumi Babalu v. City of Hialeah, that the U.S. Army violated the
Free Exercise clause when it excluded religious -but not secular-child
care providers from operating on its bases and receiving various
Somewhat more problematic may be a state's choice to cooperate
directly with a provider through purchase of service agreements.
The Act stipulates that none of the Federal funds transferred to
a provider may be "expended for sectarian worship, instruction
or proselytization" [Section j]. The $64,000 question is whether
this can be squared with the goal of the act to ensure that the
religious identity and autonomy of the provider is not compromised.
The problem is that many of the more effective service agencies,
most notably drug rehabilitation organizations such as Teen Challenge,
cannot so neatly segregate the "religious" aspects of
their programs (prayer, Bible reading and devotions, worship, etc.)
from the "secular" aspects, which in turn renders them
"pervasively sectarian" in the minds of some. If the above
stipulation is interpreted strictly it may undermine the very purpose
of the Act and discriminate against the most effective providers.
Establishment clause challenges to Charitable Choice will surely
be directed against these so-called "pervasively sectarian"
providers receiving direct funds. Even here, however, separationist
challenges will have to overcome the precedent of Bowen v. Kendrick.
In Bowen the Supreme Court narrowly (by a five to four margin)
upheld "on its face" the constitutionality of The Adolescent
Family Life Act (AFLA). AFLA authorized direct cash grants to both
governmental and independent nonprofit organizations for research
and services in the areas of teenage pregnancy and counseling of
adolescent sexual relations. The Act expressly invited participation
by religious organizations, to ensure that religious groups would
not be discriminated against when competing with similarly situated
grant recipients. Opponents claimed that the act violated the Establishment
clause, but the Court in Bowen rejected the argument in rather sweeping
terms: "Religious institutions need not be quarantined from
public benefits that are neutrally available to all," adding
that "this Court has never held that religious institutions
are disabled by the First Amendment from participating in publicly
sponsored welfare programs."
The Court then proceeded to apply the infamous three-prong test
of Lemon v. Kurtzman. Of critical significance was that the majority
refused to hold that faith-based counseling centers were necessarily
"pervasively sectarian." Moreover, while AFLA did not
expressly bar the use of federal funds for worship, prayer, proselytizing
and other explicitly religious activities, the Court said that no
explicit bar was required and added that "clearly, if there
were such a provision in this statute, it would be easier to conclude
that the statute on its face" was constitutional. Since the
Charitable Choice provision does include that bar (and was probably
written to address the Court's concern in Bowen v. Kendrick), it
would seem a fortiori that Section 104 is sufficiently similar,
indeed is more cautious than Bowen and is thus also constitutional
on its face.
Simply by dividing the analysis between "facial" and
"applied" components in Bowen, the Court put strict separationists
on the defensive. As long as the Court was willing to overturn legislation
at the mere risk that the second and third prong of Lemon (the primary
effect of a law shall not advance religion and shall not involve
excessive entanglement between religion and government) were violated,
activists could "rove the country filing suits claiming Establishment
Clause transgressions." Strict separationists sought to halt
all aid not merely on a piecemeal basis but by enjoining the entire
Act insofar as it allowed any participation by religiously-based
providers. But after Bowen v. Kendrick, "a violation of the
Establishment Clause must be proved in each case by palpable evidence
that confessional religion is being advanced. The only exception
occurs when the entire class of religious service providers is pervasively
sectarian. Because not all faith-based social service providers
are pervasively sectarian, a facial attack will fail."
But that, of course, leaves open the possibility that in certain
cases a social service provider will be ineligible for funds because
it is found to be "pervasively sectarian." It is here
that the final nail should be put into the coffin of the strict
separationists. The entire idea of distinguishing between organizations
that are "pervasively sectarian" and those that are not
should be put to rest once and for all.
The strict separationists should be hoist on their own petard,
or "prong" as it were. To require government officials
to distinguish between, say, a faith-based drug counseling center
that is "pervasively sectarian" and one that is not, inevitably
entangles them in discerning the religious character of faith-based
providers. And that, of course, is prohibited by the third prong
An even more aggressive attack against the strict separationists,
following the lead of Richard Baer, would demonstrate that the Supreme
Court's use of the term "sectarian" is itself discriminatory,
a euphemism for rhetorically more loaded terms like "bigoted,"
"narrow-minded," "heretical," "parochial"
or "dogmatic," always with the implication that there
exists a non-sectarian "mainstream," a right way of thinking
and a common position to which all rational persons should subscribe.
The term "sectarian," in other words, is essentially used
as the rhetorical equivalent of a racial or ethnic slur, a use that
to which objection should henceforth be raised.
The Charitable Choice provision provides the opportunity for the
advocates of a more responsible understanding of the religion clauses
to move from playing defense (against the offense of the strict
separationists) on the playing field of the Establishment clause,
to the offensive on the playing field of the Free Exercise clause.
To allow faith-based service providers to compete for public funds
with secular providers on an equitable basis, and to allow "pervasively
sectarian" providers to compete with so-called non-sectarian
religious providers is not only permissible under the Establishment
clause, but should be required under the Free Exercise clause. If
we say that the Free Exercise clause is violated when religious
providers are excluded from a generally applicable program for a
legitimate public purpose when the funds flow indirectly to providers,
so too is the Free Exercise clause violated when the benefits flow
directly. If a certain program is to be funded which the legislature
decides it is of public benefit to society and is conducive to the
common good and a nonreligious organization is eligible for these
public funds, then a religiously based program should be eligible
as well. To deny them that chance is simply governmentally-supported
discrimination. If "free Exercise" doesn't prohibit that,
it is hard to understand how it can mean anything at all.
A Brief Bibliography Related to Charitable
For a very helpful handbook on the issue of Charitable Choice in
a very accessible question and answer format (and a forward by Sen.
Ashcroft) see, A Guide To Charitable Choice: The Rules of Section
104 of the 1996 Federal Welfare Law Governing State Cooperation
with Faith-based Social-Service Providers (The Center for Public
Justice and The Christian Legal Society's Center for Law and Religious
Freedom, 1997), and Carl H. Esbeck, "The Regulation of Religious
Organizations as Recipients of Governmental Assistance" (Center
for Public Justice, 1996). Both are available from The Center for
Public Justice, P.O. Box 48368, Washington, DC 20002-0368, (410)
For a rather predictable separationist criticism of Charitable
Choice provision see Derek H. Davis, "The Church-State Implications
of the New Welfare Reform Law" in 38 Journal of Church and
State 719 (Autumn1996). For a constitutional defense of the provision
see: Carl H. Esbeck, "A Constitutional Case for Governmental
Cooperation with Faith-Based Social Service Providers, with responses
by Douglas Laycock and John Garvey, in 46 Emory Law Journal (Winter,
Stephen V. Monsma's When Sacred and Secular Mix: Religious Nonprofit
Organizations and Public Money (Rowan & Littlefield, 1996) is
a pathbreaking study of the religious nonprofit sector and the implications
for church-state jurisprudence. For my favorable review of the book,
see "At the Border of Church and State" in 72 First Things
47 (April, 1997).
For a fine article outlining the initial mainline and liberal church
reaction to welfare reform, particularly their opposition to charitable
choice see: Stanley Carlson-Thies "'Don't Look to Us': The
Negative Responses of the Churches to Welfare Reform" The Notre
Dame Journal of Law, Ethics and Public Policy (forthcoming). Finally,
as the title suggests, Richard A. Baer's "The Supreme Court's
Discriminatory use of the Term 'Sectarian'" in 6 The Journal
of Law and Politics 449 (Spring 1990) is a spirited attack on the
use of the term sectarian to marginalize individuals and groups
with strong religious conviction.