Government Funding, Religious Institutions and Religious Activities

Federal constitutional law regarding government funding and religious institutions and activities is complex and evolving. Beginning with the Supreme Court's 1947 decision in Everson v. Board of Education, the Court interpreted the Establishment Clause broadly to ban the flow of many types of governmental aid to religious institutions or for religious activities. The Court stated:

The "establishment of religion" clause of the First Amendment means at least this: Neither a state nor the Federal Government can set up a church. Neither can pass laws which aid one religion, aid all religions, or prefer one religion over another. Neither can force nor influence a person to go to or to remain away from church against his will or force him to profess a belief or disbelief in any religion. No person can be punished for entertaining or professing religious beliefs or disbeliefs, for church attendance or non-attendance. No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever form they may adopt to teach or practice religion. Neither a state nor the Federal Government can, openly or secretly, participate in the affairs of any religious organizations or groups and vice versa. In the words of Jefferson, the clause against establishment of religion by law was intended to erect "a wall of separation between church and State.

This basic approach characterized the Court's decisions for roughly the next thirty years.

One began to see a change in the Court's approach in the early to mid-1980s. For example, in 1983 a closely divided Court upheld a state law that allowed taxpayers, in computing their state income tax, to deduct expenses incurred in providing "tuition, textbooks and transportation" for their children attending an elementary or secondary school, including parents of children at private religious schools.

A major milestone in this movement was the Court's 2002 decision finding that the inclusion of religious elementary and secondary schools in certain voucher programs did not violate the federal Establishment Clause. This decision largely shifted the battleground over school vouchers from the federal constitution to various state constitutions, many of which have provisions that are stricter on these issues than is the federal constitution.

Another prominent debate over government funding and religion today is the debate over legal and policy questions surrounding President Bush's faith-based initiative. Some of those questions are: Will there be adequate secular alternatives for social service beneficiaries who choose not to go to a religious provider? Is it appropriate to allow government funds to be used for drug rehabilitation programs, for example, that rely on acceptance of the Christian gospel for rehabilitation? If a state constitution is stricter than the federal constitution on issues of government funding and religion, will the Supreme Court allow those more restrictive provisions to stand? Will beneficiaries who participate in government-funded social service programs be pressured to participate in religious activities?

One of the most hotly contested issues surrounding the faith-based initiative concerns employment discrimination. It is well-established that religious organizations may hire and fire on the basis of religion with regard to employee positions that they fund with their own money. This simply embodies the common-sense proposition that a Jewish synagogue may hire a rabbi as clergy leader rather than a Baptist minister. But the faith-based initiative allows a religious organization that receives government funds to make religion-based employment decisions regarding government-funded jobs. This part of the faith-based initiative has triggered a vigorous debate. For further information on the debate surrounding the faith-based initiative, see resources here [PDF], here [PDF] and here.

In addition to strictly legal questions, religious institutions that are considering seeking government aid should examine a host of other issues, such as: In what ways will the receipt of government aid change the program that the religious group wishes to offer? Is the religious group prepared to submit to governmental regulation and monitoring? Will the religious program become dependent on government aid and thus reluctant to criticize government policies for fear of losing the aid? Will the receipt of government funding create an expectation of loyalty to particular elected officials or particular political parties? Religious organizations should carefully study these issues (as well as the legal issues) before pursuing state aid.

© Center for Religion and Public Affairs 2006