Debate Over Grants Rules Heats Up as Groups Lose Funds, Challenge Policy - Nonprofit Issues

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Published: 09/06/2005

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HHS Letter to Silver Ring Thing Suspending Funding

Links to DKT International legal documents in suit against U.S. AID

See our webpage on the Faith-based Initiative

Debate Over Grants Rules Heats Up as Groups Lose Funds, Challenge Policy

DKT International, a Washington-based charitable organization, has filed suit against the U.S. government over a grant condition that dictates organizations adopt a specific policy statement, while a second organization has lost federal funding as a result of a suit brought for noncompliance with grants rules for faith-based organizations. Both developments point to important issues in federal grants rules, the first challenging the degree to which government may dictate privately funded speech, the other demonstrating the practical problem of separating privately funded religious content from publicly funded programming.

DKT International has sued the U.S. Agency for International Development (USAID) to block its requirement that grantees adopt an organizational policy opposing prostitution and sex trafficking. DKT has refused to adopt the USAID policy, it explains, because such a policy would hinder its work to reach those most at risk of contracting HIV/AIDS, as well as being an unconstitutional coercion of speech by private individuals. As a result of this refusal, DKT lost a $60,000 grant to market condoms in Vietnam.

DKT manages contraceptive and family planning programs in 11 countries in Africa, Asia and South America. Its annual budget of $50 million serves 10 million couples, and its programs target those most at risk of contracting HIV/AIDS. A statement by DKT President Phillip Harvey lays out DKT’s objects to the USAID policy requirement as "further stigmatiz(ing) the very people we are trying to help…thus undermining the relationship of trust and mutual respect required to effectively conduct AIDS-prevention work." Harvey also explains the policy violates the First Amendment rights and integrity of affected organizations.

While the DKT case raises objections to government intrusion into private speech, another case involving a faith-based grantee raises the issue of intrusion of private, religious content into government-funded services. The U.S. Dept. of Health and Human Services (HHS) notified the abstinence-only program Silver Ring Thing (SRT) that it cannot draw down a $75,000 grant until it submits a plan to implement safeguards that ensure its publicly funded programs are free of religious content. Three months ago the American Civil Liberties Union (ACLU) filed a lawsuit against HHS alleging the Boston-based program used federal funds "to promote religious content, instruction and indoctrination." HHS conducted site visits to the program before suspending funding.

Federal regulations require that faith-based organizations provide religious programs at a separate time and /or location from publicly funded programs. It is unclear how or whether SRT will correct the problem, but a plan for doing so is due to HHS on Sept. 6. Joel Oster, a spokesman for the Alliance Defense Fund that represents the group, was quoted as saying, "Basically, they want us to change our accounting system." It would appear, however, that changes in bookkeeping methods would not address the broader issue of religious content in SRT programs.