Privatization and Prayer: The Case of Charitable Choice

In 1996, as part of comprehensive welfare reform legislation, Congress enacted Section 104 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PWORA). That provision, which has subsequently come to be known as “Charitable Choice” was the first of a number of initiatives which have been heralded as a new approach to delivery of government social services: state contracts with “faith-based organizations,” or FBOs.




Privatization and Prayer: The Case of Charitable Choice


Sheila Suess Kennedy

Assistant Professor

Law and Public Policy

School of Public and Environmental Affairs

Indiana University


This paper will briefly sketch the history of government’s partnerships with religious organizations delivering social services, and the characterization of that history within the Congressional debates over Charitable Choice. It will identify the assumptions upon which passage of the measure rested, the nature and extent of the evidence supporting those assumptions, and the extent to which Charitable Choice actually necessitates changing existing public administration practices. Finally, the paper will consider the politics of the policy process itself, and the extent to which current “faith based” initiatives are driven by privatization ideology and clerical rivalries rather than public policy analysis.


In 1996, as part of comprehensive welfare reform legislation, Congress enacted Section 104 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PWORA). That provision, which has subsequently come to be known as “Charitable Choice” was the first of a number of initiatives which have been heralded as a new approach to delivery of government social services: state contracts with “faith-based organizations,” or FBOs. The adoption of Section 104, the rhetoric surrounding it, and the current enthusiasm for expanding it provide an illuminating window into the politics of American public policy formation. The passage of—and debate over—Charitable Choice thus provides a case study demonstrating both the ongoing tensions between constitutional constraints and popular policy prescriptions, and the problems encountered when legislative initiatives are based upon incomplete understandings of complex social realities.
This paper will briefly sketch the history of state and federal governments’ partnerships with religious organizations delivering social services, and the characterization of that history within the Congressional debates over Charitable Choice. It will identify the assumptions upon which passage of the measure rested, the nature and extent of the evidence supporting those assumptions, and the extent to which Charitable Choice actually necessitates changing existing public administration practices. Finally, the paper addresses the politics of the policy process itself, and the extent to which current “faith based” initiatives are driven by privatization ideology and clerical rivalries rather than public policy analysis.


Background and History 

Federal and state government units have provided services through nonprofit and religious organizations since the inception of government social welfare programs, although the media characterization of President Bush’s faith-based initiative as “new” or even “revolutionary” has tended to obscure that history.  In a 1969 study of findings from a 1965 survey of 406 sectarian[1] agencies in 21 states, Bernard J. Coughlin reported that 70 percent of them were involved in some type of purchase of service contract with the government.  A 1982 study by F.Ellen Netting, focusing on government funding of Protestant social service agencies in one Midwestern city, found that some agencies received between 60 and 80 percent of their support from the government, and that approximately half of their combined budgets were government-financed. In 1994, government funding accounted for 65 percent of the nearly two billion dollar annual budget of Catholic Charities USA, and 75 percent of the revenues of the Jewish Board of Family and Children’s Services (Monsma 1996, Brown and McKeown 1997, Minow 2000). As the American Jewish Committee (AJC) noted in a 1990 Report of its Task Force on Sectarian Social Services and Public Funding,
…there has been a long-standing history of governmental aid to certain sectarian social programs, demonstrating that, in the non-educational context, there may be substantial involvement between the state and sectarian institutions. The government has provided aid to sectarian homes for the elderly, foster child care homes, and hospitals…The legitimacy of such aid, as a matter of broad public principle, was confirmed in the Supreme Court case Bowen v. Kendrick (1988). In so ruling the Court relied upon a nearly century-old decision in which it had upheld unanimously the provision of public funds to a sectarian-affiliated hospital, Bradford v. Roberts (1899)—the only other time the Court had directly addressed the issue (AJC 1990, 5).
Bowen v. Kendrick, the case referenced by the task force report, involved an Establishment Clause challenge to the Adolescent Family Life Act. That measure provided funding to a variety of local organizations, including religious organizations, to support counseling of teenagers about premarital sex and teenage pregnancy. While the Supreme Court in Bowen acknowledged that counseling services might be delivered by sectarian groups in a manner that violated the Establishment Clause, it declined to find the Act facially unconstitutional merely because that danger existed.  Any challenge would have to rest upon the particulars of a specific program; the mere inclusion of religious providers was held not to constitute an Establishment Clause violation.
Confounding both historical and constitutional analyses of Charitable Choice and President Bush’s subsequent faith-based initiative is the fact that our public debate, and much existing First Amendment case law, assumes the interchangeability of “religious,” “sectarian,” and “faith-based” as descriptive terms. There has been and is, however, enormous variation among the entities so labeled, and certain of those variations are politically relevant to the passage of Charitable Choice, as will be discussed below. Many religious providers with histories of social welfare provision are “faith-based” in the most literal sense—that is, the provision of essentially secular social services is motivated by their religious beliefs. Feeding and clothing the poor, tending to the sick, and housing the aged are approached as religious duties, rather than as opportunities for proselytizing or transforming the individuals served.  However, this is by no means universally true of religious organizations that have historically received government funding, especially old-age and child-care facilities (AJC 1990). Twenty percent of congregations providing social services currently collaborate with government agencies in the process (Chavez 2001). Indeed, the relationship between the state and the various types of sectarian agencies has historically
operated on a pragmatic, not a theoretical basis. The concern of each has been not a constitutional/theological consistency, but the creation of a system which allows the state, in effect, to buy services from the private sector without either subverting the essential mission of the agency or disregarding the church-state separation principle to which the state is bound (AJC 1990, 8).
The character of these relationships has been anything but clear and defined; indeed, the network of social service provision is complex, intertwined, and frequently ad hoc (Wineburg 2001). As the AJC’s Task Force delicately noted, “problems” frequently exist when provision of services by a religious provider is inconsistent in some fashion with the mandates of state law or with constitutional imperatives. For example, Catholic foster care agencies are funded in Illinois despite their noncompliance with state law mandating that teens be provided with birth control. The Salvation Army receives substantial funding despite being “pervasively sectarian” by almost any definition of that term (Winston 2001). These and other “problems” have frequently been “solved” by unspoken understandings, “otherwise known as ‘not talking about it’” (AJC 1990, 8). One of the unanswered (and troubling) questions raised by the Bush initiative is the effect increased public attention to these partnerships will have on those pragmatic and unspoken understandings.
Given this history and background, one might have expected that the Congressional debate would address several important questions: what is meant by “faith-based” organizations? Do FBOs targeted by the Charitable Choice legislation differ from those with a long history of governmental contractual relationships? If so, how?  What are the barriers to their participation in social service delivery? To what extent are those barriers constitutionally mandated?  What is the level of availability and interest, and what are the capacities, of these organizations?  Few of these questions, however, found their way into the Congressional dialogue.


The Congressional Debate

While the history of religious organizational participation in welfare programs is complex, multifaceted, and of long duration, one would never learn that from reading Congressional discussions leading to the adoption of Charitable Choice. Indeed, in contrast to other portions of the welfare reform legislation, the record contains relatively little debate over Section 104.[2]  “What little Senate debate there was on Charitable Choice focused on the provision’s constitutionality” (Friedman 1997). Originally, the measure explicitly barred federal and state governments from requiring the creation of a separate nonprofit organization; however, an amendment by Senator William Cohen of Maine deleted the provision, and required states to pursue implementation “consistent with the Establishment Clause of the United States Constitution.”[3]
Review of the Congressional Record with respect to the discussions around Charitable Choice will confirm the representative nature of the following testimony by proponents of the measure.

  • Representative Joe Knollenberg of Michigan testified that American government’s monopoly on the welfare system “undercuts the efforts of private organizations.”[4]
  • Former Senator John Ashcroft of Missouri (principal sponsor of Charitable Choice) testified that the welfare system “thwarts the efforts of private and religious charitable organizations to care for the needy…intermediary organizations—especially private and religious charitable organizations—need to be utilized in welfare reform.”  According to Ashcroft, this participation was not occurring because religious organizations feared that receipt of government funds “would require radical changes in their beliefs, their structure, their facilities, their program or their in organization—changes that would rob these programs of the very characteristics and attitudes that make them successful.”[5]
  • Ashcroft also testified  “Government dollars alone will not solve the problem. We need to bring in nongovernmental, charitable organizations and citizens to be part of the solution.”[6]
  • In a statement of support for Charitable Choice, Senator Jon Kyl of Arizona said “For instance, if given $10,000 to spend on a welfare program of their choice, most Americans would choose to contribute to the local homeless shelter or Salvation Army over some Government welfare program because they know the private sector will be more effective.”[7]
Perhaps the best summary of the perspective of Charitable Choice’s Congressional supporters is contained in a speech that then-Michigan-Senator (now Secretary of Energy) Spencer Abraham made to the Legatus Regional Conference, a group of Catholic business leaders, on October 30, 1997. Senator Abraham decried a “destructive, ill-considered provision” of prior law that prohibited faith-based organizations from contracting with local governments to provide services.  Without specifying the “ill-considered provision” to which he was referring, he explained that “[U]nder this provision, faith-based organizations had to give up their religious character in order to provide social services with public assistance…All religious references in the churches, from crucifixes to Bible scriptures carved into the wall, had to be removed or covered if government funds were to be spent.” Charitable Choice, on the other hand, said Senator Abraham, allows organizations to receive government money without having to change their hiring practices, remove their religious symbols or create separate corporations.[8]

Abraham made similar comments in testimony supporting the Effective Substance Abuse Treatment Act, on November 8, 1997. Contending that drug treatment would be more effective if faith-based organizations were allowed “to accept federal funds without sacrificing their religious character,” he pointed to two examples of successful faith based programs—the Mel Trotter Ministries, which claims a 70 percent long term success rate, and San Antonio’s Victory Fellowship, which claims to have served over 13,000 persons with an 80 percent success rate. The self-reported results of these programs were cited as evidence that “where most treatment centers fail, those that are faith-based work.”[9] 

If their public statements accurately reflect their understanding, these proponents of faith-based participation in social service delivery were simply unaware of the extent to which religious organizations were already represented in the complex mix of service provision that characterizes most local efforts.  Robert Wineburg and others have documented the response of nonprofits, both faith-based and secular, to the federal budget cuts affecting social services in the early 1980’s. Wineburg has also demonstrated the “real world” interrelationship of agencies public and private, religious and secular, formal and informal in the creation of the social safety net (Wineburg 2001). The record of Congressional debate on Charitable Choice is devoid of reference to—or recognition of—those complex realities.
Similarly, most of the testimony reflects a concern that government contracting requires faith-based organizations to “secularize”—to remove religious icons and “hide the bibles,” as Senator Abraham charged. However, as Stephen Monsma documented in his study, When Sacred and Secular Mix (1996), other than a small number of highly publicized, unfortunate incidents, few religious contractors have experienced such demands.
While many proponents of Charitable Choice supported the provision as an issue of fairness—“leveling the playing field” to avoid or minimize the likelihood of unequal treatment (Wubbenhorst, 2001)—much consideration of Charitable Choice and other faith-based initiatives has proceeded on a frequently articulated assumption that the greater efficacy of faith-based programs is a “given”—that religious programs are more successful, do a better job at lower cost, and consistently outperform government efforts. In fact, there is no virtually no data either confirming or rebutting that presumption, because there is little or no scholarship addressing the issue. Such evidence as exists is almost entirely anecdotal—and the plural of “anecdote” (Senators Ashcroft, Abraham, et al notwithstanding) is not “data.”
As illuminating as the Congressional testimony is, it is even more illuminating to note what issues were not discussed at all, or dismissed after only superficial attention. Senator Ashcroft addressed some of the First Amendment concerns raised by opponents of the measure,[10] but the record is virtually barren of any reference to accountability by, or capacity of, the grass-roots religious organizations held up as examples of ideal private contractors. Similarly absent was any consideration of the transaction costs incurred by organizations that do business with the government (Grønbjerg 1997) or the possibility of mission displacement or loss of independence as a result of increased dependence on government funding (Alexander 1999).


Assumptions and Evidence

As the above, necessarily abbreviated, description of the Congressional debate accompanying adoption of the legislation demonstrates, two unsubstantiated claims impelled passage of the Charitable Choice provisions:
  • The existence of barriers preventing participation in contracting by FBOs unwilling to secularize; and
  • Superior performance by FBOs when measured against traditional nonprofits or government agencies.
The evidence for both assumptions, as noted, is sketchy.

Anti-religious Bias

A few weeks after the establishment of the White House Office on Faith Based Initiatives, the Wall Street Journal published an article by John DiIulio, Jr., the first director of that office. While DiIulio explicitly recognized the absence of social science research on efficacy, he repeated the assertion that
The ‘Charitable Choice’ provision of the 1996 welfare reform law changed the federal government’s procurement and performance-based contracting rules so that religious organizations that provide social services could compete for support on the same basis as other non-governmental providers of these services, and do so without having to hide their religious basis. (emphasis supplied) (DiIulio 2001)
The assumption—the “given”—is that prior to the passage of Charitable Choice, faith-based organizations could contract with government only if they were willing to secularize, to mask their religious roots and identities. As Stephen Macedo recently noted, however,
Religiously-based nonprofit organizations are full and active participants in

publicly subsidized social service activities. Equally striking, public officials impose far less direct pressure on religiously based nonprofits than one might have expected [citing Monsma]. Even those nonprofits that rank at the high end of the “religious practice” scale—those who select employees based on agreement with the organization’s religious beliefs, who favor students or clients in agreement with the religious doctrines, child service agencies that say prayers at meals, etc.—encounter surprisingly little direct and overt pressure from the government to curtail those activities. Indeed, among child service and international relief organizations, religiously based agencies report fewer problems of government interference than do purely secular organizations. The flow of public monies to the non-profit sector has been eased by the fact that constitutional principles that might raise warning flags—constitutional norms to the effect that when public monies flow to religious institutions they are to be used for public purposes only—have not been strictly enforced in this area of public policy (2000).
It is difficult to reconcile the reality of long-term religious involvement in government social service provision with the statements accompanying passage of Section 104 if one equates “religious” with “faith-based” organizations. One plausible explanation is, as indicated previously, that Congressional supporters were simply unaware of the degree of religious involvement in social service delivery. Others have suggested an alternative explanation: that Charitable Choice represents an attempt by some elements of the Christian Right to “control the narrative”—to define what is to be considered genuinely religious for purposes of accessing limited government funds (Chavez 2001, Sullivan 2001). They point out that Catholic Charities, Lutheran Social Services and even the Salvation Army have been faulted for having become “secularized” (Loconte 1997, Loconte 1998); the very attributes that have made those agencies attractive as government contractors—norms of professionalism, use of licensed social workers—have been cited as examples of a diminished “faith” component.  Under this view, the use of “faith-based” terminology is a subtext of the larger culture war. Those who believe, with Marvin Olasky, that the poor “need the internal pressure to [as Booker T. Washington said], live honored and useful lives modeled after our perfect leader, Christ’”  (Chernus, 2001), seek an end to poverty through individual transformation, achieved through conversion of the poor to a particular version of Christianity. Groups like Catholic Charities, however, “argue that generally the poor are no more in need of religious instruction and worship than the rest of society.” (Daly 2001).  Those who believe in the necessity of transformation believe that religions that don’t equate poverty with a failure of values are not authentically "faith based." On this account, Charitable Choice is at base a theological dispute between religious traditions with different theological perspectives on the causes of–and remedies for–poverty.

Commentators have also noted that the long-standing and complex interrelationships between secular and sectarian providers, however defined, defy the easy sorts of characterizations that accompanied passage of Section 104 (Wineburg 2001) and have expressed concern that the heightened attention to church-state contracting issues generated by Charitable Choice will upset the highly pragmatic “don’t ask, don’t tell” relationship described by Macedo and others (AJC 1990, Macedo 2000, Queen 2001).
Greater Efficacy

While DiIulio and others who have studied faith-based social service delivery have been careful to note the dearth of empirical evaluation data, political figures—beginning with the President—have treated the greater efficacy of FBOs as a proven fact. A review of the literature, however, yields very little evidence of efficacy, pro or con, and suggests areas deserving of further attention and study.
Indeed, while there has been a flurry of scholarship addressing issues peripheral to efficacy—for example, capacity of FBOs (Edin and Lein 1998, McCarthy and Castelli 1998, Alexander 1999), feasibility of FBO participation in welfare reform (Bartkowski and Regis 1999), the impact of government contracting on program planning (Netting 1982, Bolduc 1984, Netting 1984), likelihood of congregational participation in Charitable Choice initiatives (Olson et al. 1988, Chaves 1999), congregational activity in social service delivery (Wineburg 1992, Thomas et al. 1994, Grettenberger 1997, Wood 1997, Printz 1998, Williams et al. 1999, Cnaan 2000), political and constitutional questions (Esbeck 1997, Friedman 1997, Segal 1997, Minow 1999, Kennedy 2000, Ryden 2000), and the early impact of the legislation itself (Sherman 2000, Winston 2000, Wubbenhorst 2000)—there as been virtually no disinterested examination of comparative effectiveness.
In 1978, Rudolf Moos, Barbara Mehren and Bernice Moos evaluated a Salvation Army alcoholism treatment program, and determined that it performed as well as other similar treatment programs (Moos, Mehren, and Moos 1978).  In 1981, David Desmond and James Maddux investigated the impact of religious programs on chronic heroin users. Desmond and Maddux noted that abusers who joined the program willingly achieved abstinence more frequently than those whose participation was coerced, and that some participants (notably Hispanic clients) tended to self-select treatment options according to religion. The researchers, however, could not conclude that religious programs were more effective than other treatment options. (Desmond and Maddux 1981).  A study conducted by Carolyn Voorhees in 1996 attempted to determine the impact of church-based smoking cessation interventions; Vorhees compared an “intensive, culturally relevant and spiritually-based church intervention” involving sermons, testimony, volunteer counselors and follow up evaluations to a “minimal self-help” approach. The intensive intervention was found to be more effective (Vorhees et al. 1996), but whether this was due to intensity or religion was not addressed.  And in 2000, Alan Richard, David Bell and Jerry Carlson followed recovering drug addicts after treatment in order to examine the relationship between reduction in alcohol and drug use and religiosity. While study findings supported the hypothesis that participation in a “religious moral community” can affect use, the authors concluded that there was no clear relationship between behavior and individual religiosity. (Richard, Bell, and Carlson 2000).
Studying Implementation

In September of 2000, under a grant from the Ford Foundation, scholars at Indiana University Purdue University Indianapolis and the University of Massachusetts (Amherst) began a three-year study intended to provide at least preliminary answers to some of these questions. Three states with diverse political cultures and religious landscapes were chosen—Indiana, Massachusetts and North Carolina. The project will investigate their efforts to “implement” the provisions of Section 104,[11] looking at comparative efficacy of FBOs, at issues of capacity and accountability, and at the constitutional questions involved.
By efficacy is meant the measurement of outcomes: when someone is placed in a job by a faith-based organization, for example, do they hold the job for a longer time than clients placed by government or by a secular contractor? Do they make more money? Stay off public assistance longer?  
Any measurement of efficacy will require careful definition of terms. If the intended beneficiaries of Section 104 and its progeny are not the more traditional religious organizations that have been doing business with the state for decades, what characteristics shall be used to distinguish the YMCA, Salvation Army, Catholic Charities, Jewish Welfare Federation and countless other undeniably religious organizations that have long been involved with government social welfare programs from the sorts of faith-based examples cited by Senators Ashcroft and Abraham?  Size? Lack of a 501c3 charitable affiliate?  Lack of previous experience as a governmental contractor? If it is the difference between organizations that witness and those that evangelize, as some have suggested, what do we make of the fact that these are concepts exclusive to Christianity?[12]
A second area of study will focus on issues of capacity and accountability. The project will look at the capacity of state governments to work with and monitor the performance of the smaller, more grass-roots religious contractors who seem to be the targets of the faith-based initiative, as well as the capacity of those organizations to provide the services in question. We will be especially alert to the effects of government contracts on the organizational behavior of these FBOs. The concerns addressed will include those outlined in a paper written by William H. Wubbenhorst in 1998, The Pitfalls of Contracts for Funding Faith-Based Ministries as well as those raised in several pamphlets published by the Center for Public Justice, detailing the burdens—fiscal and otherwise—imposed by government reporting requirements, and warning of the dangers of becoming too dependent on government for funding. Researchers will also look for evidence that congregations experience a loss of prophetic voice (Ryden 2000), or that time is diverted from client service to contract compliance.
The final area of inquiry is constitutional. The media initially focused on the danger of proselytizing vulnerable populations or discrimination against welfare recipients who do not share the provider’s faith. While those are reasonable concerns, there are a number of other constitutional issues involved. Will non-mainstream and minority religions be treated equally in the bid process?  Will the provisions of Section 104 allowing FBOs to engage in employment discrimination pass constitutional scrutiny? What about programs that incorporate into their service delivery judgmental theological beliefs about race, or homosexuality, or the proper role of women? Will government fiscal or programmatic monitoring rise to the level of entanglement for purposes of the Lemon test (or what is left of it?)?    


Political Context and Administrative Challenges

If numerous religious organizations already participate in the provision of welfare-related social services, and if there is little or no social science data addressing comparative efficacy, what is the impetus for Charitable Choice and other policies intended to encourage FBO-government partnerships?


A number of pundits dismiss recent political enthusiasm for faith-based partnerships as a cynical attempt by Republicans and President Bush to placate, or play to, the Christian Right, an important constituency. This view is shared to some extent by those who see Charitable Choice as an effort to redefine “authentic” Christianity. But these explanations ignore the bipartisan embrace of such initiatives, their timing, and the general political context within which they have emerged. It is far more illuminating—and arguably more accurate—to view Charitable Choice and its progeny as part of a longer trend that has been reshaping governments, particularly at the state and local level, for at least the past twenty-five years (Guislain 1997, Besley and Ghatak 1999). While that trend is generally referred to as “privatization,” or “reinvention,” the more accurate term is “contracting out”—and it is used here to mean the vastly increased use of private for-profit and nonprofit providers to deliver government services pursuant to contractual agreements. 
While governments have always purchased goods and services—including social services—in the market, the practice has grown significantly since the late 1960s (Starr 1988). It has grown particularly in the social service arena (Smith and Lipsky 1993), where contractors are as likely to be nonprofit agencies driven by mission than business organizations driven by the profit motive, and where it presents issues quite different from agreements to purchase computers or pave city streets (Dannin 2001, Kennedy 2001).
The enormous growth of contracting out, where services are increasingly provided and paid for by government but delivered by private contractors, raises significant public policy issues, many of which (despite a copious literature dealing with privatization) have been ignored by policymakers intent upon “reinventing” government. Are public sector partnerships with businesses and nonprofit organizations creating a new definition of government?  The rise of the liberal state specifically entailed a sharpening of the public-private distinction. Public and private are “central terms in the language of claims making.” (Starr 1988). The blurring of that distinction has significant and far-reaching implications. To ask the question in another way, we might consider whether contracting is extending, rather than shrinking, the state. That is, does the substitution of an independent contractor for an employee equate to a reduction in the scope of government, as proponents believe? Or, as Donald Kettl has suggested (1993), does the substitution operate instead to shift the locus but not the scope of government activities, and thereby blur the boundaries between public and private, making it more and more difficult to decide where “public” stops and “private” begins (Gilmour and Jensen 1998, Kennedy 2001)? If we are, indeed, altering traditional definitions of “public” and “private” by virtue of these new relationships, what will be the effect of that alteration on a constitutional system that depends upon the distinction as a fundamental safeguard of individual rights?
Providing government service through contracts with private organizations also raises  management and accountability issues (Gilmour and Jensen 1998, Rosenbloom, Carroll, and Carroll 2000). While not the most recent exploration of those issues, perhaps the best description appears in Nonprofits for Hire (Smith and Lipsky 1993), where the authors note
American social policy is in the midst of a dramatic restructuring of the way public social services are provided. Although government funding of nonprofit organizations dates to the colonial period, only in the last 25 years did this government-nonprofit strategy emerge as a widespread and favored tool of public service delivery. But entrusting the most vulnerable citizens and the most delicate service tasks to private agencies is not simply a matter of choice between “making” or “buying” services. This might be the case when one considers contracting out for pencils, computer services or strategic weapons. But when it comes to purchasing the care and control of drug addicts, the safety and nurturing of children, the relief of hunger and the regulation of family life (through child protective activities) from private agencies, other values than efficiency are at stake. We contend that the impact of this transformation on the future of the American welfare state has not received adequate attention. (11)
Among the issues Smith and Lipsky address is the transfer of state power to private providers.
Like teachers, police officers and welfare workers, service providers in the nonprofit sector manage scarce resources by coping with their jobs in such ways as to render them not simply implementers of public policy, but ‘makers’ of public policy. (116)
In fact, if workers in nonprofit agencies are executing government contracts, logic compels us to consider them government agents. Failure to recognize that reality, and the lack of transparency of such arrangements for service delivery, threatens to compromise both legal and political accountability—a problem that is inevitably compounded when government services are provided by pervasively sectarian, faith-based organizations with a First Amendment right to religious autonomy. 
In fact, there are two distinct types of accountability implicated by contracting out in general and by contracting with FBOs in particular: constitutional accountability and political accountability. One is a “regime” problem: insuring that the method of delivering government services is consistent with the legal framework and overarching values of the polis. The other is a management problem: developing and implementing methods that will ensure compliance with relevant rules and achievement of desired outcomes. The American constitutional system began with a view of rights as essentially negative: that is, rights were defined as limits on the action of government rather than as affirmative entitlements. Despite the later extension of positive rights through legislative action, courts still begin examination of challenges under the Bill of Rights by asking whether there has been state action. If there is no state action, there is no constitutional violation. To put it another way, only the government can violate the Bill of Rights. When we refuse to recognize that contractors are government agents, we lose the right to hold them to constitutional standards.
Government accountability also includes political accountability, by which is meant obligations to providers, clients and taxpayers. Charitable Choice was originally described as an attempt to meet fairness obligations to faith-based providers by ensuring them a level playing field. The practical difficulties for public managers will come in attempting to provide that fair treatment of FBOs while still ensuring that clients’ constitutional rights are safeguarded and their programmatic needs met, and while engaging in oversight sufficient to protect the public purse. When government is providing a service—whether directly or through an intermediary provider—government must ultimately be responsible and accountable.
Pretending that services delivered through faith-based or community organizations aren’t being provided by government may satisfy those who are ideologically opposed to the welfare state, but it is a position that doesn’t accurately reflect reality. If we decide, after full examination of all the issues involved, that it should be American public policy to continue and/or expand delivery of social services through nonprofit and faith-based providers, we need to shape rules and expectations to govern that process (Dannin 2001). At a minimum, we need to decide when government is acting for purposes of constitutional accountability; we need to fashion methods for evaluating performance and compliance; and we need to determine, as a matter of public policy, what the rights as well as the obligations of contractors—faith-based or otherwise—shall be.

[1] The term “sectarian” as used by Coughlin refers to organizations formally affiliated with a religious tradition.


[2] Such formal debate as occurred is included in its entirety in Appendix A to this paper.


[3] Congressional Record, 104th Cong., 1st sess., 1995, vol. 141, no. 42: S13522.


[4] Congressional Record, 104th Cong., 1st sess., 1995, vol. 141, no. 19: E232.


[5] Congressional Record, 104th Cong., 1st sess., 1995, vol. 141, no. 86: S 7238.

[6] Congressional Record, 104th Cong., 1st sess., 1995, vol. 141, no. 125: S10938.


[7] Congressional Record, 104th Cong., 1st sess., 1995, vol. 141, no. 132: S 1190.


[8] Congressional Record, 105th Cong., 1st sess., 1997, vol. 143, no. 149: S11488.


[9] Congressional Record, 105th Cong., 1st sess., 1997, vol. 143, no.156: S12119-33.

[10] Congressional Record, 105th Cong., 1st sess., 1998, vol. 144, no.150: S12686-88.

[11] I have put “implement” in quotation marks, because the avowed purpose of Section 104 was to “level the playing field” by removing barriers to participation by faith-based entities. It can thus be argued that in the absence of such barriers, no particular affirmative effort was required.
[12] Fortunately, Ron Sider and Heidi Holland Unruh have established some highly useful categories. In their project, “Congregations, Communities and Leadership Development,” they describe four types of social service providers: secular; “religiously affiliated” providers who incorporate very little inherently religious programming; exclusively faith based providers, whose programs consist almost exclusively of inherently religious activities; and holistic faith-based providers, who combine contemporary professional techniques with inherently religious activities such as prayer.