Churches and other overtly religious organizations will be able to receive economic aid from the federal government under the recently passed economic stimulus package aimed at supporting small businesses through the coronavirus shutdowns, NPR reported.
The allowance for churches to receive forgivable payroll loans from the Small Business Administration, announced last week, brings up questions from critics about whether it is constitutional for the federal government to support religious organizations in such a way.
What changed? The SBA issued new guidance on April 3, clarifying that religious organizations would not be excluded from the program that gives small businesses access to loans to cover payroll and bills — loans which can be largely forgiven if used for qualifying purposes.
"Faith-based organizations are eligible to receive SBA loans regardless of whether they provide secular social services," the SBA guidance read. "No otherwise eligible organization will be disqualified from receiving a loan because of the religious nature, religious identity, or religious speech of the organization."
Why do churches need this? Churches often rely on donations from attendees to make ends meet. Although some churches utilize online donation platforms, many churches see a significant drop-off in donations when people are not in attendance. Most states have issued stay-at-home orders and limits on large gatherings that have essentially shut churches down.
"There is a portion of that revenue that just by virtue of people's habits and practices doesn't come back," Vice President Mike Pence acknowledged during a recent conference call with pastors, NPR reported.
Will this impact religious freedom? Despite the announcement from the SBA, some churches are looking for more assurance that the acceptance of federal funds won't lead to any government infringement on religious freedom. For example, many churches would not hire a member of the LGBTQ community, because that conflicts with Christian beliefs, but such a hiring policy could be ruled as illegally discriminatory in other contexts.
"It is unclear if there is a private cause of action for any individual to bring a discrimination lawsuit against a church that receives these funds or if it is solely a matter of federal enforcement," guidelines from the Church of the Nazarene state regarding the loan program. "In either case, the church should be aware that at least some risk exists."
The SBA loan application has included federal anti-discrimination language that could potentially conflict with an organization's right to adhere to religious beliefs in employment or services.
Separation of church and state? Some still believe religious organizations should not be eligible for funding from the government.
"The government cannot directly fund inherently religious activities," said Alison Gil, legal and policy vice president of American Atheists, NPR reported. "It can't spend government tax dollars on prayer, on promoting religion, [or] proselytization. That directly contradicts the establishment clause of the First Amendment. This is the most drastic attack on church-state separation we have ever seen."
The SBA, however, believes it would actually be unconstitutional to exclude organizations from the program just because of religious status.
[Some agency regulations] "impermissibly exclude some religious entities," the SBA said. "Because those regulations bar the participation of a class of potential recipients based solely on their religious status, SBA will decline to enforce those subsections and will propose amendments to conform those regulations to the Constitution."