'Charitable' Discrimination: Why Taxpayers Should Not Have to Fund 501(c)(3) Organizations that Discriminate Against LGBT Employees

Abstract:     
Until now, the first amendment protection of religious liberty has allowed - and even publicly funded - discrimination against LGBT employees, but this article argues that Christian Legal Society v. Martinez changes that analysis. According to Bob Jones University v. United States, organizations that base admissions decisions on racial discrimination violate public policy and cannot receive taxpayer funding. Similarly, Christian Legal Society v. Martinez shows us that universities do not have to fund student organizations that discriminate on the basis of sexual orientation. Therefore, because discrimination based on an immutable minority trait bars taxpayer funding in one instance, this article argues it should also in the other. Private organizations will continue to be allowed to discriminate, but if they do, they should no longer receive public funding through tax-exempt status, taxpayer-funded federal loans, and tax-deductible donations.

The first section of this article explains how and why the tax-exempt status for charitable organizations came about in the United States. Section two applies the original intent of charitable tax-exempt status to LGBT employment discrimination. The third section offers a public policy analysis regarding why equal protection should at least be balanced equally with religious liberty when interests conflict. The fourth section analyzes the case law regarding discrimination and tax-exempt status and shows how Christian Legal Society in particular evolves the debate. The fifth and final section offers analogies of how other countries handle constitutional conflicts regarding equal protection and religious freedom.

Number of Pages in PDF File: 29

Keywords: employment, discrimination, lgbt, glbt, tax, 501(c)(3), religious liberty, religion, charity, tax-exempt

Accepted Paper Series