What is Charitable Choice?Religious organizations have long been involved in provision of services to the communities they live in and work in. Religious organizations working as government subcontractors are not new. Catholic Charities , Lutheran Social Services, the Salvation Army , and the Jewish Welfare Federation have long been indispensable sources of social aid. For almost 40 years there have been collaborative service agreements between the government and sectarian organizations. Catholic Charities, United Jewish Communities and others who have provided welfare services, maintained proper procedures in accounting to ensure the separation of church and state/federal funding. These religious organizations put in place safeguards to protect the integrity of the religious organization, as well as the interests of state/federal taxpayers. These religious organizations did not contract directly with the government; rather, religious institutions created separate entities (usually 501(c)(3) organizations) to handle public funds, and they did not incorporate religion into the publicly-funded program. For large religious organizations, such as Catholic Charities U.S.A., the government money has been a large or even major portion of their budget.
The new Faith-based initiatives paved the way for a political system which delegates social welfare responsibilities to newly-affiliated organizations (some from the religious right) with which it forges privatized partnerships. The strategy redistributes federal funding for social services from government functions where accountability had been fairly established and allocates funds to newer programs expected to bridge gaps in service/funds by being more cost-effective. This places a greater burden on the former, established Faith-based community to become competitive bidders for their programs, increasingly subject to changes and cuts in government funding.
There is criticism that the proponents of new public-religious partnerships may be motivated by something other than a desire better to meet the social service needs of the country. This debate has been partially driven by political and ideological concerns beyond the desire to help the poor. These concerns persist, notwithstanding the fact that improving social service provision is the public justification offered by former President Bush’s for charitable choice partnerships with pervasively sectarian organizations.
Charitable Choice was introduced during the mid-1990s after congressional committees devised alternate ways to address the burdensome welfare system. The Charitable Choice laws applied to four Federal programs: Temporary Assistance to Needy Families (TANF) and the Community Services Block Grant (CSBG) programs (both overseen by the Administration for Children and Families at the United States Department of Health and Human Services (HHS)); programs for substance abuse and mental health (overseen by the Substance Abuse and Mental Health Services Administration (SAMHSA) at HHS); and the Welfare-to-Work program (overseen by the Department of Labor).
It is viewed with concern by some who fear that it will end public provision of social services and a welfare support system that many Americans in need depend on. Charitable Choice strategy success requires that non-government social service providers will find the social services demand possible to meet. The increased burden of government regulation and competing demands for a charitable organization’s resources might cause mission displacement and have a negative impact on congregations. A new dependence on government funds could result in decreased donations given to the charitable organization based on the presumed receipt of public funds. Public perception is not necessarily in sync with legislative intent. The premise behind Charitable Choice is that it relies on the market model with an emphasis on customers rather than citizens. The goals of a democratic government are more than to simply respond to its citizens as customers. There can be a potential for religious bias or discrimination by particular Faith-based contractors against needy citizen-clients who do not share common beliefs. There could also be bias in the grant of government contracts because effective oversight is difficult given the many different players at various levels of government.
Many civil rights watchdog organizations warned that Charitable Choice blurred the boundaries between church and state. Faith-based initiatives were policies based on concepts of fiscal conservatism, decreased size of the federal government, facilitated collaboration and cooperation in forged partnership with the religious community. Thus, through this new legislative policy, Charitable Choice authorized a change for the way in which the church and state interact. Conservatives find these Faith-based initiatives appealing because they want to decrease the size of government. They see the initiatives as an inexpensive alternative to government-sponsored social services. Cuts in government funding result in a greater burden placed on the Faith-based community to take up the slack.
The Charitable Choice concepts of indirect funding and neutrality principle appear to promote a “black hole” for federal funds due to little transparency or oversight and little accountability to the taxpayer. When private contractors are religious institutions they can claim constitutional protection against interference with free exercise of their religion. The law currently exempts houses of worship from the full financial disclosure that is required from other non-profits when they are given tax-exempt status. Thus when a church or religious institution receives public money to run welfare-to-work programs, it may legally assert a right to religious liberty and thus resist disclosing its financial records. This may limit transparency regarding the dispersal of tax money to contracted service program providers and the government’s ability to assure honesty in provision of government contracted services. A religious provider of job counseling, for example, could demand enough latitude to include prayer or Bible study in its programs, even if the government is directly contracting for the services. Thus the government might be viewed as endorsing those religious practices, establishing them, or even coercing individuals in dire straits to engage in a particular religious practice.
The Charitable Choice program has been accused of giving preferential advantage to certain faith groups and endorsed them to receive federal grants. Constitutional concerns were raised in 2002 when President Bush issued Executive Order 13279, which facilitated churches and other Faith-based organizations to receive federal money by circumventing anti-discrimination laws. This opened the door to bias in employment practices and service provision by Faith-based and Community Initiative programs paid for with Charitable Choice funding. The Coalition Against Religious Discrimination (CARD) warned that possible proselytism when federal funds are used could violate the First Amendment related to church-state relations. Many scholars believe that direct funding would compromise the religious rights of recipients, encourage intense competition among America's religions, create a divisive political and legal battle over whether government funds should ever pay for programs that discriminate in whom they hire, and harm religious entities by restricting their autonomy. Because of the lack of good options of social welfare programs in all areas, publicly funded vouchers may pressure people into religious activities that they would otherwise not choose.
Privatization of welfare – due process & constitutional concerns In concert with diminished regulation over programs, the social safety net is vulnerable to exploitation. Providing the safety net is a core public function which should remain responsive to democratic principles and accountable to elected officials. Although the government can contract out services, it cannot contract out the function of governing.
This privatization of welfare services leads to lack of adequate oversight in many jurisdictions when the organization that obtains the government grant subcontracts services to others, including private businesses. Thus, for-profit companies can be the entities that actually provide the in-field services. There is no provision for financial or service-quality oversight. In theory, the contractors should police themselves and their subcontractors, but there is little profit incentive to do proper oversight.
President George W. Bush’s Faith-based initiative intended to reduce the size of government, but not necessarily the amount spent. His applied method shifted the responsibility for delivery of numerous social services from government agencies to newly-recognized, Faith-based organizations. Privatization of welfare by delegation to contractors and subcontractors for service provision raises due process and accountability issues. Welfare programs involve provision of adequate food, adequate clothing, adequate shelter, and minimal preventive public health care. Although the government has been viewed as the most obvious provider of these programs, faith-based programs have also frequently provided services to those in need. But the government, which is elected and accountable to the citizenry, still accepts responsibility and accountability to see that social justice prevails and a decent chance at a reasonably healthy and active life can be provided for all citizens.
In 1997, the Texas Supreme Court developed a test to evaluate the efficacy of delegation to private parties. These guidelines are used to frame decisions about the scope of authority, accountability to the public and to federal authorities. They identify the requisite expertise that qualifies a private entity to be a contractor.
There is concern that private entities which contract to provide welfare services are not governed by constitutional constraints. In other words, if a private contract provider of social services commits a wrongful action, the wronged person cannot invoke constitutional protections.
The legal doctrine that defines “State Action” determines that a person who is a government actor and commits a wrongful act is subject to constitutional constraints. State government and federal employees are clearly government actors, but private entities usually are not. With government privatization contracts, authorization is transferred to private entities, but not “state actor” obligations. Liability for actions is effectively diminished. Privatization of contracts for welfare services permits autonomy without supervision or legal accountability. Although there may be statutes in state or federal law that give the wronged person the opportunity to receive notice and obtain a hearing, these laws are generally not enforceable. The courts have held that, unless there is a specific provision for enforcement, there will be no enforcement of these procedural rights. The wronged person can sue under the third-party beneficiary principle - to compel compliance with the terms of the contract between the government and the private entity, but this is rarely successful.
Contracts are often drawn up with the simple insertion of a provision in the contract that bars third-part lawsuits. Social service recipients are largely at the mercy of the political process to grant legal protection entitlements and due process rights. They are also at the mercy of contracted parties to define and/or grant them contractual rights.
Despite these constitutional and due process concerns, an increased number of government services are contracted out to private providers, which leaves clients with little or no recourse if their constitutional rights are violated. Privatization may, in reality, simply replace a government bureaucracy with a private monopoly. Most persons who oppose privatization are concerned about the negative outcomes it makes very possible.
There is a human dimension to quality social services that is difficult to protect in an unregulated contractual arrangement. To relegate sensitive decisions to private organizations and companies that use market-based models is potentially a risk that is under-appreciated for its implications. Critical decisions that affect our society’s most vulnerable citizens can become based on short-term private incentives rather than long-term public interests. Government authority may be unable to scrutinize the work of private entities adequately because of budgetary restrictions or unfamiliarity with contract management. The lack of oversight could mean that the public is not assured that tax dollars awarded to government contractors will yield a privatized service that performs adequately.
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 repealed Aid to Families with Dependent Children (AFDC), the federal cash assistance program, and replaced it with Temporary Assistance for Needy Families (TANF), a cash assistance program primarily operated by the individual states. Prior to PRWORA, determination of which applicants qualified for federal benefits was performed by a public agency staff in civil service. (Title I, Section 104) Under the new 1996 law, however, TANF eligibility in Florida and Texas was contracted out to private organizations which were not directly accountable to public authority.
Privatization can be undermined by corruption if lucrative contracts are awarded to political allies, relatives or friends of public officials. Many of these contractors are not qualified for the work or may cut corners to expand profits, especially when oversight is limited. Contractors have been found to commit fraudulent and illegal practices, including:
• bid-rigging (arranges bids to be submitted by selected firms to limit real competition);
• low-ball bids (sets bids artificially low to win contracts, then subsequently raises fees excessively through tactics such as change orders);
• over-billing (charge too much, or charge for work not done).
These practices are difficult to prove, to monitor for and to investigate.
Texas and Florida privatized functions to qualify clients for public benefits. They closed public offices and set up call centers that use 2-1-1 information lines. Staff employed by private contractors took initial client applications by telephone and if eligible, sent them to a public agency for final certification. Private contractors employed by corporations determined whether an application was submitted to a public agency. Access to benefits under this system can be manipulated to maximize profit or can be awarded in a biased way. The privatization of welfare eligibility determination, including food stamp and Medicaid coverage, represents a fundamental shift in delivery of social support to low-income populations. Large, for-profit corporations may have strong financial incentives to either turn away recipients or provide them with inadequate services. Freedom of information and open records acts do not apply to private contractors. This makes it difficult to determine how public funds were spent.
The use of subcontractors or outsourcing has often been used to abdicate social and moral responsibility. There are significant legal, political and economic advantages to the perpetrator of human rights abuses, of using subcontractors, because it ultimately helps obscure the relationship between the perpetrator and the actual act. It is a politically valuable device, because even if abuses are exposed, it will frequently look as if someone else (the contractor) was responsible. This ultimately makes it difficult to hold a violator legally accountable and to be able to apply appropriate sanctions. Thus the very effective human rights tactic of public shaming, in these circumstances, often becomes ineffective. Outsourcing to contractors permits the perpetrators to ignore the societal norms and to conceal the perpetrators breach of those norms. In addition, it legally protects perpetrators from both legal prosecution and embarrassment. Subcontracting to corporations providing services such as prisons, healthcare and the military are particularly problematic, as in these settings there is reduced transparency to the public and less scrutiny by law enforcement. Transnational corporations have enormous political and financial influence and power. Health maintenance organizations and prisons use cost cutting methods which include using insufficiently trained, underpaid and over worked employees. Rapid employee training and high turnover can lead to inadequate services in residential treatment centers, prisons, and other facilities. When operated as a for profit business, cost reductions can lead to inadequate care, lack of adequate programming and abuse. Outsourcing allows the perpetrator to not just abdicate responsibility but also assists the aggressor in maintaining a respectable public persona in the public eye. This often amounts to abuse of state-sanctioned power and authority. Often outsourcing is presented to the public as necessary to cut costs. The use of subcontractors makes it more difficult to determine who is responsible for abuses and these cases are very complex.
References and citations: In fact, in the United States, seven of the largest religiously affiliated entities serve more than sixty million people with social services. Religiously affiliated entities tend to provide a wide range of social services comparable to those provided by government social service agencies. Many are professionally accredited through the Council on Accreditation of Services for Families and Children, Inc. Thus, they are held to the same standards as secular organizations. See John McCarthy & Jim Castelli, “Nonprofit sector research fund, religion- sponsored social service providers: the not-so-independent sector” (Aspen Inst., Working Paper No. WP98-02, 1998); see also Michael W. McConnell, “ Religious Freedom at a Crossroads,” 59 U. CHI. L. REV. 115, 183 (1992); Ronald Thiemann et al., “Responsibilities and Risks for Faith-Based Organizations, in Who will provide? The changing role of religion in American social welfare” 51-70 (Mary Jo Bane et al. eds., 2000).
Catholic Charities USA, “Who We Are,”
http://www.catholiccharitiesusa.org/who/ index.htm.
The U.S. Salvation Army received thirteen percent of its fiscal year 200I funds from the government. Salvation Army USA Nat'l Headquarters, Annual Report (200I), available at
http://www.salvationarmyusa.org.
In 200I, United Jewish Communities received a federal grant of $59,868,000. CBBB Wise Giving Alliance, Charity Report United Jewish Communities (2002), available at
http://www.give. org/reports/care2_dyn.asp. “United Jewish Communities, About Us,” at
http://www. ujc.org/aboutus_home.html.
"Catholic Charities USA is the nation's largest, private network of social service organizations with I,400 local agencies and institutions providing essential services to more than 9.5 million people annually, regardless of their religious, racial, ethnic, or economic background." Letter from Catholic Charities USA to Senate and House Budget Committees (Feb. 26, 2000), at
http://www.catholiccharities usa.org/programs/Advocacy/letters/Letters2001/budget1.htm.
Charitable Choice Funds, MissouriNet.com, http:/
http://www.missourinet.com/2010/12/23/c ... wer-audio/.
Sager, Rebecca, “Faith, Politics, and Power,” The Politics of Faith-Based Initiatives, Oxford University Press, 2010, TheDivineConspiracy.org,
http://www.thedivineconspiracy.org/Z5242W.pdf.
Stevenson, Dru, “Privatized Welfare and the Nondelegation Doctrine,” 35 Clearinghouse Rev. 546 (2001-2002) Jan-Feb 2002.
http://heinonline.org/HOL/LandingPage?c ... 4&id=&page.
Gedicks, Frederick Mark, “A two-track theory of the establishment clause,”
Establishment Clause doctrine has long been informed by two mutually antagonistic values: the separation of church and state, and government neutrality with respect to religion. There are conflicting values of both separation and neutrality which co-exist. The Speech Clause doctrine provides an absolute minimum of constitutional protection for expression against even content-neutral regulation, so also Establishment Clause doctrine provides for an absolute minimum of church-state separation against even religiously neutral government action. The Establishment Clause has long been thought to protect two values, the separation of religion and government from each other, and government neutrality with respect to religion. Separation requires that religion and government each refrain from involving itself in the affairs of the other. (Everson v. Board of Education). Neutrality has not totally eclipsed separation, which is the more fundamental Establishment Clause value. Neutrality requires that government regulate its interactions with religious individuals and institutions so that it neither encourages nor discourages religious beliefs or practices. (Epperson v. Arkansas).
http://www.bc.edu/bc_org/avp/law/lwsch/ ... 03_FMS.htm.
Minow, Martha, “Public and Private Partnerships: Accounting for the New Religion,” 116 Harvard Law Review. 1229, 1232-33 (2003).
The Coalition Against Religious Discrimination (CARD) opposes charitable choice as an unconstitutional and dangerous proposal that will harm religion, authorize government-funded discrimination, undermine the accountability of taxpayer dollars, foster litigation against state and local governments, and violate the personal religious rights of Americans seeking help. See Coalition Against Religious Discrimination, What Is "Charitable Choice"?, at
http://www.stop religiousdiscrimination.org/what is_charitable_choice.html. CARD includes many religious and nonreligious nonprofit organizations such as American Baptist Churches, USA; American Civil Liberties Union; American Jewish Committee; American Jewish Congress; Americans United for Separation of Church and State; Baptist Joint Committee on Public Affairs; Catholics for a Free Choice; Central Conference of American Rabbis; Friends Committee on National Legislation; Jewish Council for Public Affairs; Jewish Women International; NARAL Pro-Choice America; National Association for the Advancement of Colored People; National Association of Alcoholism and Drug Abuse Counselors; National Association of Social Workers; National Council of Jewish Women; National Education Association; National Gay and Lesbian Task Force; National Organization for Women; National Parent-Teacher Association; National Partnership for Women and Families; National Women's Law Center; People For the American Way; Planned Parenthood Federation of America; Rabbinical Assembly; Service Employees International Union, AFL-CIO; The Interfaith Alliance; Union of American Hebrew Congregations; Unitarian Universalist Association; United Church of Christ (Justice and Witness Ministries); and United Methodist Church (General Board of Church and Society). Coalition Against Religious Discrimination, About C.A.R.D., at
http://www.stopreligiousdiscrimination. org/about_CARD.html. More than 850 religious leaders signed a petition organized by CARD urging President Bush and Congress to reject charitable choice propos- als, explaining that the "flow of government dollars and the accountability for how those funds are used will inevitably undermine the independence and integrity of houses of worship." Coali- tion Against Religious Discrimination, An Open Letter to President Bush and Congress from America's Clergy (June 14, 2001),
http://www.stopreligiousdiscrimination. ... rom_clergy. pdf; see also Press Release, Americans United, Religious Leaders Urge Bush, Congress To Reject "Faith-Based" Funding Proposals That Allow Discrimination, Entangle Religion and State” (Apr. 24, 2001),
http://www.au.org/cardpressrelease.htm.
Saperstein, David, “Public Accountability and Faith-Based Organizations: A Problem Best Avoided,” Harvard Law Review, Vol. 116, No. 5, (Mar., 2003), pp. 1353-1396, The Harvard Law Review Association,
http://www.jstor.org/stable/1342729.
Collins, Milton, “The Privatization of Social Service Programs,”
http://www.wlu.edu/documents/shepherd/a ... ollins.pdf.
Tex. Boll Weevil Eradication Found., Inc. v. Lewellyn, 952 S.W.2d 454, 472 (Tex. 1997). These factors affect whether a government function can be delegated: (1) are the private delegate's actions subject to meaningful review by a state agency or other branch of state government;( 2) are the persons affected by the private delegate's actions adequately represented in the decision process; (3) is the private delegate's power limited to making rules, or does the delegate also apply the law to particular individuals;(4) does the private delegate have a pecuniary or other personal interest that may conflict with his or her public function; (5)is the private delegate empowered to define criminal acts or impose criminal sanctions; (6)is the delegation narrow in duration, extent, and subject matter; (7)does the private delegate possess special qualifications or training for the task delegated to it; and (
has the Legislature provided sufficient standards to guide the private delegate in its work. Although not all the factors relate to public assistance (notably three and five), the rest can, and are considered very instrumental to determine whether certain authority can have been delegated.
http://www.supreme.courts.state.tx.us/e ... 048105.pdf.
Freeman, Jody, 116 Harv. L. Rev. 1285, 1304-05 (2003).
Estrin Gilman, Michele, “Legal Accountability in an Era of Privatized Welfare,” 81 Cal. L. Rev. 569, 611-12 (2001).
Freeman, Jody, “Extending Public Law Norms Through Privatization,” 116 Harv. L. Rev. 1285, 1300 (2003).
Jody Freeman, “The Contracting State,” 28 Fla. St. U. L. Rev. 155, 170 (2000). Persons concerned about the potential negative results associated with privatization are called “consequentialists.”
Diller, Matthew, Form and Substance in the Privatization of Poverty Programs, 49 UCLA L. Rev. 1739, 1740 (2002).
Shue, Henry, Basic Rights: Subsistence, Influence, and U.S. Foreign Policy,p. 23, Princeton University Press (1996).
Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub.L.No. 104-193, 110 Stat. 2105.
42 U.S.C § 604(a)
Stevenson, Dru, “Privatization of Welfare Services: Delegation by Commercial Contract:, 45 Ariz. L. Rev. 83, 88 (2003).
“Safety Net for Sale: Dangers of Privatizing Social Services,” American Federation of State, County and Municipal Employees, AFL-CIO, 1625 L Street, N.W., Washington, D.C. 20036-5687, Web site:www.afscme.org,
Privatization Section,
http://www.afscme.org/private/index.html
