Nonprofit Law Prof Blog

Lawsuit Challenging Minister Rental Allowance Could Foreshadow Broader Assault on Religious Nonprofit Benefits

Last month the Freedom from Religion Foundation and several of its members filed a lawsuit in federal district court in California against Treasury Secretary Geithner, IRS Commissioner Shulman, and California Franchise Tax Board Executive Officer Stanislaus challenging the exclusion from income provided for the value of parsonages and rental allowances provided to a "minister of the gospel" under Internal Revenue Code section 107.  While normally such suits would have a taxpayer standing problem - i.e., the long-standing federal court holding that merely being a taxpayer provides insufficient grounds for standing to challenge a tax benefit provided to another taxpayer - the U.S. Court of Appeals for the Ninth Circuit has indicated a willingness to depart from that holding when the Establishment Clause is at issue (see Winn v. Arizona Christian School Tuition Organization (slip. op. pages 4596-4602), rehearing en banc denied).  The attorney representing the Foundation is the well-known atheist Michael Newdow, who previously challenged the constitutionality of "under God" in the Pledge of Allegiance used in public schools.

The lawsuit is significant not only because of the plausible threat it provides to Code section 107, which is of significant financial value to religious leaders and their congregations, but also because if it overcomes the standing issue it may open the door to challenges to the many other tax and non-tax legal benefits provided only to religious bodies.  While many and perhaps most of those benefits are defensible on avoiding entanglement grounds, it is far from clear that all of them could be so defended. 

LHM

New York Times Discusses Acceptance of Pagans

Because the federal census does not ask about religious affiliation, and because ridicule or discrimination has tended to keep Pagans closeted in the past, statistics on the number of adherents in the United States are imprecise and probably too low, according to an article in the New York Times.  Still, the recent growth in their numbers is evident in surveys done in 1990 and 2001 by the City University of New York.  And the acceptance of the religion by the military and others has increased in recent years.  In the 1970s, Wiccan groups began seeking and obtaining tax-exempt status from federal and state authorities, said the Rev. Selena Fox, the founder and spiritual leader of an early, influential Wicca church, Circle Sanctuary in Barneveld, Wis.  By the decade’s end, Wicca was included in the handbook for military chaplains.  Since then, Wiccans have served as chaplains in prisons and hospices, as well as in the armed forces.  Recently, Ms. Fox supplied the invocation for the daily session of the Wisconsin State Assembly.

Reactions Continue to Pour in on Pope's Invitation to Traditional Anglicans

Last week, the Vatican made a proposal to Anglicans unhappy about their church's moves toward accepting female and gay bishops: reunite with the Roman Catholic Church.

In a surprise announcement from Rome last Tuesday, Pope Benedict XVI approved a provision to create a new church entity that will allow Anglicans to join the Catholic Church in a format similar to Ukrainian or Eastern Rite Catholics, keeping their liturgy and married priests, but not married bishops.

According to USA Today, the announcement stunned many in the 77-million worldwide Anglican Communion, particularly the Church of England, where the Archbishop of Canterbury has wrestled for years with factions that oppose female bishops.

Meanwhile, several church officials and commentators have been weighing in on the Pope's announcement.  One Anglican group, known as the Traditional Anglican Communion, opposes female bishops and has made public its bid to join the Catholic Church. The fellowship, which split from the Archbishop of Canterbury in 1990, says it has spread to 41 countries and has 400,000 members.  In a similar vein, the Rev. Kendall Harmon, canon theologian for the Episcopal Diocese of South Carolina, sees the Vatican's announcement as a global event, "maybe one of Benedict's biggest moves."   

"Rome is trying to find a structural solution to an unbearable pastoral problem," Harmon said in a statement reacting to the Pope's invitation.   According to him, Vatican leaders "clearly feel that if they don't intervene now, it will get worse. Their motive is the reunification of Christianity. If Anglicanism wasn't going to provide a catholic solution, the worldwide church would fracture even more."

Still, Harmon does not expect to see any "snap moves" — particularly because most traditionalist bishops in the USA are married.

Across the border in Canada, some Anglicans have rebuffed the Pope's invitation.  Canadian Anglican parishes dissatisfied with their church's new approach to female bishops and gays have broken away from the Anglican Church and formed the Anglican Network in Canada.  According to the Network's website, the group "embrace[s] Anglican orthodoxy — the biblically faithful, authentically Anglican way of following Jesus … defined by and centered on the … foundational principles of the Anglican tradition in Canada."  No evidence exists that the breakaway parishes will now reunite with the Catholic Church.  In fact, CBC News reported on Thursday that Kevin Flynn, director of Anglican studies at Saint Paul University in Ottawa, said he does not think Rome's offer will change much between Anglicans and the Catholic Church. Flynn also thinks the Pope's attempts to woo disaffected Anglicans might alienate some Catholics who want to see their church adopt more liberal views.

"For those Roman Catholics, … I'd say, 'Well, come and be an Anglican.' "

In an op-ed published in Saturday's New York Times, British commentator A. N. Wilson opined that the Pope's overture is actually good news for Britain:

It will formally bring to an end the idea of the Established Church, and of the monarch as that Establishment’s symbol and head. Whatever our private religious allegiances, we Britons no longer want to force our royal heads of state to jump through those impossible hoops. The paradox is that a move by a conservative pope to ease the tender consciences of conservative-minded Anglicans will actually be a move toward the complete secularization of Britain, and an acceptance of its new multicultural identity.

In yesterday's Times, Ross Douthat took a different approach.  According to Douthat, the Pope's invitation "represents an unusual effort at targeted proselytism, remarkable both for its concessions to potential converts — married priests, a self-contained institutional structure, an Anglican rite — and for its indifference to the wishes of the Church of England’s leadership."

He continues: 

This is not the way well-mannered modern churches are supposed to behave.  Spurred by the optimism of the early 1960s, the major denominations of Western Christendom have spent half a century being exquisitely polite to one another, setting aside a history of strife in the name of greater Christian unity.

This ecumenical era has borne real theological fruit, especially on issues that divided Catholics and Protestants during the Reformation. But what began as a daring experiment has decayed into bureaucratized complacency — a dull round of interdenominational statements on global warming and Third World debt, only tenuously connected to the Gospel.

At the same time, the more ecumenically minded denominations have lost believers to more assertive faiths — Pentecostalism, Evangelicalism, Mormonism and even Islam — or seen them drift into agnosticism and apathy.

Nobody is more aware of this erosion than Benedict. So the pope is going back to basics — touting the particular witness of Catholicism even when he’s addressing universal subjects, and seeking converts more than common ground.

Along the way, he’s courting both ends of the theological spectrum. In his encyclicals, Benedict has addressed a range of issues — social justice, environmental protection, even erotic love — that are close to the hearts of secular liberals and lukewarm, progressive-minded Christians. But instead of stopping at a place of broad agreement, he has pushed further, trying to persuade his more liberal readers that many of their beliefs actually depend on the West’s Catholic heritage, and make sense only when grounded in a serious religious faith.

At the same time, the pope has systematically lowered the barriers for conservative Christians hovering on the threshold of the church, unsure whether to slip inside. This was the purpose behind his controversial outreach to schismatic Latin Mass Catholics, and it explains the current opening to Anglicans.

Douthat then makes an interesting comment:

...in making the opening to Anglicanism, Benedict also may have a deeper conflict in mind — not the parochial Western struggle between conservative and liberal believers, but Christianity’s global encounter with a resurgent Islam.

Here Catholicism and Anglicanism share two fronts. In Europe, both are weakened players, caught between a secular majority and an expanding Muslim population. In Africa, increasingly the real heart of the Anglican Communion, both are facing an entrenched Islamic presence across a fault line running from Nigeria to Sudan.

Hence, Douthat concludes, what is being interpreted, for now, "as an intra-Christian skirmish may eventually be remembered as the first step toward a united Anglican-Catholic front — not against liberalism or atheism, but against Christianity’s most enduring and impressive foe."

The debate will no doubt continue for a while.  We shall keep you posted as warranted.

VEJ  

Evangelical Lutheran Church in America Loosens Gay Clergy Policy

Earlier this week, we blogged that the Evangelical Lutheran Church in America ("ELCA") was set to discuss the issue of gays and lesbians in committed relationships serving as members of the clergy.  Reuters is reporting that the church has indeed taken steps to allow gays and lesbians to serve in ministry. The Reuters report states in part:

The Evangelical Lutheran Church in America also encouraged its congregations to find ways to support or recognize members in "accountable lifelong, monogamous, same-gender relationships."

But it did not give official sanction to gay marriage or approve any rites for such ceremonies.

The report continues:

The resolution, approved by a vote of 559 to 441, said the church was committed to finding ways to allow people in "accountable, lifelong, monogamous, same-gender relationships to serve as rostered leaders of this church."

The measure applies to clergy as well as professional lay leaders.

The assembly still has to approve procedural changes to allow the resolution to go forward. [John] Brooks[, the director of the Evangelical Lutheran Church in America's news service and a spokesman for the church,] said he expected the new policy to be in place by 2010.

VEJ

Judge Rules U.S. Seizure of Charity's Assets Unlawful

According to a report published in today's Toledo Blade, a federal judge in Toledo, Ohio, on Tuesday  ruled that the U.S. government violated the constitutional rights of a Muslim charity when it froze the charity's assets in 2005 and prevented it from adequately defending itself against allegations of ties to terrorism.  

Judge James Carr (Northern District of Ohio) released a 100-page order late Tuesday in KindHearts for Charitable Development, Inc. v. Geithner in which he agreed with the charity's assertions that it had been denied due process and was subjected to the unlawful seizure of its property. According to the Blade, KindHearts, founded in 2002, was targeted in 2006 by federal agents, who in turn froze the charity's financial assets.  Court documents revealed that "the organization was under investigation by the Office of Foreign Assets Control of the U.S. Treasury De-partment and would potentially be labeled as a 'specially designated global terrorist.'" 

Earlier this year, Judge Carr ordered the government to produce copies of all materials seized in 2006 from KindHearts' headquarters and the home of its president.

The organization's attorneys had argued that without access to the information, it could not defend itself against charges of terrorism by showing where its money was spent. The government countered that opening access could compromise its investigation.

The organization's attorneys also argued that the government violated search-and-seizure laws when it froze KindHearts' assets without showing probable cause and without obtaining a warrant.

In the order released on Tuesday, Judge Carr wrote:

KindHearts is indisputably one of 'the people' protected by the Fourth Amendment. If the Constitution affords KindHearts no protection from unreasonable searches and seizures, whom among 'the people' does it protect and who among the people can be certain of its protection?

Judge Carr also noted that finding the Fourth Amendment inapplicable to the government's "block actions" would disregard its "role as a bulwark against the abuses and excesses of unchecked governmental power." 

In responding to the ruling, Charles Miller, a spokesman for the U.S. Department of Justice Civil Division said that his office will analyze the lengthy opinion so that it is wholly understood.  He declined further comment.

Of course, the government can appeal the decision to the Sixth Circuit.  The Blade reports that "At a May 1 court appearance before the judge in which both sides argued their cases, the government indicated if the judge ruled the freeze of assets lifted, it would request a stay until the appellate court hears the case."

Time will tell what happens next.

VEJ

Lutherans to Vote on Sexually Active Gay Clergy

The Evangelical Lutheran Church in America ("ELCA") -- one of the largest Christian denominations in the country -- will decide this week whether to allow gay people in relationships to serve as clergy.

Pursuant to church policy, sexually active gay people are not currently permitted to serve in the clergy; however, celibate gay people are allowed to thus serve.  Over 1,000 Church delegates -- clergy and laypeople -- meeting in Minneapolis this week might as early as today vote on a 34-page document on human sexuality that would permit congregations to let gay men and lesbians in committed, monogamous relationships serve as clergy.

The ELCA is the latest major denomination to address the issue of gay clergy.  Just last month, the Episcopal Church voted to make gay people eligible for any ordained ministry.  Earlier this year, the Presbyterian Church (USA) voted against accepting openly gay pastors. 

In a news conference in Minneapolis on Monday, ELCA Presiding Bishop Mark S. Hanson predicted "deep, profound disappointment" for the losing side.  However, few -- if any -- observers expect large conservative factions to break away from the ELCA if the proposal passes.

VEJ

Politics in the Pulpit 2008 AND 2009

The Alliance Defense Fund, which brought you Pulpit Freedom Sunday 2008, and the Federalist Society recently teamed up to host a panel discussion at the National Press Club on the constitutionality and wisdom of the Internal Revenue Code section 501(c)(3) prohibition as applied to pastors speaking from their pulpits.  The speakers included Professors Doug Laycock (Michigan) and Donald Tobin (The Ohio State University), as well as Rev. Barry Lynn from Americans United for Separation of Church and State and Benjamin Bull of ADF.  I finally had a chance to listen to the debate, and regardless of your views on this issue it is very informative about the various positions.

One interesting additional note.  The Alliance Defense Fund is apparently already gearing up for Pulpit Freedom Sunday 2009, for which it will recruit churches both to comment on current government officials and to comment on candidates for office.

LHM

AU Files Political Activities Complaint Against Richmond Church

Americans United for Separation of Church and State announced that it has sent a letter with the IRS regarding the appearance of Virginia Democratic gubernatorial candidate Brian Moran at the Fifth Street Baptist Church in Richmond.  AU based its letter on a Washington Post story about the appearance.  In that story, the church's pastor, Rev. F. Todd Gray, is reported as having stated ""Brian is right on guns, he's right on affirmative action, he's right on taxes, he's right on jobs.  I'm not telling you who to vote for, I'm just telling you who I'm voting for. I'm voting for Brian Moran."  As those familiar with the Code section 501(c)(3) ban on charities supporting or opposing candidates know, simply stating "I'm not telling you who to vote for" is not enough to prevent a violation of that ban if other facts and circumstances clearly indicate support of a candidate.  The timing of the appearance, only two days before the Democratic primary in which Moran is a candidate, is also highlighted in the AU letter.  What the IRS will do with the complaint is and may always be unknown, however, unless either the church chooses to publicize any IRS actions (as happened with the All Saints Episcopal Church in Pasadena) or the IRS ultimately chooses to revoke the church's tax-exempt status.

Interestingly, the same Washington Post article also reports that rival Democratic candidate Terry McAuliffe spent Sunday in church as well.  While the posting about McAuliffe's visit to the Gethsemane Community Fellowship Baptist Church in Norfolk did not include any quotes from that church's pastor, a postingon the Washington Post's Virginia Politics blog notes that McAuliffe's reported statements including telling the congregation he had been endorsed by every African-American newspaper in the state that makes endorsements, thereby highlighting his candidacy in the election being held two days later.  It is not clear form the post whether the other Democratic candidates, including Moran, had been given a similar opportunity to speak to the congregation, which might render McAuliffe's appearance less of a legal concern.

LHM

Religious Organizations Grapple With How to Layoff Employees

The Religions News Network (For Churches, a Right and Wrong Way to Hire and Fire) is reporting that many congregations, facing declining contributions and reduced budgets, are following the lead of cash-strapped corporations by laying off employees. However, this is not a task being taken lightly.  The stakes are higher, congregational leaders say, when you’re putting someone’s spiritual leader out on the street.

The RNN report states in part: 

Churches have never been good at this. “Terminal niceness” keeps congregations from dealing honestly with unneeded or ineffective staff members, former General Electric CEO Jack Welch told ministers recently.

Congregational leaders, meanwhile, say already-tough financial decisions can become excruciating when you are firing the man who married your daughter or the woman who held your hand in the hospital.

“Terminating employees, in business or in churches, is never an easy task,” said Phill Martin, deputy executive director of the Dallas-based National Association of Church Business Administration. But the task becomes immeasurably more complicated, he said, if church leaders and ministers are lowering the ax.

“When you live out of the values of ministry, it is more difficult to segregate the impact on the individuals’ and families’ lives than it is for most business people,” Martin explained. “It’s tough when your core value is `I’m here to minister to people’ and you become the author of that pain.”

Instead, churches in financial crisis “get all flustered,” said congregational expert David Odom, executive vice president of Leadership Education at Duke Divinity School in Durham, N.C. Congregations typically vacillate “between cold, hard business facts and denial,” he said.

In a bid to delay firing employees, congregations are utilizing other coping measures such as giving employees unpaid furloughs and shifting some staff to part-time status.  However, if the economy does not improve soon, these congregations will have no option but to lay off some employees.    

VEJ