Sneak Preview: USAID Changes Rules on Overseas Funding for Religious Organizations

July 12, 2016 | By Lily McManus | Post a Comment

cross-1244302(The following was excerpted from a recent article in the Federal Grants Development Handbook.) The U.S. Agency for International Development (USAID) recently updated its regulations relating to the ability of religious organizations to apply for USAID funds for overseas projects involving houses of worship and other religious structures. The change, USAID said, is intended to eliminate restrictions that were greater than those required by the First Amendment’s Establishment Clause, and allow applicants to receive USAID funding to rehabilitate structures used for inherently religious purposes in certain circumstances, especially when other funding streams are not available.

USAID announced the update to the Code of Federal Regulations (C.F.R.) in a June 29 Federal Register final rule, explaining that, as a result of the change, USAID provisions at 22 C.F.R. Part 205 will no longer prohibit USAID funds from being used for activities that are consistent with the Establishment Clause, which prohibits governmental action that “establishes” religion. The new rule, which becomes effective July 29, enables USAID to award overseas funding to applicants by stating that the agency “will consult with the U.S. Department of Justice if, in implementing a specific program involving overseas acquisition, rehabilitation or construction of structures used for explicitly religious activities, there is any question about whether such funding is consistent with the Establishment Clause.”

Under USAID’s previous rule, agency funds could be used for the acquisition, construction or rehabilitation of structures only to the extent that those structures were used for conducting eligible, non-religious activities under specific programs. When a structure was used partially for “inherently religious activities,” USAID funds could not exceed the cost of those portions of the acquisition, construction or rehabilitation that were attributable to eligible activities. Additionally, USAID funds could not be used for acquisition, construction or rehabilitation of a structure that a recipient or subrecipient of USAID funding used as its principal place of worship.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

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