Charitable Choice and the Faith Based Initiative

Before President Bush’s "faith-based initiative" there was Charitable Choice.

Before President Bush’s “faith-based initiative” there was Charitable Choice.

Charitable Choice took its name from provisions of Section 104 of the 1996 welfare reform legislation, the awkwardly-named Personal Responsibility and Work Opportunity Act (PRWORA). Section 104 introduced a major shift in the relationship between government and religious, or “faith-based,” human and social service organizations, which have since gone by the shorthand of “FBOs.”

Federal, state and local governments have all contracted with religious social service providers for many years, but Charitable Choice encouraged government agencies to make greater use of such organizations, and to contract directly with organizations considered “pervasively sectarian”—that is, organizations in which religious practices are so intertwined with all aspects of the programming as to make separation of the religious content from the secular content impossible. (Until last year, transfer of tax dollars to such organizations was constitutionally impermissible. That changed with the Supreme Court’s Zelman decision which allowed tax dollars to flow to pervasively religious schools via vouchers.)  

Charitable Choice legislation was based upon three assumptions:

  • that the faith community contained significant untapped resources;
  • that FBOs had encountered unnecessary barriers to partnerships with government agencies; and
  • that FBOs are more effective service providers than secular organizations.
Even in 1996, there was research rebutting the first two of these assumptions. Mark Chaves, at the University of Arizona, studies congregations across the United States. He has concluded that most American congregations are lucky to keep the roof repaired and the pastor paid, and lack the fiscal or volunteer resources to engage in broad-based assistance programs for poor people. Other data confirms his results. There simply are not “Armies of Compassion” waiting to augment government programs to help the poor, no matter how many times the President recites the phrase.

As far as the “barriers” to participation by FBOs, even research by proponents of greater faith based involvement found little or none. When the White House issued a “White Paper” detailing all of the ways in which FBOs were being discriminated against, the biggest problem was their lack of capacity to perform, not their religion. And indeed, Catholic Charities, Lutheran Social Services, Jewish Welfare Federation—even the Salvation Army—have contracted with units of government for decades. These organizations are large and sophisticated, and able to provide the services and comply with the reporting requirements involved. Smaller, more grass-roots FBOs face performance problems, and thus are not favored for government contracts. That isn’t a function of their religious character.

The one claim made for FBOs for which no data at all existed was the claim that they do a better job at a lower cost—that they are more effective than secular providers. Two and a half years ago, I put together a research team at the School of Public and Environmental Affairs, got a grant from the Ford Foundation, and set out to look at that issue, as well as organizational and constitutional issues implicated by Charitable Choice legislation.  Last month, we issued interim findings; the final report is due to be released early in November. The report has received a good deal of publicity, because it is the first to look at many of these issues.


Our research project involves an in-depth evaluation of the implementation of the Charitable Choice provisions of PRWORA over the course of three years in three states—Indiana, Massachusetts and North Carolina.  In addition to evaluating the comparable efficacy of secular and faith-based providers (the first such study of which we are aware), we focused on three elements critical to the success of such programs: the capacity of FBOs to deliver and states to monitor the identified services; constitutional and fiscal accountability for resources, outcomes and processes; and adherence to First Amendment boundaries between church and state.

The interim report includes preliminary results based on two years of investigation, data collection, and analysis.
Selected highlights include:

  • State approaches to Charitable Choice differ substantially. Indiana hired for-profit consultants to assist with active recruitment of FBOs. North Carolina used a state-wide nonprofit organization to contract for and manage a series of demonstration projects. Massachusetts, which had revamped its procurement system in 1995, took the position that the reforms incorporated at that time were sufficient to bring the state into compliance with Charitable Choice legislation.
  • In all three states, relatively few new faith-based providers have become government contractors. Many religious organizations continue to be wary of partnering with government, or continue to have difficulty entering the system.
  • Analysis of secondary data reveals that faith-based job training and placement efforts are somewhat less effective than those of secular organizations. (However, these conclusions say nothing about the comparative efficacy of other types of social service provision.)
  • We found that faith-based and secular providers have the same rates of placement into jobs, and that those jobs offer similar hourly wages. However, we also found that clients of the faith-based providers work substantially fewer hours per week and are less likely to be offered health insurance. 
  • Neither the original Charitable Choice legislation, nor the faith-based initiatives that followed it, defined "faith-based." Accordingly, we had to develop a typology—a scale—that  distinguishes among religious organizations and between secular and religious providers. Once we distinguished among organizations, we found:
(A)  The organizational networks of providers with a strong faith influence were weakest..  That is, strongly religious organizations were less “connected” to their communities and to other organizations.   

(B)   Strongly faith-influenced providers increased their community involvements and altered their relations with other organizations as a result of their partnership with government. (While I might consider this a good thing, religious leaders who are concerned that government contracting will change the character of FBOs might be less happy about this result.)

(C)   Fifty-seven percent of strongly faith- influenced organizations report that contracting with the state affected their mission.  Newer contractors tended to be more affected. Sixty-seven percent say that contracting with government has led to other community involvements.

(D)  Strongly faith-influenced organizations are somewhat more community-based, serving their own neighborhoods and areas of the city.

(E)  Moderately faith-influenced organizations face fewer “management challenges”—that is, deficits in management capacity—than either secular or strongly faith-influenced organizations.

·        Congregational leaders lack the constitutional knowledge and competence to assure constitutionally appropriate program implementation, and states lack the resources to monitor for constitutional violations. Congregational leaders averaged a score of sixty-six percent on a simple questionnaire testing constitutional knowledge. Sixty-seven percent of respondents did not know that tax dollars cannot pay for religious activities like prayer and bible study. This is very troubling, since people who do not know the rules are unlikely to obey them.

 It would be a mistake to draw broad conclusions about Charitable Choice from one limited research project. Nevertheless, the findings to date raise issues that should be addressed in future efforts at implementation, and point to areas requiring further research.
There is one conclusion we can draw, however, and that is a point I have made over and over, in my Word columns and elsewhere: we make public policy in this country on the basis of ideology rather than evidence. In that sense, Charitable Choice is no different from the Drug War, or “Don’t Ask, Don’t Tell.”