Summary
Faith-based organizations, including churches, mosques, synagogues, and other religious entities, are eligible to compete for most federal grant programs on the same basis as secular nonprofits, provided the funded activities are non-sectarian in nature. The White House Office of Faith-Based and Neighborhood Partnerships and its agency counterparts have worked for decades to ensure equal treatment. Understanding the rules governing federally funded programs is essential to successful grant management for religious organizations.
Legal Framework: Equal Treatment for Faith-Based Organizations
Federal regulations dating back to President George W. Bush's faith-based initiative and reinforced through subsequent administrations establish that faith-based organizations cannot be discriminated against solely because of their religious character when competing for federal grants. This applies across HHS, USDA, HUD, DOJ, DOL, and other federal agencies. Religious organizations may participate in federal programs without removing religious art, icons, or symbols from their facilities.
However, there are important rules governing federally funded activities themselves. Federal funds cannot be used for inherently religious activities such as worship, religious instruction, or proselytization. These activities must be privately funded and offered separately (in time or location) from federally funded services. Beneficiaries of federally funded social services must not be coerced to participate in religious activities. Additionally, some funding streams, particularly those from certain HHS programs, include non-discrimination requirements that may conflict with the employment practices of some religious organizations. Organizations should review the specific requirements of any grant they pursue and consult legal counsel familiar with faith-based funding rules.
HHS Programs Open to Faith-Based Organizations
The Department of Health and Human Services represents the largest source of federal grant funding for social services, and faith-based organizations are active participants. Key HHS programs accessible to religious organizations include:
- Community Services Block Grant (CSBG): Distributed through state community action agencies, CSBG funds anti-poverty programs including food assistance, emergency services, job training, and financial literacy. Many state CSBG networks include faith-based organizations as eligible subgrantees.
- Older Americans Act Programs: The Administration for Community Living funds congregate meal programs, home-delivered meals, and caregiver support. Many faith communities that operate senior centers or meal programs can receive funding as local Area Agency on Aging subcontractors.
- Refugee Resettlement: The Office of Refugee Resettlement (ORR) funds resettlement agencies, many of which are faith-based, to provide housing, employment assistance, and social services to newly arrived refugees. Organizations seeking to become resettlement agencies must affiliate with one of the national voluntary agencies (VOLAGs).
- Runaway and Homeless Youth: The Family and Youth Services Bureau funds shelters and transitional housing programs for youth, and faith-based organizations with relevant facilities are eligible applicants.
USDA Rural Programs for Rural Faith Communities
In rural areas, churches often serve as anchor community institutions, and USDA Rural Development has several programs that faith-based organizations can access. The Community Facilities Direct Loan and Grant Program funds essential community facilities — a category that explicitly includes community support service buildings. A rural church that provides social services to the community may be eligible for funding to construct or improve its facility if those services are demonstrated to be essential to the community.
The USDA's Rural Community Development Initiative (RCDI) funds capacity-building for nonprofits, low-income communities, and federally recognized tribes. Religious organizations that operate community development programs may qualify. USDA Rural Development also administers the Rural Energy for America Program (REAP), which provides grants and loan guarantees for renewable energy systems and energy efficiency improvements — applicable to faith-based organizations with rural facilities that want to reduce energy costs while improving their facilities. USDA's Food and Nutrition Service programs, including CACFP (Child and Adult Care Food Program), allow faith-based organizations operating childcare, afterschool, or adult day care programs to receive reimbursements for eligible meals and snacks served to participants.
Community Development Block Grants and Local Funding
HUD's Community Development Block Grant (CDBG) program allocates approximately $3.3 billion annually to local governments for community development activities. Local governments then decide how to spend CDBG funds within federal parameters. Many municipalities use CDBG to fund social service organizations, including faith-based nonprofits, through competitive subgrant programs. Activities must principally benefit low- and moderate-income persons, address slum and blight conditions, or meet an urgent community need.
Faith-based organizations should contact their city or county Community Development office to learn about local CDBG subgrant opportunities. Application timelines vary by jurisdiction but typically open once per year. HUD also funds the Emergency Solutions Grant (ESG) for homeless shelter and prevention services and the Continuum of Care program for supportive housing — both of which often include faith-based organizations as subrecipients or project sponsors. Organizations that have not previously participated in federal grants should begin by attending a pre-application workshop or technical assistance session offered by the local CDBG administrator, as these programs involve detailed compliance requirements including Davis-Bacon wage rates for construction projects and uniform administrative requirements for financial management.
Getting Ready to Apply: SAM Registration and Organizational Capacity
Before applying for any federal grant, faith-based organizations must register in the System for Award Management (SAM.gov) and obtain a Unique Entity Identifier (UEI). Registration is free and must be renewed annually. Organizations also need a recognized tax-exempt status, typically 501(c)(3), though some congregations qualify through a group exemption under their denomination. Having current financial statements, a board of directors with conflict-of-interest policies, and documented accounting procedures are all prerequisites for federal grant management.
First-time applicants should strongly consider starting with a subgrant from a local intermediary (such as a United Way, Community Action Agency, or established nonprofit) rather than applying directly for federal competitive grants. Subgrants typically have simpler compliance requirements while building the organizational capacity and track record needed for direct federal awards. The White House Office of Faith-Based and Neighborhood Partnerships maintains resource guides and can connect organizations with agency faith-based liaisons who provide technical assistance to help religious organizations navigate the federal grant system.