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Home > Research Library > The Business of Giving > Accepting Gifts > Government Subsidies

Government Subsidies

Should churches accept money from the government to do “non-proselytizing” good works? While some believe that church and state should be completely separate, others accept the idea of the government subsidizing religious charities that serve the common good. With President Bush’s Office of Faith-Based and Community Initiatives making public funds easier for ministries to obtain, the debate surrounding state subsidies has flourished. The following articles and papers present opposing and supporting views on government funding for religious activity.


Articles and Papers

A Public Funding Success Story
Joe Loconte. Christian Management Report 25, no. 3 (May/June 2001).
Ed Morgan’s Transition Center for homeless men, a ministry of the Christian Bowery Mission in New York, demonstrates that it is possible for religious groups to accept government funding for social ministries while maintaining their Christian witness. Morgan created the center as a separate entity from the Christian Bowery Mission, agreeing not to require participation in any religious activities. Faith plays a quiet part in this program through optional Bible studies and free Bibles purchased with private money. As New York City’s program with the best record for guiding homeless addicts off government assistance, the Transition Center is a model for the balance of the sacred and secular in Christian ministries using public funding. Note: No downloadable text or audio is available at this time.

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Building a Consensus on Public Funding: Walking through the Minefields of Faith-Based Initiatives
Edward H. Morgan. Christian Management Report 25, no. 3 (May/June 2001).
In 2001, President Bush established the White House Office of Faith-Based and Community Initiatives, opening the discussion among faith-based organizations of whether to accept government funding. While some completely refuse to accept public money and others freely accept it without regard for the consequences, the writer offers a middle ground. He has found that the key to using public funds is to design a separate, custom program that balances public funding requirements and the fulfillment of kingdom goals. Morgan demonstrates that it is possible to use public funds in a discerning way that is consistent with his Christian faith, thereby creating opportunities to start new ministries and share the love of Christ. Note: No downloadable text or audio is available at this time.

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Manna from D.C. Boosts Charities: Faith-Based Groups Meet Secular Needs
Mary Leonard. The Boston Globe, December 1, 2003.
In 2002, the Black Ministerial Alliance of Greater Boston was selected by the faith-based efforts of President Bush’s Compassion Capital Fund to receive a $2 million grant toward building up churches and community groups that serve at-risk youth. This is the first time that the BMA has received any kind of public money, and the grant represents nearly twice its annual budget. But the grant should not be seen as an effort in underwriting a religious agenda but, rather, as a way of meeting social and community needs through religious channels. Executive director Harold Sparrow says that a key part of the grant agreement is that while a religious group is the main recipient of the grant, the federal money must not go toward proselytizing, pastoral services or religious materials. The goal of the faith-based initiative is to meet social needs through religious organizations, not to promote specific religious teaching. The new grant will benefit many Boston youth, but it will certainly also encourage fresh thinking on the part of ministry leaders as to what their part is in serving their communities holistically.

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Reagan’s Policies Bolstered Philanthropy Despite Protests from Nonprofit Officials
Leslie Lenkowsky. The Chronicle of Philanthropy, June 24, 2004.
The economic policies of the Ronald Reagan administration encountered considerable resistance because they prescribed decreasing government involvement with nonprofit organizations. Many nonprofits complained that they were dependent on the government for grants and, furthermore, that decreased government involvement meant increased privatization of nonprofits, which would jeopardize their functioning as nonprofit agencies. The author of this article states that “twenty years later, it is hard to understand what all the fuss was about.” He argues that Reagan’s policies did not take away grants from the nonprofit organizations that depended on them but, rather, merely made them work harder and be more responsible in order to get them, which, in turn, has ultimately caused the entire nonprofit sector to function more effectively.

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Report Recommends 38 Ways to Expand the Role of Religious Charities
Grant Williams. The Chronicle of Philanthropy, May 1, 2003.
A bipartisan committee released a report listing 38 recommendations that it says governments, foundations, individual donors and others could follow to expand and strengthen the role of religious and local organizations in providing social services to needy Americans. Among other things, the report, titled Harnessing Civic and Faith-Based Power to Fight Poverty, analyzes controversial issues under debate in Congress, such as whether religious groups that receive government contracts can follow their religious views when hiring; assesses the responsibilities of government agencies and religious organizations that seek to work together; and urges increased “public and private funding of faith-based groups in ways that are both effective and constitutional.”

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Faith Groups Approach ‘Charitable Choice’ Cautiously
Committee on Public Mission of the American Baptist Churches of New Jersey. Publinc, October 2000.

Religious organizations face a serious temptation in America today—accepting government money. Although churches have long been allowed to create separate nonprofit groups that provide secular social services with tax funds, under “charitable choice” churches, not just separate entities, can receive tax funds. While tax funds typically bring regulation, such as a prohibition against religious discrimination in hiring, “charitable choice” seeks to exempt religious groups that use tax funds from such regulations. According to American United for Separation of Church and State, for the first time in history, federal law specifically states that houses of worship can accept taxpayer funding to provide social services, supposedly without watering down their religious identities. But, we must ask ourselves, is this possible? It sounds too good to be true.

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Faith-Based or Funding-Based? The Effect of Secular Funds on Sacred Missions
Attica Scott. Metro Pulse, May 3, 2001.

Places of worship have been and continue to be meeting places for social change and social justice organizations. Will that change with churches accepting money from our federal government? This article raises several concerns about churches accepting federal funding. Perhaps federal funding will limit the religious work of these institutions. A faith-based institution can write a grant for and receive AmeriCorps workers, but the workers cannot do faith work. Another concern of the author is that once our churches begin receiving federal funding, they might become more numbers-focused for the sake of future funding.

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Should Church Do Funding with Government Funding?
Peter Larom, Robert Betts and Wendell Gibbs. Episcopal Life, May 2001.

The question of whether or not the church should accept government funds in order to do ministry is not an easily answered one. Even when limiting answers to the clergy, the answers will differ greatly, as this survey of three Episcopal priest will show. Peter Larom, executive director of the Seamen’s Church Institute of New York and New Jersey, believes on the basis of past testimonies and experiences that the church has every right to accept secular funds; much of God’s work is accomplished through secular funding. Robert Betts, director of Episcopal Community Services in Philadelphia, straddles the fence as he argues that good boundaries make good partners. And Wendell N. Gibbs, Jr., bishop of the Diocese of Michigan, holds that the church must work for Christ and not for the government.

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White House Plans Seminars to Help Religious Groups Win Federal Aid
Ian Wilhelm. The Chronicle of Philanthropy, September 19, 2002.
With a proposal to benefit religious charities stalled in Congress, the White House plans to hold five free information seminars to help sectarian groups win federal contracts for social services. The one-day conferences are designed to teach small religious and secular nonprofit groups how to apply for grants from five federal departments: Education, Health and Human Services, Housing and Urban Development, Justice, and Labor. The White House seminars could fill a critical need by helping small nonprofit groups increase their ability to receive federal grants.

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A Leap of Faith: Bush’s Executive Order Loosens Federal Restraints on Religious Charities
Ian Wilhelm and Grant Williams. The Chronicle of Philanthropy, January 9, 2003.
President Bush’s decision last month to order the federal government to loosen restraints on religious charities that seek and obtain federal money means that Bush has accomplished with the stroke of a pen much of what Congress has balked at giving him over the past two years. Most controversial is the president’s step to allow groups that receive federal contracts to follow their religious views when they make hiring decisions—what critics brand as discrimination.

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Making Grants on Faith: Congress Expected to Debate Plan to Aid Religious Charities
Debra E. Blum. The Chronicle of Philanthropy, December 12, 2002.
As the new, Republican-led Congress begins next month, one issue expected to be high on the agenda is President Bush's plan to make it easier for religious charities to compete for federal grants. Previous attempts to pass such legislation stalled this year after some Democrats in the Senate raised concerns about the way religious groups would spend the money. Among the contentious issues: whether faith-based recipients of federal money can refuse to hire people who don’t hold their religious views.

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U.S. Secretary of Labor Elaine L. Chao Awards First Federal Grants Available to Faith-Based and Grassroots Organizations: New Approach Helps Displaced American Workers Find Good Jobs
Elissa Pruett. U.S. Department of Labor, Office of Public Affairs. News Release, July 1, 2002.
The U.S. Department of Labor awarded the first three sets of grants specifically designed to link faith-based and grassroots community organizations to the nation’s One-Stop Career System. $17.5 million has been awarded to 12 states and 29 organizations around the country. The grants are the first group to be awarded by any federal department. Grantees and the amounts to be received are listed.

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State Budget Woes Imperil Financial Future of Many Nonprofit Groups
David Whelan. The Chronicle of Philanthropy, August 8, 2002.
From dance troupes to food pantries, charities across the nation are receiving bad news—or the threat of it—from state governments that have supported them in the past. This fiscal year, states will run an estimated aggregate deficit of $58 billion, according to the National Conference of State Legislatures. To deal with the growing state-budget trouble, many nonprofit groups are trying to ferret out new sources of revenue, laying off workers, scuttling programs, and dedicating more resources to political advocacy in a bid to salvage as much government support as possible.

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Corrupting Charity: Why Government Should Not Fund Faith-Based Charities
Michael Tanner. Cato Institute Briefing Papers, No. 62, March 22, 2001.
President George W. Bush has proposed that faith-based charities be made eligible to receive billions of dollars in federal grants to provide social services. But doing so risks mixing government and charity in a way that could undermine the very things that have made private charity so effective, the author argues. Government dollars come with strings attached: Charities that accept government funds could find themselves overwhelmed with paperwork and subject to a host of federal regulations. The potential for government meddling is tremendous. As they became increasingly dependent on government money, faith-based charities could find their missions shifting, their religious character lost, the very things that made them so successful destroyed. Most important, the whole idea of charity could become subtly corrupted; the difference between the welfare state and true charity could be blurred.

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Know Us by Our Works: Give Faith a Chance to Solve Society’s Problems
John J. DiIulio, Jr. The Wall Street Journal, February 14, 2001.
The first director of President Bush’s new White House Office of Faith-Based and Community Initiatives responds to early criticism of the Bush agenda for faith-based solutions to social ills. The office’s purpose is certainly not to “fund religion” but, rather, to undertake a series of concrete objectives: to increase charitable giving, to end discrimination against faith-based social service providers, and to research and mobilize support for such grassroots organizations. Critics allege that DiIulio and Bush are blurring the line between church and state, and that such a program will result in either tax-subsidized proselytizing, or the secularization of faith-based groups, or both. DiIulio’s office, he declares, will be guided by facts, performance and results, not by faith, religion or politics.

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Churches, Charities Encourage Taxpayers to Give Caesar's Rebate to Godly Causes: Christians Urged to Consider Donating to Areas They Wish Received More Government Funding
LaTonya Taylor. Christianity Today, September 24, 2001.
As taxpayers receive $38 billion in rebate checks this year, churches and charities with a generally liberal political stance have started a grassroots movement of Web sites, word of mouth, and the occasional op-ed piece to encourage people to do good works with Caesar's cash.

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Faith, Hope, and Philanthropy: The President's Initiative
Suzanne E. Coffman. Philanthropic Research, July 2001.
Although the fate of the president’s proposal remains in doubt, his initiative has brought philanthropy—particularly secular and religious social-service organizations—into the limelight. Perhaps, as House Judiciary chairman F. James Sensenbrenner, Jr. (R-Wis.) told Vice President Dick Cheney, the administration did indeed fail to do “its homework broadening its base so that it had broad bipartisan support” for the plan. Or perhaps Murray Friedman of Temple University is right when he says that the debate merely reflects “the growing pains of a new idea.”

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The State of the Faith-Based Initiative
Ted Olsen. Christianity Today, January 28, 2002.
One year after Bush outlined his plan to let religious social-service groups compete for government funds, little has actually made it through Congress. Though the House has passed a faith-based initiatives bill, the Senate is stalling. Are the Senate and White House letting the faith-based initiative die a quiet death?

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