Charitable Choice is the name given in the 1990s to innovative new principles to govern the award of government funds to religious organizations to provide social services. Previously, to avoid the establishment of religion, government officials were reluctant to provide government grants to organizations that were obviously or pronouncedly religious. The consequence was the exclusion of many religious organizations from the partnerships the government routinely entered into with private organizations.
Charitable Choice pioneered new rules for these partnerships. The Charitable Choice principles were enacted first as part of the 1996 welfare reform law, to govern spending by states of their TANF block grant funds. In 1998 Charitable Choice was added to the Community Services Block Grant program that provides funding to Community Action Agencies and for services they provide in low-income neighborhoods. In 2000, two separate laws added Charitable Choice to SAMHSA (Substance Abuse and Mental Health Administration) substance abuse funding. All of these bills were signed into law by President Bill Clinton.
Five Principles of Charitable Choice
Equal eligibility. Religious organizations, however religious they may be, are eligible for federal funding equally with secular organizations. In deciding which provider should get a contract or grant, officials must not be biased against religion and not biased for religion or for some particular religion. The only question is: which applicant will do the best job?
Protected religious identity. Religious organizations do not need to water-down their religious identity to be eligible for federal funds. Instead, the rules specifically protect their religious features. They can have a religious name and a religious mission. They can have imams or priests in the executive office and on the governing board. They can offer voluntary religious activities that they fund themselves, even when they also provide government-funded services. And the religious organizations can continue to hire based on religion even though they receive federal funds. Even if the federal program law forbids religious hiring, the faith-based organization can appeal to the federal Religious Freedom Restoration Act to continue its hiring practices, as the Obama administration acknowledged
Beneficiary protections. The organizations must not turn away eligible beneficiaries because of their religion or lack of it. The organizations must not compel beneficiaries to participate in religion. And beneficiaries must be offered an alternative if they object to a faith-based provider.
No direct payment for religion. Federal grant and contract funds—that is, “direct” funding—cannot pay for explicitly religious activities such as prayer, religious instruction, or proselytization, or for religious items like Bibles. An organization that offers religious activities on a voluntary basis has to keep the religion separate in time or location from the directly-funded services.
If choice, religion can be offered. Sometimes the federal funding comes to a faith-based provider in an “indirect” way—the government provides a scholarship or child-care certificate to the beneficiary and then the beneficiary chooses a provider. In this case, the faith-based organization can include religious activities and religious teaching as part of the federally funded services that it offers.
These principles govern the use of federal funds in particular programs and they follow the federal funds down to state and local governments that use federal dollars to help pay for the related state and local programs.
The George W. Bush administration promulgated Charitable Choice regulations for the several federal programs containing these legal requirements.
To guide those federal social service programs without Charitable Choice language, the Bush administration issued Equal Treatment regulations based on the Charitable Choice principles. These regulations apply to programs in many different federal agencies. The Equal Treatment regulations have been maintained, with some changes, through subsequent presidential administrations.