On August 16, the White House released a report on barriers faith-based and community organizations face in participating in federal social service programs. The report was required by President Bush's January 29 Executive Order creating five federal Centers for Faith-Based and Community Initiatives. Following up on the release, the Pew Forum on Religion and Public Life held an event on August 17 with a panel of experts to react to the report. The panel provided a mixed reaction to the White House report, Unlevel Playing Field. The President's Executive Order created faith-based centers at the Departments of Justice, Labor, Education, Health and Human Services, and Housing and Urban Development. Each Center was to submit a report to the White House Office of Faith-Based and Community Initiatives, headed by John DiIulio who announced his resignation a day after the report was released. The report from each Center was to include an analysis of barriers to the "full participation of faith-based and other community organizations in the delivery of social services," a summary of technical assistance provided by the department to help in preparation of grant applications, and annual performance indicators and measurable objectives for department action. The report is to be released annually from now on. The White House report only covered the first reporting requirement – barriers to full participation. The administration has said that it plans a second report focused on recommendations for change. This report appears to lay the groundwork for regulatory rather than legislative changes to achieve the President's faith-based agenda. "It is not Congress, but these overly restrictive Agency rules that are repressive, restrictive... [They] unnecessarily and improperly limit the participation of faith-based organizations." (Page 14) Overall, the report appears to be a solution in search of a problem. The report obfuscates what constitutes a faith-based organization. It appears that the White House is referring to religious congregations, but the report does not distinguish between congregations and their charitable affiliates, who are currently eligible for federal money. Moreover, the report seems to be based on very little data, possibly none from community-based organizations or grantees. HUD did seek public comment, but no other agency did. According to the ACLU, which analyzed the comments HUD received, only one of the 130 respondents expressed support for Bush's faith-based initiative. The "data" from the White House report largely differs from a survey on nonprofits conducted by OMB Watch, Advocacy Institute, National Committee for Responsive Philanthropy, and The Union Institute last September. Roughly 1,000 nonprofits from every state except one responded to the survey, which was focused on recommendations to the incoming President on federal changes needed to strengthen the nonprofit sector. With regards to full participation in federal programs, they highlighted three broad areas, two of which are not covered by the White House report. The survey indicated that nonprofits want more accountability, more resources, and streamlining of the grants process. The White House report moves in the wrong direction on accountability by suggesting that grantees need not be 501(c)(3) organizations, which already have a system of accountability. The report does not address the need for more money, such a providing core support to grassroots organizations to build their capacity and make them more competitive. On streamlining the grants process, the report address reducing grant application burdens, but does not address the other issues that nonprofits said are problems – reimbursement speed to smaller groups, grant reporting requirements, uniformity and simplification in all financial reporting (e.g., IRS 990, audits, grant reports). Moreover, the White House report did not reach out to other existing data. For example, the National Association of Community Action Agencies found in a survey of community action agencies that 40% contract with faith-based organizations to deliver services. This subgrant relationship with federal grantees is not acknowledged in the report. Barriers to Participation The White House report identifies 15 barriers to participation, the first six of which are specific to faith-based organizations: 1. A pervasive suspicion about faith-based organizations. The report that there is an "overriding perception by Federal officials that close collaboration with religious organizations is legally suspect." 2. Faith-based organizations excluded from funding. There are some examples where religious organizations are prohibited from applying for funding. The report documents inconsistencies from program to program about who is eligible for funding. 3. Excessive restrictions on religious activities. "Federal grant programs can be inappropriately restrictive", requiring "faith-based providers to endure something akin to an organizational strip-search." The report gives an example of local pressure to remove or cover up religious art, symbols, and other items when a Head Start program is located in a house of worship. 4. Inappropriate expansion of religious restrictions to new programs. The report argues that federal departments rely on outdated case law in making decisions about participation of religious groups. 5. Denial of faith-based organizations' established right to take religion into account in employment decisions. The report makes a legal argument that faith-based organizations that get federal funding should be permitted to discriminate on the basis of religion when hiring employees. Other types of discrimination – race, color, national origin, gender – should not be permitted. 6. Thwarting charitable choice: Congress' new provision for supporting faith-based organizations. The report argues that HHS and DOL have done an inadequate job in implementing Charitable Choice legislation that has previously passed. 7. The limited accessibility of federal grants information. The report states that while most agencies announce grant availability in the federal register, it is "not everyday reading for small faith based and community groups." 8. The heavy weight of regulations and other requirements. There is a "dizzying array of statutory and regulatory requirements" that federal grantees face. While this may be true, federal regulations are generally developed to ensure accountability and for the safety of those receiving services. 9. Requirements to meet before applying for support. Grantees must have an "extensive financial and administrative management system." Organizations must already have an approved indirect cost rate before applying for grants, excluding many possible grantees. (OMB Watch note: this is factually inaccurate.) 10. The complexity of grant applications and grant agreements. The report does not talk about the inconsistency in grant applications from department to department or program to program or from federal to state and local forms. Rather, the report notes grant applications are "repetitive and overly long, stating eligibility and other requirements more than once, lifting technical language directly from the authorizing statute, and including information from the legislative history that is only marginally pertinent..." 11. Questionable favoritism for faith-based organizations. There is an occasional bias towards faith-based organizations. In some cases, agencies have only opened grants to faith-based service providers. 12. An improper bias in favor of previous grantees. The report states that organizations that have already been awarded a grant in the past are favored in future grant applications. It points out that much of this "favoritism" exists because organizations that have already been awarded a grant are likely to know program officers, and know where to find future grant announcements. 13. An inappropriate requirement to apply in collaboration with likely competitors. The report states that requiring grantees to coordinate their services "can be an important way to ensure that Federal funding achieves maximum results", but then goes on to say that coordination can also force organizations to work with competitors for the same grants. 14. Requiring formal 501(c)(3) status without statutory authority. The report implies that since there is no statutory requirement that an organization be a tax exempt organization, there should be no need to require charitable 501(c)(3) status. It is indirectly suggested that articles of incorporation or even "demonstrating that the organization provides services in the public interest and uses its net proceeds to improve or expand such services" might be adequate. 15. Inadequate attention to faith-based and community organizations in the federal grants streamlining process. In legislation passed in 1999, Congress directed all major federal grant making agencies to simplify and improve the grants process. The report states that insufficient outreach has been made to community and faith-based organizations in the reform process. Pew Forum While participants at the Pew Forum noted the report provided some helpful commentary, most were quite critical of it. On the positive side, some people noted that it would be very useful for the government to develop uniform definitions for faith-based eligibility in various grant programs. But even one faith-based organization, the Abyssinian Development Corporation, noted that they receive federal funds and do not find the rules too onerous, but even if they were, the regulations are intended to protect against fraud and improve service quality. One participant, Rev. Stephen Burger of the International Union of Gospel Missions, was supportive of the President's faith-based initiative. He strongly advocated the move to simplify regulations imposed on grantees to make it easier for faith-based organizations to participate. Richard Foltin of the American Jewish Committee provided a strong rebuttal to the White House report, highlighting the dangers of H.R. 7, the charitable choice bill that passed the House. None of the participants opposed faith-based funding. However, most opposed the methods suggested in the White House report. Gary Bass of OMB Watch noted the bias in the White House report. One example: in discussing the Financial Assistance Awards Database System (FAADS), which provides information about recipients of government grants, the report states, "the database on discretionary grants do not provide any such identifiers [on whether the grantees is a faith-based or community-based organization] (another indicator of systemic discrimination). (Page 4, italics added.) Yet there was no list of indicators of discrimination. This hardly seems to be a smoking gun. Ironically, if the FAADS database were linked to the exempt organization taxonomy used by IRS for 501(c)(3) organizations, then types of organizations would be known. The irony is that the report calls for grantee eligibility to be broader than 501(c)(3) organizations. The report also makes bold unsubstantiated statements. For example, "there is a striking disjunction between the service organizations that Federal grant funds predominately support and the organizations that actually provide most of the critical social services." This slam of federal grantees has no data to support it and serves as a core assumption for shifting federal support to faith-based organizations. Final Comments The report does not address the inconsistency in administration policy. For example, the administration has issued a rule that prohibits international organizations that receive federal grants from using private funds for discuss family planning issues. Yet, under the faith-based initiative, they would permit commingling of private and public funds for religious social service activities. It is OMB Watch's belief that the receipt of federal funds does create a new obligation to comply with federal rules as applied to those federal funds. Creating exceptions for faith-based organizations will create situations were some nonprofits receive differing treatment. If the White House pursues its course, it will result in the title of this recent report, an Unlevel Playing Field.