New Act Requires Equal Federal Funding for Religious Groups, Allows Faith-Based Hiring in Social Services

The “Lifting Local Communities Act” is straightforward: it requires that federal, state, and local governments distributing federal funds for social services treat religious organizations exactly the same as non-religious groups when applying for grants or contracts. This means no discrimination for or against an organization based on its religious nature.

Keeping the Faith While Taking the Funds

For religious groups, the biggest takeaway is that they get to keep their identity intact while using public money. According to Section 3, an organization receiving federal funds can keep its religious name, display religious symbols, and, crucially, select its board members and employees based on its religious tenets. If you run a faith-based non-profit that provides job training or meal delivery, this bill makes sure you don’t have to change your mission or your hiring practices just because you took a federal grant.

This is a massive shift. Currently, many federal programs require recipients to adhere to broad non-discrimination rules, often including employment. This Act creates a clear exception: a religious organization can use public funds to run a social service program while still maintaining employment policies based on faith. For example, a federally funded homeless shelter run by a religious group could still require its employees to adhere to specific religious standards, which is something a non-religious federally funded organization couldn't do.

The Fine Print for People Getting Help

While the organization gets to keep its religious identity, the people receiving the services are protected—at least in theory. The bill says an organization cannot turn away a beneficiary based on their religion or lack thereof. However, it also clarifies that the organization isn't required to change the program's structure to accommodate a beneficiary’s specific religious needs. This is where things get tricky. If you rely on a federally funded childcare center run by a religious organization, and you object to the religious content, the organization doesn't have to adjust its curriculum for you.

If a service recipient objects to the religious nature of the provider, the government entity that handed out the funds must quickly find an alternative service that is "reasonably accessible and offers similar value." For someone in a dense urban area, this might be easy. But if you live in a rural community where the local faith-based food bank is the only option for miles, the government’s ability to provide a comparable, non-religious alternative quickly might be next to impossible, leaving beneficiaries in a tough spot.

Overriding Local Rules and Limiting Oversight

One of the most consequential provisions is buried in the final section: the Act overrides any existing federal, state, or local laws that conflict with these new rules regarding federal financial assistance to religious organizations for social services. If your state or city has stricter non-discrimination laws or specific rules about how public money can be used by religious groups, those rules are now preempted and overridden by this federal Act.

Finally, the bill also addresses audits. Religious groups can keep their federal funds in separate accounts, and if they do, the federal government can only audit those specific accounts. If the organization chooses to mix its own non-required funds with the matching funds, only then might those commingled funds be subject to a federal audit. This structure is designed to protect the organization’s private, non-federal money from government oversight, which is a significant win for their autonomy but potentially reduces transparency for the public funding they receive.