Napa Legal’s new Index helps leaders of faith-based nonprofits evaluate whether a state will advance or inhibit their ability to fulfill their mission.
With a new year come new hope and new opportunities.
This year holds particular promise for our country. The recent election cycle suggests that Americans may be seeking a return to core values such as faith and freedom.
Civil society institutions have a key role to play in this effort. While government and business make significant contributions to economic growth and national defense, civil society is best equipped to solve problems in communities—from education gaps to humanitarian needs to spiritual struggles and questions.
So, for each of us, promoting the flourishing of these institutions should be at the top of our list of New Year’s resolutions.
And, indeed, each of us does have an opportunity to do so in our own communities and states. This is a great time to consider getting involved—whether through board service, volunteer work, philanthropy, or otherwise—with a nonprofit whose mission resonates with our own sense of calling. This is also a great time for each of us to consider how we can contribute to improving our state’s laws governing civil society and, particularly, faith-based nonprofits.
The first step is to understand our state’s current legal landscape with respect to nonprofits.
In other words, does this state’s laws help or hinder the work of faith-based nonprofits?
Napa Legal, an organization that equips nonprofit leaders and attorneys with resources to promote civil society and religious freedom, seeks to help citizens answer this question for their states through the Faith and Freedom Index.
The Index identifies fourteen state laws that most significantly impact a faith-based nonprofit and its ability to flourish. These fourteen laws fall into two categories: regulatory freedom and religious freedom. State scores in these categories fall along the spectrum from healthy to hostile.
States score well for religious freedom when they appreciate and preserve the contributions of faith-based nonprofits. This includes basic freedoms, such as the freedom for people of faith to associate with others of shared beliefs. This also includes basic accountability requirements when the government does act to burden religious freedom.
For example, Alabama has a Constitutional amendment designed to protect religious freedom against government overreach. The state constitution requires that when the state, whether through agency action or legislation, burdens religious activities, the state must have a compelling reason and no alternative that would achieve the important objective without limiting religious exercise.
In contrast, Michigan law significantly limits the freedom of faith-based organizations. For example, a Michigan employment law regulates religious employers’ hiring decisions so stringently that a religious institution needs special state permission to consider faith commitment in its own hiring criteria. In other words, a Catholic school cannot commit to hiring Catholic teachers or staff without special state permission.
In the regulatory freedom category, states score well when they promote the flourishing of civil society by refraining from excessive regulations, fines, and other administrative burdens. When state laws impose extensive burdens on organizations that have done nothing wrong, the laws inhibit the work of these organizations.
For example, Indiana, the top-scoring state for Regulatory Freedom, expressly protects the role of religious guidance in governance matters and preserves the freedom of religious organizations to govern their internal affairs. Indiana’s charitable solicitation rules focus on punishing wrongdoers and limit the burdens on organizations that fundraise in good faith.
In contrast, neighboring Illinois holds the lowest rank for Regulatory Freedom. Illinois has complex and expensive requirements for fundraising and lacks express protections for the role of religious beliefs in corporate governance matters at faith-based nonprofits.
The majority of states fall somewhere in the middle in both categories. These states present significant opportunity. Their legal landscapes do not actively threaten faith-based nonprofits, but the states also do not facilitate or encourage their flourishing.
You can find the specific opportunities, strengths, and weaknesses, in your state by reviewing your state’s individual profile.
The individual state profiles include the specific factor breakdown for each of the fourteen categories of laws analyzed. Each factor score shows the “points earned” relative to the points possible. Factors that fall short of the possible points are areas ripe for improvement.
For civil society to flourish, we need state laws that promote, rather than inhibit institutions of civil society. The Index tells the story of where we are and offers hope that we can continue to make progress toward a legal landscape in which these cornerstone institutions can thrive.