[House Hearing, 107 Congress] [From the U.S. Government Publishing Office] THE ROLE OF COMMUNITY AND FAITH-BASED ORGANIZATIONS IN PROVIDING EFFECTIVE SOCIAL SERVICES ======================================================================= HEARING before the SUBCOMMITTEE ON CRIMINAL JUSTICE, DRUG POLICY AND HUMAN RESOURCES of the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS FIRST SESSION __________ APRIL 26, 2001 __________ Serial No. 107-69 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house http://www.house.gov/reform U.S. GOVERNMENT PRINTING OFFICE 79-973 WASHINGTON : 2002 ________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 COMMITTEE ON GOVERNMENT REFORM DAN BURTON, Indiana, Chairman BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California CONSTANCE A. MORELLA, Maryland TOM LANTOS, California CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania STEPHEN HORN, California PATSY T. MINK, Hawaii JOHN L. MICA, Florida CAROLYN B. MALONEY, New York THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington, MARK E. SOUDER, Indiana DC JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio BOB BARR, Georgia ROD R. BLAGOJEVICH, Illinois DAN MILLER, Florida DANNY K. DAVIS, Illinois DOUG OSE, California JOHN F. TIERNEY, Massachusetts RON LEWIS, Kentucky JIM TURNER, Texas JO ANN DAVIS, Virginia THOMAS H. ALLEN, Maine TODD RUSSELL PLATTS, Pennsylvania JANICE D. SCHAKOWSKY, Illinois DAVE WELDON, Florida WM. LACY CLAY, Missouri CHRIS CANNON, Utah ------ ------ ADAM H. PUTNAM, Florida ------ ------ C.L. ``BUTCH'' OTTER, Idaho ------ EDWARD L. SCHROCK, Virginia BERNARD SANDERS, Vermont ------ ------ (Independent) Kevin Binger, Staff Director Daniel R. Moll, Deputy Staff Director James C. Wilson, Chief Counsel Robert A. Briggs, Chief Clerk Phil Schiliro, Minority Staff Director Subcommittee on Criminal Justice, Drug Policy and Human Resources MARK E. SOUDER, Indiana, Chairman BENJAMIN A. GILMAN, New York ELIJAH E. CUMMINGS, Maryland ILEANA ROS-LEHTINEN, Florida ROD R. BLAGOJEVICH, Illinois JOHN L. MICA, Florida, BERNARD SANDERS, Vermont BOB BARR, Georgia DANNY K. DAVIS, Illinois DAN MILLER, Florida JIM TURNER, Texas DOUG OSE, California THOMAS H. ALLEN, Maine JO ANN DAVIS, Virginia ------ ------ DAVE WELDON, Florida Ex Officio DAN BURTON, Indiana HENRY A. WAXMAN, California Christopher A. Donesa, Staff Director and Chief Counsel Amy Horton, Deputy Staff Director Conn Carroll, Clerk Denise Wilson, Minority Professional Staff Member C O N T E N T S ---------- Page Hearing held on April 26, 2001................................... 1 Statement of: DiIulio, John J., Jr., director, White House Office of Faith- based and Community Initiatives, accompanied by Don Eberly, deputy director, White House Office of Faith-based and Community Initiatives; Carl Esbeck, director, Department of Justice Center; and Don Willett, associate director of Office for Law and Public Policy........................... 17 Humphreys, Katie, secretary of the Indiana Family and Social Services Administration; Debbie Kratky, client systems manager, Work Advantage; Loren Snippe, director, Ottawa County Family Independence Program; Donna Jones, pastor, Cookman United Methodist Church; Bill Raymond, president, Faithworks Consulting Service; and Donna Jones Stanley, executive director, Associated Black Charities............. 44 Letters, statements, etc., submitted for the record by: Barr, Hon. Bob, a Representative in Congress from the State of Georgia, prepared statement of.......................... 12 DiIulio, John J., Jr., director, White House Office of Faith- based and Community Initiatives, prepared statement of..... 22 Humphreys, Katie, secretary of the Indiana Family and Social Services Administration, prepared statement of............. 46 Jones, Donna, pastor, Cookman United Methodist Church, prepared statement of...................................... 74 Kratky, Debbie, client systems manager, Work Advantage, prepared statement of...................................... 58 Lynn, Barry W., executive director, americans United for Separation of Church and State, prepared statement of...... 103 Raymond, Bill, president, Faithworks Consulting Service, prepared statement of...................................... 79 Snippe, Loren, director, Ottawa County Family Independence Program, prepared statement of............................. 66 Souder, Hon. Mark E., a Representative in Congress from the State of Indiana, prepared statement of.................... 4 Stanley, Donna Jones, executive director, Associated Black Charities, prepared statement of........................... 92 THE ROLE OF COMMUNITY AND FAITH-BASED ORGANIZATIONS IN PROVIDING EFFECTIVE SOCIAL SERVICES ---------- THURSDAY, APRIL 26, 2001 House of Representatives, Subcommittee on Criminal Justice, Drug Policy and Human Resources, Committee on Government Reform, Washington, DC. The subcommittee met, pursuant to notice, at 2:45 p.m., in room 2247, Rayburn House Office Building, Hon. Mark E. Souder (chairman of the subcommittee) presiding. Present: Representatives Souder, Gilman, Mica, Barr, Cummings, and Davis of Illinois. Also present: Representatives Scott and Edwards. Staff present: Chris Donesa, staff director; Conn Carroll, clerk; Amy Horton, deputy staff director; Tony Haywood, minority counsel; Denise Wilson, minority professional staff member; and Lorran Garrison, staff assistant. Mr. Souder. The subcommittee will now come to order. Good afternoon and thank you all for coming. I'm pleased to convene this preliminary hearing today to examine the existing and potential role of community and faith-based organizations in providing effective social services. I'm also honored to have a host of exceptional witnesses from the White House to inner city America. I expect these witnesses will provide valuable insights on the state of certain social services as well as how the government can best promote and assist a diversity of organizations, secular and sectarian alike, in helping people in need. At minimum, I believe government must not only allow but demand that the best resources this Nation possesses are targeted to help people who face the greatest daily struggles. We must embrace new approaches and foster new collaborations to improve upon existing social programs. Faith and community initiatives are, by no means, the complete answer in reaching all in people in need. Rather, they offer a new dimension in that service, a core of people noted in many cases by their faith who are ready, willing and able to help their neighbors around the clock. I believe that we cannot begin to address the social demands of this Nation without unbridled assistance of grassroots, faith and community initiatives. My goal in calling this preliminary hearing is threefold: To examine the administration's efforts to assess regulatory barriers that hinder faith and community-based organizations from participating in social service programs; to explore State and local initiatives to include these grassroots groups in the delivery of services; and to learn from service providers and intermediaries about their experiences employing public funds to assist people in need. This hearing is not about whether faith-based organizations should be involved in helping those who are hurting. I hope members will keep their comments and questions in that context and not vary into the political debate behind this. Indeed, the Constitution Subcommittee of the Judiciary Committee held a hearing on the Constitutionality of this on Tuesday. This hearing is to debate the impacts and how it's being done, not the substance underlying that. We'll certainly debate that in the authorizing committees and appropriations, and probably in future hearings in this committee. The role of the faith community in providing publicly funded social services on an equal basis as secular providers has been the topic of considerable public policy debate in recent years. Although faith groups have been assisting scores of people in need for decades, recent charitable choice provisions encourage an even larger role. The watershed event, the 1996 Welfare Reform legislation, first included full blown charitable choice language in Federal law, applying it to the newly established Temporary Assistance for Needy Families [TANF], block grant programs. Subsequently, charitable choice language was included in welfare-to-work formula grants added to TANF the following year. These provisions established a new paradigm for collaboration between government and nongovermental organizations in serving people in need. The new model affords an equitable approach in awarding government contracts. Faith- based service providers could compete for government grants on the same basis as other providers. Consequently, organizations providing the most effective services, regardless of their character, would be awarded grants to assist people in need. In addition, charitable choice provisions affirmed that faith- based organizations could retain their religious character and employ their faith in implementing social service programs. Charitable choice provisions have been extended by law to other programs since welfare-to-work formula grants in 1997, in 1998 to the community services block grant, to substance abuse services under the Children's Health Act, and to prevention and treatment of substance abuse services under part of a Consolidated Appropriations Act. Congress has repeatedly endorsed charitable choice during its consideration of a variety of bills. In the 106th Congress, charitable choice provisions were included in legislation related to juvenile justice, home ownership, child support, youth drug services, family literacy service and fatherhood grants under TANF. Aside from this congressional support for charitable choice, the highest ranks of the executive branch have also rallied around the concept. In 1997, former HUD Secretary Cuomo launched the Center for Community and Interfaith Partnerships directed by Father Joseph Hacala. Secretary Cuomo recognized that community and faith-based organizations are ``the voice of conscience in the struggle for economic rights.'' He believed they are integral components of the equation to address critical social needs saying: ``Our challenge is to engage partners in a new way to support the critical housing and community development efforts of community and faith-based organizations. Government cannot do this alone''--this is Secretary Cuomo--``community and faith-based organizations cannot do this alone, but together by combining our strategies, resources and commitment we can build communities of opportunity and bring economic and social justice to our Nation's poorest neighborhoods.'' Former Vice President Al Gore, while on the Presidential campaign trail, also endorsed the inclusion of faith-based organizations in social service programs in speeches and on his Web site, and President George W. Bush's proactive leadership in promoting the practice in Texas and now from the White House has been unparalleled. On January 29, 2001, President Bush executed two Executive orders related to the community and faith-based organizations in providing social services. The second established an office of faith-based and community initiatives in the White House. The first created similar centers in each of the five cabinet Departments: Education, Health and Human Services, Housing and Urban Development, Justice and Labor, and this subcommittee has oversight jurisdiction over the Office of Faith-based at the White House as well as the Departments of Education, Health and Human Services, Housing and Urban Development, and Justice. The purpose of the executive department centers is to coordinate department efforts to eliminate regulatory contracting and other programmatic obstacles to the participation of faith-based and other community organizations in the provision of social services. In order to accomplish this purpose, each center will conduct a department-wide audit to identify existing barriers and remove them. Each of the five department centers must report to the Office of Faith-based and Community Initiatives by the end of July. Given the level of legislative and executive interest in incorporating grassroots faith and community organizations in social service programs, we must fully consider the current and future role of these groups, learn the facts as we go into the debate. I believe this hearing will provide a preliminary assessment of these questions. I now yield to the distinguished ranking member, Mr. Cummings of Maryland, for an opening statement. [The prepared statement of Hon. Mark E. Souder follows:] [GRAPHIC] [TIFF OMITTED] T9973.001 [GRAPHIC] [TIFF OMITTED] T9973.002 [GRAPHIC] [TIFF OMITTED] T9973.003 Mr. Cummings. Thank you very much, Mr. Chairman. I want to say for the very beginning, I am the son of two ministers, and Mr. Chairman, faith-based and community based organizations have always been at the forefront in combating the hardships facing families and communities. As a Democrat, I do not have problems with government finding ways to harness the power of faith-based organizations. Many of these organizations have long been involved in tackling social ills such as drug addiction, juvenile violence and homelessness. However, I do not believe that faith-based programs should replace government programs, use taxpayer money to proselytize or engage in racial, gender or religious discrimination. Few would argue the good works that many religious and community-based organizations provide. In my own congressional district in Baltimore, churches, nonprofits and others, serve up hot meals to the hungry, offer shelter to the homeless, provide a safe harbor for victims of domestic violence and counselling to those suffering from drug addiction. Faith-based and community-based agencies are active in my neighborhood and yours. They are not and never have been strangers to the raw needs of people and communities in need. While I applaud faith-based organizations for their good works, I do not believe that charitable choice is the method by which we should lend our support. Charitable choice distracts from the real issue of providing much needed Federal funds and resources to address the problems of poverty, crime and drug addiction. Under the current administration proposal to expand charitable choice, I have a real and valid fear that we will wind up diverting funds away from public agencies and current nonprofit providers. This will undermine current programs and create a smoke screen by seemingly doing more with less. I believe that charitable choice will pit religious, secular, nonprofit and public agencies against each other in a competition for declining share of Federal dollars for social service programs. I also believe that under charitable choice, there is a fundamental incompatibility between the government's duty to taxpayers for accountability in the use of Federal funds and the need for religious organizations to maintain their independence and religious character. Further, charitable choice mixes government and religion in a way that will allow religious discrimination in federally funded programs. It puts the government in the business of picking and choosing among religions for Federal grants and contracts. This raises serious questions about preferential treatment for one religion over another. How in the world do we decide who is in or out, good or bad? I continue to be troubled over the fact that charitable choice allows churches to limit their hiring to people of their own faith and people who follow their teachings in programs that receive Federal money. Religious discrimination in hiring for programs funded with Federal dollars just does not sit well with me. As the former ranking member of the Subcommittee on Civil Service, I'm extremely sensitive to the plight and treatment of Federal workers and working people in general. Consequently, I am concerned that charitable choice creates loopholes or gaps in Federal protection for workers. Can workers organize and engage in collective bargaining? Will they be subject to the Federal unemployment tax and receive unemployment benefits if they become unemployed? All of these issues beg to be looked at in depth and I'm sure we will. Looming heavy over all of my concerns and problems with the expansion of charitable choice is the issue of accountability and the glaring lack of research and study. From where I sit and from what I have observed, many people assume that faith- based programs work, and that they work better than Federal social service programs. My friends, we just do not have the independent and in- depth research to support such views. Last year the National Institute on Drug Abuse, in response to misinformation linking faith-based drug treatment programs to a 60 to 80 percent cure rate, stated there's not enough research in the treatment portfolio for the NIDA to make any valid conclusive statements about the role that faith plays in drug addiction treatment. We are not aware of research from any treatment program that has been peer reviewed or published that can attribute a 60 to 80 percent cure rate to faith as a major factor for a group's treatment success, end of quote. Indeed, 3 years ago, the General Accounting Office report on drug abuse and treatment, requested by Representatives Gingrich and Hastert and Charles Rangel, concluded that other treatment approaches to drug abuse, such as faith-based strategies, have yet to be rigorously examined by the research community. The report went on to conclude that research literature has not yet yielded definitive evidence to identify which approaches work best for specific groups of drug abusers. In a recent Associated Press article entitled ``Faith-based Battle on Capitol Hill,'' the AP writer asserts that DiIulio allows that there is scant evidence to support the contention that religious programs are more effective than secular ones. Finally, there was an article in Tuesday's New York Times newspaper quoting Professor Byron Johnson of the University of Pennsylvania Center for Research on Religion and Urban Civil Society. Professor Johnson, along with other social scientists, says that there's little reliable research proving the effectiveness of religious programs. There seems to be scant evidence showing which religious programs show the best results and how they stack up against secular programs. Mr. Chairman, given that charitable choice was first added to the welfare reform measure adopted in 1996 and that four charitable choice measures have been enacted into law, I believe it is time to review how well charitable choice is working. Today, I will request that GAO, the investigative arm of the Congress, begin an indepth review and oversight of charitable choice: The program, States currently engaged in the charitable choice, faith-based organizations receiving money, a look at who is and who is not being served, program accountability, contract award processes, and whether or not the services provided are successfully serving the needs of the people. I am anxious to learn who is currently utilizing faith- based organizations, learn of their value and see how well they measure against secular programs. Mr. Chairman, I'm also pleased that Congressman Bobby Scott and Chet Edwards have joined us today, and I thank you all for being here, and I wish to thank all of the witnesses who will testify, and again, thank you for holding this hearing. Mr. Souder. Thank you. Mr. Mica of Florida, the immediate past chairman of the subcommittee, I yield to you for an opening statement. Mr. Mica. Thank you, Mr. Chairman, and thank you for first taking on the legislative oversight responsibility for the faith-based initiative and also for conducting this first congressional hearing, at least on the House side that I know of, on the issue and maybe in Congress. I'm a strong supporter of this initiative, basically, not based on any studies or reports, and even I think if we get GAO involved, GAO has a very difficult task ahead of itself trying to evaluate caring, love and faith, which I don't think fits into any of their parameters or would they be able to evaluate it. That's one of the missing ingredients from most of the government programs. But again, I don't speak and can't cite reports. I have heard some of the reports. Mr. Cummings and I've served together on Civil Service. He was a ranking member. We served on the Criminal Justice, Drug Policy and Human Resources Subcommittee together. So I've heard some of those reports, but I can tell you firsthand that I've seen in my own community education and drug treatment programs that have astounding results. They differ from the government programs because they have two ingredients that are different. They have very low administrative and bureaucratic overhead, and second, they're highly effective. I could just cite two examples: One is House of Hope, which is located in central Florida. It provides drug treatment, started out primarily for young women, has a 70, 80 percent success rate, and I would venture to say from any studies I saw as chair of Criminal Justice, Drug Policy and Human Resources Subcommittee, it's just the opposite of what the public programs produce in drug treatment effectiveness. Education is another area where we could do so much, and I have seen in my community a third of some of the public programs, well intended, and I'm a strong supporter, for example, of Head Start, but community faith-based programs, and I have them in central Florida. I've one Catholic based education program with two administrators for 16,000 students. Their preschool programs are far superior to anything offered by the government programs and at a third to a fourth of the cost, and also with the infusion of caring, love and faith, and a success rate that far surpasses any that are now offered to our disadvantaged. Poverty, crime and drug addiction can all benefit from our support of these faith-based initiatives. And faith-based organizations, I believe, are now being discriminated against. People with faith also pay taxes, and people who pay taxes should be entitled to have some of their public money spent on programs that are successful as opposed to those government programs that are unsuccessful, and I think we can evaluate these programs simply by their effectiveness. And I wouldn't support any faith-based services that discriminate in any way, but I think there are plenty of examples and there's plenty of experiences without spending tons of money on study and reviews of successful organizations that provide faith-based service and, again, a meaningful and successful manner. So I support this initiative, look forward to the hearing and thank you for this initiative. Mr. Souder. Thank you. Mr. Davis of Illinois. Mr. Davis of Illinois. Thank you very much, Mr. Chairman, and let me thank you for holding this hearing to initiate the discussions. Obviously, this issue that we deal with this afternoon is going to be one of the great debates of the year, and I think it's certainly time that we got started. I think the concept of faith as a part of treatment modalities in various human service and social service programs have been with us for a long time, and so I personally am a strong supporter of the concept of faith. As a matter of fact, practically all the communities that I've lived in and spent a great deal of my time working in as both an adult as well as before I became an adult relied very heavily upon the concept of faith. As a matter of fact, as an African American, I remember the song that we sing as part of our national anthem. It says sing a song full of the faith, and so faith has been an integral part of the movement of many different groups and groups of people in this Nation. I certainly hope that we can answer some of the questions that I have about the initiative. For example, I'm very much concerned to know whether or not we're talking about some additional money. I think it's good to have faith, but when you add faith with resources, and provide faith with greater opportunity to work, then I think faith reaches another level. I'm going to be concerned to understand whether or not we can establish program modalities and treatments in such a way that we can absolutely assure that there will be no discrimination against different individuals because of their own concepts and notions about faith. And so I look forward to the hearing. I look forward to the testimony of all those who will participate and again, Mr. Chairman, I thank you for initiating this activity because I think this committee is probably going to be one of the most interesting subcommittees in Government Reform or in any other area that we will experience this session. Mr. Souder. Thank you. Mr. Barr. Mr. Barr. Thank you, Mr. Chairman. Mr. Chairman, if America understood the first amendment the way it was intended, we wouldn't have to have this hearing today, because it wouldn't be an issue of whether or not institutions that believe in the power of God can participate in the public life of America, having been done so--would be doing so for the last 200 and 20-some-odd years. The first amendment, as crafted by James Madison, not only was never intended to be a barrier between any religious activity in the public facets of our society, but was intended to preserve that union. It was certainly, as we all know, intended to prohibit the forcing of any particular religion on any individual or any group. But to have the complete focus of the first amendment in terms of freedom of religion changed as it was fundamentally in the Supreme Court decision in 1947, which has been, I believe, misinterpreted many times since then, does indeed bring us to the strange point that we have to have hearings and a great deal of controversy over whether or not institutions of proven effectiveness in State after State after State over so many years, in helping to solve the social ills of our society, is something that seems alien and adversarial to some Members of Congress, and certainly a number of judges. But I salute President George W. Bush as both a man of faith and man of understanding our Constitution, in one of his first acts as President, in recognizing and trying to restore the first amendment to its proper role, and that is, not as something that prohibits the use of faith-based institutions in our public life, but rather, something to be encouraged so long as all of us are very mindful to not use religion officially to force a particular belief. Churches, mosques, synagogues, all across this great land, have known the secret of solving the problems that face our society for generations. It is faith and turning to God. And we now have a President that recognizes that, and I think this will open up many, many new and very productive avenues for solving and helping to solve the problems that afflict our society. And I appreciate, Mr. Chairman, your convening this hearing today to begin to put back into proper focus the role of religion in the public life of the greatest Nation on the face of the earth. Thank you. [The prepared statement of Hon. Bob Barr follows:] [GRAPHIC] [TIFF OMITTED] T9973.004 [GRAPHIC] [TIFF OMITTED] T9973.005 Mr. Souder. Mr. Gilman. Mr. Gilman. Thank you, Mr. Chairman. I want to take this opportunity to welcome the witnesses and thank them for taking the time from their busy schedules to discuss the role of community and faith-based organizations in providing effective social services. Faith-based organizations play a vital role in our communities, all of whom work tirelessly toward effectively meeting the needs of these communities. These organizations cover all religions and range from family counseling to community development, to homeless and battered women's shelters, to drug treatment and rehab programs, and to saving our at risk children. Our community, faith-based organizations deserve our thanks and our praise that, in many cases, they are the only organizations which have taken the initiative to provide a much needed community service. In other words, not only do they live and work in the communities that they serve but they know their neighbors and understand their individual needs and circumstances. No one can dispute the great work of our faith- based organizations in compassion, the duty to serve and devotion to helping one's fellow human beings should be cherished and supported as these qualities are common to all religions and transcend partisan politics. I welcome this opportunity to learn from those who serve on the front lines of their communities and can share their personal experiences with us in how faith-based organizations have effectively served in the past, and I look forward to the testimony of today's witnesses to hear your thoughts on how best our government can support your humanitarian work in faith-based, community-based organizations and strive for the betterment of our communities. We thank our witnesses for being here, and thank you, Mr. Chairman. Mr. Souder. Thank you. I, for the record, wanted to say Congresswoman Davis joined this subcommittee partly because she--mostly because she was interested in this issue. She's having to chair another hearing downstairs and hopes to be up part way through, but didn't have an opening statement. Two of my friends who have worked on this issue, even though we've been on the opposite side of many of these debates, but it's great to have it during the day rather than the middle of the night. Congressman Scott and Congressman Edwards, and I've asked them if they would like to have an opening statement as well. Congressman Scott would you like to? Mr. Scott. Thank you, Chairman Souder and Ranking Member Cummings and I'd like to thank you for holding this hearing on the issue of the role of the community and faith-based organizations, and specifically charitable choice, and I'd like to thank you particularly for inviting me and the gentleman from Texas to participate today. First of all, I'd like to say that support for funding for faith-based programs in general should not be confused with the specific legislative proposal called charitable choice. Under current law, without charitable choice religiously affiliated organizations such as Catholic charities, Jewish federations, and Lutheran services can compete for and, in fact, now operate effective government-funded programs. In fact, there would be significant common ground on this issue if charitable choice were not included because those religiously affiliated organizations are free to compete for funds, just like other private organizations compete for funds, and they are funded like other private organizations are funded. That is, they are prohibited from using taxpayer money to advance their religious beliefs and are subject to all civil rights law. Charitable choice, however, specifically allows the sponsor of a government-funded program to promote religion during the program and to discriminate on employment based on religion when using taxpayer dollars. Mr. Chairman, notwithstanding the apparent prohibition against government funded proselytization, sectarian worship and instruction found in section 1994 A of H.R. 7, there is, in fact, no prohibition against proselytization, sectarian worship and instruction by volunteers during the program. In fact, the right to retain the religious character of the sponsor virtually guarantees that the program will promote religious views. Furthermore, unless religious views were being advanced during the program, it would be unnecessary to require alternative secular services elsewhere or to allow discrimination in employment. It's that provision allowing sponsors of federally funded programs to discriminate in employment based solely on religion that is particularly disturbing. Some of us are frankly shocked that we would even be having this debate. We remember that the passage of the civil rights laws in the 1960's was not unanimous, and it is clear that we are using charitable choice to redebate the passage of basic anti-discrimination laws. Publicly funded employment discrimination was wrong in the 1960's, and it is still wrong. Some have suggested that religious organizations should be able to discriminate employment to select employees who share their vision and philosophy. Under current civil rights laws, you can discriminate against a person based on their views on the environment, views on abortion or gun control. You can select staff based on their commitment to serve the poor, or whether you think they have the compassion to help others kick the drug habit. But under present laws without charitable choice, you cannot discriminate against an individual because of his race, sex, national origin or religion. There was a time when some Americans, because of their religion were not considered qualified for certain jobs. In fact, before 1960 it was thought that a Catholic could not be elected President, and before the civil rights laws of the 1960's, persons of certain religions were routinely suffering invidious discrimination when they sought employment. Fortunately, the civil rights laws of the 1960's put an end to that practice and outlawed schemes which allowed job applicants to be rejected solely because of their religious beliefs. Mr. Chairman, supporters of charitable choice have promised to invest needed resources in our inner cities, but it is frankly insulting to suggest that we cannot get those investments unless we turn the clock back on our civil rights. I, therefore, thank you, Mr. Chairman for holding this hearing and thank you again for your courtesy in allowing me and the gentleman from Texas to participate. Mr. Souder. Thank you. Mr. Edwards. Mr. Edwards. I want to thank you for your good faith and Mr. Cummings' graciousness in allowing two non-members of this subcommittee to participate and listen in this hearing. I want to compliment you also for holding this hearing, because while we have passed into law in three separate measures charitable choice legislation, the fact is that over those past 5 years, when we were doing so, it wasn't until this past week that we had the first House hearing on an issue, regardless of which side you're on--it's so important that Madison and Jefferson debated it for 10 years in the Virginia legislature--the question of the proper role between government and religion. Mr. Chairman and members, I believe the question before Congress is not whether faith-based groups can contribute to solving social problems. As a person of faith, I believe the clear answer to that question is yes. Rather, I believe the fundamental question before Congress is whether we should do something that our Nation has not done in over 200 years since the Bill of Rights became part of our law and, that is, to send Federal tax dollars directly into houses of worship, churches and synagogues as well. I hope, Mr. Chairman, in the process of this hearing today, there are five questions that perhaps will be answered by those testifying. One, will Federal Government agencies and auditors go in and audit annually the books of churches, synagogues and houses of worship that would be receiving these Federal tax dollars under charitable choice? Second, who in the Federal Government, deciding to whom to send charitable choice dollars, will be given the power to decide what is a religious group or not? What is a faith-based group or not? For example, we have a number of active participating, practicing Wiccans in my central Texas district. Will they be considered a faith-based group under the definition of this law? The third question I hope folks will address is the catch- 22 I see in this process. As a person of faith, I believe the very reason faith-based groups have been effective in so many cases in addressing social problems is because of their faith. I consider faith second to none in any type of power, political or otherwise, but the question is, if we agree under the law of this land you cannot proselytize with Federal tax dollars, are we then not taking the faith out of faith-based organizations, thus leaving organizations? Fourth, will groups be allowed to discriminate using Federal dollars? For example, a religion that sincerely believes that women should not be in the workplace, will they be allowed to take all of the taxpayer dollars of those of us in this room and say to women, you are perfectly qualified in every other way for this federally funded job, but we will not hire you because our religious faith respects that women should not be in the workplace? And finally, I hope a fundamental question this committee and our Congress can address is, is it necessary to pass new legislation? Is there anything wrong with having the requirement of setting up a separate 501(c)(3), whether it be a church, a synagogue, a house of worship, another faith-based group, and ask them to meet two standards: don't discriminate using tax dollars and don't proselytize using tax dollars. Thank you again, Mr. Chairman and Mr. Cummings, for your graciousness in letting us participate in this important hearing today. Mr. Souder. Thank you. And as has been said, this is about the most debate and extended debate we've had on this issue, and this subcommittee will continue to explore a number of the nuances in conjunction with other committees. Before proceeding, I would like to take care of some procedural matters. First, I ask unanimous consent that all Members have 5 legislative days to submit written statements and questions for the hearing record, that any answers to written questions provided by the witnesses also be included in the record. Without objection so ordered. Second I ask unanimous consent that the gentleman from Texas, Mr. Edwards and the gentleman from Virginia, Mr. Scott, who are not members of the committee be permitted to participate in the hearing and to question witnesses under the 5-minute rule in each round after all the members of subcommittee have completed their questions. Without objection so ordered. We now begin the first panel, which consists of Dr. John DiIulio, the director of the White House Office of Faith-based and Community Initiatives. We welcome you to the subcommittee, and as an oversight committee, it is our standard practice to ask all our witnesses to testify under oath. So if you will rise and raise your right hand, I'll administer the oath. [Witness sworn.] Mr. Souder. Let the record show that the witness responded in the affirmative. We now recognize Dr. DiIulio to outline some of his vision for the Department. STATEMENT OF JOHN J. DiIULIO, JR., DIRECTOR, WHITE HOUSE OFFICE OF FAITH-BASED AND COMMUNITY INITIATIVES, ACCOMPANIED BY DON EBERLY, DEPUTY DIRECTOR, WHITE HOUSE OFFICE OF FAITH-BASED AND COMMUNITY INITIATIVES; CARL ESBECK, DIRECTOR, DEPARTMENT OF JUSTICE CENTER; AND DON WILLETT, ASSOCIATE DIRECTOR OF OFFICE FOR LAW AND PUBLIC POLICY Mr. DiIulio. Thank you very much, Mr. Chairman, and thank you, Congressman Cummings and thank you other members of the committee for inviting me here. President Bush has outlined several interrelated objectives for faith and community initiatives. Let me just begin by briefly summarizing them. First, to increase charitable giving, both human and financial, both volunteer hours and charitable dollars. Second, to increase social delivery choices available to beneficiaries of social welfare programs that are funded in whole or in part by Washington. Third, to ensure that all community serving nongovernmental organizations that seek to administer Federal social programs are treated in a nondiscriminatory fashion and judged by their performance. And finally, to seed or expand model public private and religious secular programs that address acute but unmet civic needs. As President Bush noted in his February budget address to Congress, there are groups working in every neighborhood in America to fight homelessness and addiction and domestic violence and to provide a hot meal or a mentor or a safe haven for our children. So let me just briefly, quickly begin by saying that is certainly true everywhere I've been over the past 6 or 7 years looking at these groups and studying this issue and community- serving ministries all across this country. It is certainly true in my own hometown of Philadelphia where I, our great mayor, Major John Street, has promoted public private partnerships and religious secular programs through his own office of faith-based and voluntary action, programs in which neighborhood volunteers in grassroot congregations help each released prisoner who wants a job, to stay away from illicit drugs, to complete high school and so on, programs in which each of our 259 public schools is adopted by a local faith- based group to help solve such longstanding problems as low reading scores and high truancy rates and programs like Amachi, which is led by former Philadelphia mayor, the Reverend W. Wilson Goode. He is Philadelphia's favorite Dubya, by the way, and Amachi which is a West African word, I'm told that means: ``who knows, but what God has brought us through this child.'' What Amachi does is it mobilizes volunteers from faith-based organizations directly to serve as mentors whose fathers and mothers are both incarcerated. The rub of such programs has always been that it's difficult to mobilize the volunteers. The lead organization in this particular program is Big Brothers Big Sisters of America, which is the Nation's premier mentoring organization, secular mentoring organization, best practices mentoring organization. We know from the research that's been done, getting a loving, caring, well matched ``big'' into the life of a needy child cuts that child's chances of first time drug use in half, reduces aggressive or hitting behavior by a third, significantly improves school performance and has numerous other well documented positive social consequences, but again, the rub has always been with tens of millions of children who need mentors, the inability to mobilize them. And so what has happened with Reverend Goode and his Amachi team is that in just 6 weeks, they mobilized over 600 volunteers from local congregations, enlisting people with faith to mentor these children of promise, thereby doubling the number of Big Brothers Big Sisters matches in Philadelphia for this particular hard-to-serve population, making it the largest Big Brothers Big Sisters site in the entire Nation, and they have only really just begun. From north central Philadelphia to south central L.A., I could recite literally hundreds of inspiring anecdotes and stories about how people of sacred places working across racial, denominational and other divides, are achieving important civic purposes like those I just mentioned with respect to the Amachi program. But as my social science colleagues like to say, the plural of anecdote is not data. The good news, however, is that the best local and national data on faith-based and community initiatives all show that these inspiring anecdotes are the rule, not the exception. For example, based on 3-hour site visits and 20 page questionnaires, covering 215 different types of social services at each of over 1,000 Philadelphia congregations--I'm not talking about spotty phone surveys or slip shod inventories-- Professor Ram Cnaan of the University of Pennsylvania found that over 85 percent of the city's churches synagogues and mosques provided one or more community-serving programs. The very conservatively estimated value of what these programs provide in Philadelphia alone in a year is about a quarter billion dollars. And as has been found in all previous research of the same depth and breadth, the primary beneficiaries of these faith-based programs are needy neighborhood children, youth and families who are not members of the congregations or faith-based programs, whether they're storefront churches or run out of a basement, or what have you, that serve them. In fact, from the Cnaan data you can count on your fingers and toes the number of community-serving congregations and other faith-based organizations that make entering the buildings, receiving the services or participating in the programs in any way conditioned upon any present or eventual expression of religious faith or that require beneficiaries to participate in sectarian worship of any kind. Professor Cnaan calls these community serving faith-based organizations that partner often with secular organizations, and in the case of Philadelphia and so many other cities now with their city halls, he calls them America's hidden social safety net. Hidden perhaps, but no longer unheralded, not even by government. As has been mentioned here, President Clinton signed the Federal Welfare Reform law in 1996, and that law contained a provision called charitable choice. That provision made it possible for community-serving faith-based organizations that supply certain social services to seek direct or indirect Federal support for the provision of those services on the same basis as any other nongovernmental providers of those services. Now I repeat and emphasize the rather cumbersome locutions ``supply certain social services,'' ``for the provision of those services,'' and ``any other nongovernmental providers of those services,'' not merely because I am a boring academic at heart, which I am, but because I have learned over the past several months that otherwise some people will describe the 1996 Charitable Choice law, as well as several subsequent laws that contain charitable choice provisions, as well as the present proposal perhaps, as government funding for religion or government funding for religious charities. That to me is like describing my purchase of a fast food cheeseburger as ``DiIulio funding for McDonalds.'' Clearly, I do a lot of that sort of thing, but the fact of the matter is that it's not core funding for the organization. One rarely, if ever, hears the locution ``government funding for secular nonprofit organizations.'' One rarely, if ever, hears the locution ``government funding for profit making firms.'' Yet the fact is that virtually every domestic policy program that the Federal Government funds, in whole or in part, has been and continues to be, since the end of World War II, administered not directly by Federal employees themselves, but via Federal grants, contracts, vouchers and other disbursement arrangements with vast networks of nongovernmental organizations and providers. My former Brookings Institution colleague, Don Kettl of the University of Wisconsin, calls this massive public administration reality ``government by proxy.'' Professor Lester Salamon has termed it ``third party government,'' an estimate made that by 1980, 40 percent of all of the funds in domestic program service delivery that touch the Federal Government were being administered by nonprofit organizations, the vast majority of those secular. The 1996 charitable choice provision, like the relevant section of the proposed Community Solutions Act of 2001, invites civic-minded godly people back into the Federal public square by ensuring, as a matter of law and public policy, that merely because a faith-based social service delivery program receives penny one of public funds, its leaders and volunteers need not remove religious iconography from their walls, need not refrain from parking their housing rehab lumber in church yards, need not cease humming hymns while they hammer nails, can keep saying ``God bless you'' in the health clinic, even when nobody has sneezed and so on. At the same time, the 1996 charitable choice law, like the present charitable choice expansion proposal, seems equally explicit that no public grants or contracts, under any government program, shall be expended for sectarian worship instruction or proselytization. There is and can be no government funding for religion or for religious charities. Public funds may be used only for public purposes, not for religious ones. In the aforementioned Cnaan survey certain interesting questions, empirical questions were asked. They asked how many of the clergy in the city of Philadelphia--again, this is the largest massive and best data set we have. There are other data sets as well. They asked how--what fraction of the clergy knew of charitable choice on the books now for almost 5 years. Only 7 percent knew. There's only one congregation in the city of Philadelphia that has actually been charitable choice, and I believe, Mr. Chairman, you will be hearing from Pastor Donna later this afternoon. When asked however--when charitable choice was explained to the community-serving clergy in the city of Philadelphia-- again, this is a census, not just a mere sample or survey--and was explained to them, 60 percent said they would be interested in pursuing, possibly pursuing funding, support, to seek to deliver social services. Now, what fraction would actually follow through or qualify or go on to administer Federal programs or services is really anybody's guess. I mean I could give you my best guesstimates, but they would be guesstimates, but as a matter of public law and policy in deference to constitutional norms of equal treatment and for the sake of just plain fair play, the decision of whether to apply should be left to the country's community-serving Reverend, each should decide, according to his on her own best understanding of religious mission and community need. During the 2000 Presidential campaign, both Vice President Gore and then-Governor George Bush, called for expanding charitable choice to juvenile justice and other areas of Federal public policy and administration. I think everybody wants government by proxy programs, which is really virtually all that we have in the area of Federal public policy, domestic public policy, administration to succeed. In the area of social services and social welfare, it will actually promote literacy, not just get improvement, but to get children reading at or above grade level, not merely to promote housing rehab but to alleviate situations like the one in Philadelphia, where a fifth of the housing stock, despite literally tens of millions of dollars being spent over many years to rehab it, remains abandoned or falling down in many of our poorest neighborhoods, and to achieve other common civic purposes and get good results. If that is what we wish, then I believe, as President Bush has proclaimed, and I quote him here, we must heed the growing consensus across America that successful government social programs work in fruitful partnership with community-serving and faith-based organizations, whether run by Methodists, Muslims, Mormons or good people of no faith at all. Like most Americans, like Philadelphia's Mayor Street and Reverend Goode, like those I believe in this Congress who supported charitable choice several times over the last several years, and like literally tens of thousands of community leaders, both religious and secular, all across the country, President Bush understands that the Constitution does not erect a wall of separation between common sense and social compassion. As the President has so often and so eloquently stated, government cannot be replaced by charities, but it should welcome them as partners, not resent them as rivals. As the President stated in the Executive order to establish the office that I now direct, and I quote him again here, the paramount goal is compassionate results, and private and charitable groups should, including the religious ones, should have the fullest opportunity permitted by law to compete on a level playing field so long as they achieve valid public purposes. The delivery of social services must be results- oriented and should value the bedrock principles of pluralism, nondiscrimination, evenhandedness and neutrality. So again, thank you for inviting me. I look forward to answering any questions to the best of my ability, or more likely and better, to the best of my staff's ability. Thank you very much. Mr. Souder. Thank you. [The prepared statement of Mr. DiIulio follows:] [GRAPHIC] [TIFF OMITTED] T9973.006 [GRAPHIC] [TIFF OMITTED] T9973.007 [GRAPHIC] [TIFF OMITTED] T9973.008 [GRAPHIC] [TIFF OMITTED] T9973.009 [GRAPHIC] [TIFF OMITTED] T9973.010 [GRAPHIC] [TIFF OMITTED] T9973.011 [GRAPHIC] [TIFF OMITTED] T9973.012 [GRAPHIC] [TIFF OMITTED] T9973.013 Mr. Souder. Do you want to wait until the questions or would you like to introduce your staff at this point, because we'll need to swear them in before they can testify. Mr. DiIulio. I would introduce my staff, Mr. Chairman, if that's all right, if they would. Don Eberly who is the deputy director of the White House Office of Faith-based and Community Initiatives. Carl Esbeck who is the director of the Department of Justice center. Don Willett, the associate director of office for law and public policy. [Witnesses sworn.] Mr. Souder. Let the record show that the witnesses all responded in the affirmative. We're going to go to our 5-minute rule with the Members. If we need to, we could go a second round. We also have a large second panel, and I have asked Ranking Member Cummings if he'd like to go first. Mr. Cummings. Thank you very much, Mr. Chairman. Mr. DiIulio. Mr. DiIulio. Yes, sir. Mr. Cummings. I was just wondering when you--I mean what is your--your last words when you were talking, quoting President Bush, you were talking about these churches basically achieving a certain social purpose and that they had certain goals that he wants to see them achieve. How do we make sure--how do we get accountability here? Will we have auditors, as Congressman Edwards talked about, going into churches? Mr. DiIulio. Well, I would just say that from my experiences, knowing these organizations as I've come to know them over the past 6, 7 years in particular, there's so many of them that are relatively small. Congressman Edwards mentioned, and others mentioned, Congressman Scott as well, the ones that I know and have tremendous respect for as well, Catholic Charities, Lutheran Social Services and so on. These are great big organizations that are, you know, well-oiled and, you know, and so on, and have tremendous reach and do tremendous work. But we're talking here not exclusively about the large organizations. We're talking primarily in some respects about the smaller ones, and when these organizations traditionally have applied, attempted or put their heads up to apply for any kind of--they're providing housing rehab. They're providing health clinics. They're providing homeless shelters. They're providing prison ministries or preschools or job training or welfare to work. When they've put their heads up traditionally and said, hey, we're providing these services and there are, for example, 130--actually I counted 135 different Federal youth-serving programs stretching across a dozen or--stretching across seven or eight cabinet agencies plus the Office of National Drug Control Policy, plus the Corporation for National Service, step forward and say we are doing this sort of work, how do we apply, and if we do apply, do we have to stand down on who we are, there's a great concern about very--the question you go to, about accountability standards and so forth, and how do we begin to go through a procurement process, which sometimes can be so forbidding for some of these organizations. But the rules, the procurement rules, the performance standards and so forth that exist in law in these programs would apply regardless of who the recipients. Mr. Cummings. You would see the first Baptist Church of Baltimore now in a position where with the money going directly to the church that government has--would then have the right and, seems to me, would have the duty to make sure that the taxpayers' money is being spent for the purposes that it's supposed to be spent for. Other than that--let me finish. Other than that, we might as well walk out there and throw the taxpayers' dollars out the window if we don't have some type of accountability. So the question becomes, do we now have a set-- and I can tell you, in your statements, your statement you made--you were talking about how you really don't know how many churches might take advantage of this. Well, I can tell you that in my District, there are a whole lot of folks that like this idea. They like the idea of money coming directly into their church. And the other question becomes, how do we make sure that there is accountability, and President Bush talks about these layers of government. I mean, do we now have another layer of government to oversee all of these churches because I can see them in Baltimore, probably, maybe 200, 300 churches applying for this money, and possibly maybe a third of them getting some of it. That's just in one city, in my congressional district. Mr. DiIulio. My understanding, Congressman, is that the accountability, the procurement rules and procedures, the fiscal accountability standards, the need to segregate accounts to be accountable, goes to the program and the services provided. It is not as if merely providing a service and having a program opens your books to the government in all respects. It's really in many respects, and I think you will hear this when you hear from Pastor Donna in Philadelphia, who has gone through this process and has had quite an interesting journey through it. But I think in many respects, it's no different from what happens at my university research center when we receive a particular Federal grant, do a particular piece of research, we are part of a much larger entity, which is part of a still larger entity, but the accountability standards and the procedures apply to us in that program. It's not a sort of a carte blanche going across the entire university. Mr. Cummings. But when you have a small church, they may not have all of that big stuff that you're talking about. It may be the church. I mean, my mother's a pastor. She has about 500 members. That is the church, and these are the people that are going to be applying for this money. She doesn't have a big organization to tell her how to do her books. And the reason why I ask that question is that we've seen some situations in Baltimore where, not necessarily with these kinds of programs, but where, say, like with certain AIDS money, a small organization that thought they could handle it, they find themselves now under Federal investigation. They thought they could handle it, and then now the government, Big Brother, is in that organization looking at their books, Justice Department, FBI, into them deep, and all they were trying to do--and probably didn't do anything wrong. But in other words to them, they didn't do anything wrong, but when government starts looking into it, it's a whole other thing, and I wonder whether that defeats the very purpose that we're aiming at. Mr. DiIulio. Again, I appreciate those comments and concerns, and the--I believe Dr. Amy Sherman of the Hudson Institute testified in the House earlier this week, and she has studied carefully the actual experience with charitable choice over the past 4 years or so in nine States, that have been among the more active ones in charitable choice things, and while experience--Madison, maybe a lot of quoting of Madison today, but Madison said experience is the oracle of truth. If the experiences, as she summarizes it in her report, is any indication, well, one would have to have those concerns, there are real concerns. There just wasn't a whole lot of problems in the nine States where she researched and looked very carefully at numerous faith-based organizations, churches, synagogues, others, as well as noncongregation-based faith- based organizations that got involved in the administration of Federal services in a variety of social services areas, which doesn't definitively answer the question, but it does say the experience to date so far is much more reassuring I think than not. Mr. Souder. One of the difficulties we are going to have in today's hearing is that we've got all this pent-up demand with lots of questions, and I want to assure everybody here we're going to take different slices of this as your office gets up and running, as agencies get up and running, but we also build a hearing book with which to base other things on, and I want to ask that you will submit as a followup, understanding we will do additional hearings on this, one is a question came up early on in the opening statements about the pool of dollars. In other words, are we merely spreading the same number of dollars thinner, and if you could submit a statement that would kind of expound on two things you raised before. One is obviously the leveraging of the dollars which you made, and develop that theme a little more; and second, if you can talk about the tax exemption, excuse me, the--those who don't currently get a write-off, those who don't itemize and how that's going to increase the pool of dollars, estimates from the administration, how many additional dollars that would be. Many of us feel that actually is the biggest thing in the sense of putting more dollars in the hands of people, and yet we're all obsessed with the charitable choice part. Also, if you want to add a few words at this point but--and I know this is in the developmental stage, and if I can put a plug in, the compassion fund that was kind of a rhetorical definition or a--and not necessarily a full concept at this point in the State of the Union address, addresses many of the concerns that Congressman Cummings and others and I have expressed, and that we've tried to work out and are ready in the education bill as we debate language of how we don't get churches entangled in how we're going to help this 93 percent that currently isn't involved, may not have attorneys in their churches, may not have MBAs or CPAs in their churches, to figure out how they're not going to get sued. If you could add a few comments now where you see this heading, I view this as long term, almost like the microcredit- type situations that we have in the small business administration where we have these centers that can help--I mean, small churches are not going to have the resources to figure out that between June 7th and June 9th a grant is coming through for youth services. They don't have attorneys and CPAs. So how do we make this an empowerment and as a supplement to that? My assumption is that the 93 percent who currently weren't involved in your example are predominantly smaller units, or at least are disproportionately probably minority and small. Mr. DiIulio. Just to clarify, Mr. Chairman, 93 percent weren't even aware of it. You know, couldn't name it, hadn't heard about it despite all the--you know, even recently in community town meetings we've gone to, you know, several, scores, hundreds of people and still all this--it's hard because these folks live--you know, they're living a different existence. They're not picking up these newspapers. They're dealing with these problems on a day-to-day basis out there trying to resurrect hope and deal with people's lives in these communities. The 97 percent--the figure of 60 percent who would consider it has been interesting. I was in Louisiana last week--it's interesting whether it's Shreveport, LA or whether it's north central Philadelphia, and you get the groups of folks together, it's the same set of concerns and questions--I'm talking about the folks that do the actual work--and what we hope to accomplish--to add a few words, Mr. Chairman, as you invited-- with the in-progress concept of the compassion capital fund is address the technical assistance needs of these organizations, because as Congressman Cummings said, you know, a lot of these organizations like to say--and I don't mean to be flip--but looking at the 6, 7 years, if you could fill out a 52-page RFP and all that, I don't know how much time you have left over to actually do the work that you're trying to do, and in talks with some of the organizations that have been out there for a while, like Catholic Charities and Lutheran Social Service, or, you know, huge organizations, many billions of dollars a year in talks with secular or independent sector organizations like Big Brothers Big Sisters, a real passion and a real interest in having new collaborations, so that rather than either treating these smaller community-based organizations and grassroots Josephs and Josephines as sort of radioactive or, you know, marginalized, we find new and better ways to get them into the process. So if they're providing social services and some of the social services they're providing link up with government programs that are addressing acute civic needs that aren't yet, you know, well met, but they're able to find these new partnerships. This is really a multisector initiative. So the compassion capital fund, in terms of helping to supply technical assistance and support, helping to incent organizations that are out there already to provide greater, reconnected in some cases, to the grassroots organizations that in, again, many cases are doing 50, 60, 70 percent of the actual work and receiving less than 1 percent of the government money or receiving virtually no private or philanthropic support as well. You have--lots of corporations have absolute bans on giving to faith-based organizations. Even if you know they have community-giving portfolios, they'll tell you, well, we don't give. So while they do housing rehabs, we don't give to those organizations. They have concerns. We need to change that culture too. So we hope the compassion capital fund will also, in addition to technical assistance and capacity building, get in behind programs like the model public private programs the President's expressed such interest in during his budget address with Mayor Street of Philadelphia, like this program, targeting best practices mentoring on prisoners' children, where you get a quality world class secular independent sector organization, cross-lace it with churches, people in churches, and get these unparalleled, unprecedented results in terms of both numbers, and I believe when all the data are counted and all the studies are in, I think we will be quite happy with the results. Mr. Souder. Thank you. Congressman Davis. Mr. Davis of Illinois. Thank you very much Mr. Chairman. Mr. DiIulio, I've heard lots of explanations about what the initiative is, what it's designed to do. The one thing that I have never understood yet is how much additional money are we talking about, if we're talking about any additional resources, to attack the problems that so many people are geared up for and about. Mr. DiIulio. Well, in the first instance, I mean the three--to boil it down, Mr. Congressman, to the three key goals, first of all, we're talking about increasing charitable giving, both human and financial. So the President has very clear--I mean, what's in the Community Solutions Act, the deductibility for nonitemizers, which we think would increase by $14 or $15 billion a year, and a lot of that giving would go to independent sector organizations, community-serving ones, both religious and secular. With respect to charitable choice and with respect to the provisions we've been discussing, basically what it does is it opens up the entire range--would open up the entire range of Federal domestic programs to organizations that are out there, traditionally have not been a part of these government funding loops. So while it may not be new--it certainly will be new for their communities and for these organizations to participate in this government by proxy system, having provided social services for so many years. Also, the compassion capital fund just mentioned, the President has requested bunches of new discretionary spending, I believe $67 million for starters, for targeting mentoring and other social services on the children, youth and family of prisoners. There's money for maternity group homes and a range of other things. There's additional money as well in addition to all the increases in all the regular cabinet agency budgets. Mr. Davis. Let me just ask, are we saying that the $67 million is going to be new money? I understand the concept of stimulating additional giving, but that's not coming out of a Federal outlay. That's not--you can't count that yet. I mean, that's a projection. I mean, I'm going to get excited because I know that my local church is doing all this good work and I'm going to give more than what I've already given. Of course, in some communities, they've already given to the extent that--that giving--I'm trying because I don't want people that I represent to get all up in the air thinking and believing that they're going to have some additional resources to work with in their charitable not-for-profit activity. I want them to fully understand what the concept is, and I think there is some aspects of it that are great. I think it would be great if people were given more. I mean, I really do. But I want people to understand that and not to believe that they're about to receive some additional assistance coming out of the Federal Treasury, if it's nothing there for them to get. Mr. DiIulio. Well, Mr. Congressman, I'll be happy to, as the chairman suggested, get you a full recitation of, you know, the numbers across the various programs, extant, discretionary and so forth, but also just note that one of the purposes of the--hasn't come up--is included in my testimony--but of these cabinet audits of the Executive order requires our office to create these cabinet centers for, and to perform is really take a hard look at the extent to which these funds now are reaching these actual community-based organizations and to what extent. You know, there is this phenomenon which I've seen and has been documented in some cases in cities all across the country, in particular. I'm sure it applies as well outside of big cities, but I happen to be a Philly guy, and that happens to be my focus. You have X percent of the actual work of a given kind going on, and the folks who are doing the actual work, who are supplying the volunteers, who are mobilizing, you know, the resources, who are--the human resources, who are using their church basements, who are using their auxiliary halls and so forth and are often--you know, there is somebody who is in the mix who is providing those programs and running those programs through these organizations, but these organizations themselves receive now little or no direct support. That's what I heard constantly over the last 6 or 7 years, and so we want to also, through this agency audit, take a hard look at how presently what is it about the system that makes it so difficult for funds to flow directly to the community helpers and healers themselves who are closest to the people, the beneficiaries who are actually getting served. Mr. Davis. So you're saying one of the purposes is to try and make sure that the actual resources get to the people at the bottom--on the bottom line who are providing the services as opposed to all of the other layers of the bureaucracy, other entities that by the time it gets to the church basement, there are only a couple thousand dollars left? Mr. DiIulio. Yes, sir. I mean, Mr. Congressman, basically in the mid 1990's, I directed the Brookings Institution Center for Public Management and was somewhat obsessed with the National Performance Review and the Government Performance and Results Act. Of course, I knew that was going to change the face of government forever, so don't take everything I say with a grain of salt, but it has helped, I think in some respects, but there is still these leaky bucket effects. There's no doubt about it. So there's a question of how much resources and how much more full was that bucket going to be, if you'll accept that locution, and then there's question of how much that's in that bucket actually gets to the community helpers and healers and the organizations that are at the grassroots that actually deliver up close and personal the services. It could even be health clinics. You don't think of churches, synagogues and mosques or religious or faith-based organizations being heavily involved in public and private health service delivery systems, and yet you go around in Philadelphia, you go around in Milwaukee, you go around to other cities and you're going to find these organizations as key supports, and whether you're talking about elder care, you know, homebound elder care to frail folks, this growing population, or Medicaid pediacare populations. There's only one difference. They're doing the work, but they haven't been able to get any of the resources. And the government money, it's always been, well, that can't ever quite touch, you just do the work, the money kind of goes somewhere else. So it is a purpose of, or it is just sort of descriptively, not editorially, see how this government by proxy system, which has evolved, you know, as programs have multiplied, 100 youth serving programs, 120, 130, 135, no one has ever sort of looked at the implementation aspects as it relates to the extent to which the funds are actually reaching the community helpers and healers themselves. Mr. Davis. Thank you. Thank you very much, Mr. Chairman. Mr. Souder. Mr. Barr. Mr. Barr. Thank you, Mr. Chairman. Mr. DiIulio, when Congressman Edwards gave some introductory remarks, he mentioned the witches he has in his district. They call themselves Wicca, but it's basically the practice of witchcraft, and there are groups--at least there used to be a group at Fort Hood, a military installation, that were allowed to practice witchcraft while on active duty. I have a problem with that, but that's not really the question that we're addressing here. I think some people bring up this notion of witches and so forth, in other words, sort of weird fringe groups, whenever we try to engage in the discussion about legitimate faith-based organizations and their role to helping administer social services, including those involving Federal funds. They say, well, then you'd have to open it up to these witchcraft groups and other sort of fringe groups. I don't see that as a problem in what we're talking about here, do you? Mr. DiIulio. Well, I'm going to--I'm going to resort to my lawyers in a minute. I'm a public administration guy. So when this issue--I mean, scholar is basically at the core of what I do, myself in American government studies--and when this issue first came up and folks were saying, you know, how are you going to decide on who is the list of approved or preapproved procurement list, it baffled me. It wasn't that I felt I was being set upon. It just baffled me because my understanding has always been that as a settled matter of Constitutional and public law that if you can afford the postage and you can fill out the RFP, however onerous or streamlined it is, you can apply, whatever organization, and the question is, well, once you apply, you know, are they basing the decision on the extant procurement rules and performance measures and so forth, or are they asking who are you or do you have certain characteristics that rule you out? Mr. Barr. And the criteria that they use will be a very objective criteria, will it not? Mr. DiIulio. Well, it's about--I mean government--to my knowledge, the Federal Government contracts for more than 215 different types of social services, actually, I think if you were to count them all up, and Federal Government has programs. The programs come first. The Federal programs are sitting there, and the Federal Government has one Federal civil servant in the area of domestic policy administration for every six people who indirectly earn a paycheck from the Federal Government through contracts, grants, vouchers, subnational governments, nonprofits and for-profit organizations that translate that Federal policy into administrative action. Anybody who wants to put up their hand and send in the post or fill out the forms and apply for social service delivery will have to meet the specific terms of that social service delivery program, regardless of what Cabinet agency it's in or whatnot and---- Mr. Barr. And access to that process is the essence of what President Bush is simply proposing here, to have fair universal objective access to use of those Federal funds to provide services that we in the government have determined, based on our representation of the people are necessary and appropriate. Mr. DiIulio. When I was in Shreveport last Friday, I heard the same thing that I heard last night on the way out actually on--all the days are running together--I guess it was Sunday, this group that basically has 10,000 volunteers, and they get in behind public and private health service delivery systems to provide care to the frail elderly, and it's the same comment comes up, says, you know, can you do something about the fact that we've been providing these services we tried to apply, but it's not far out groups or groups that some people may not like or be unpopular. We're talking about, you know, small community-serving Catholic organizations, or, you know, small community-serving organizations of recognized denominations or whatnot are saying, well, they told us at the Human Services Department or the Department of Youth and Family Services where we applied, we can't do it because our program is based in a congregation. So we told them it's not the church service. You know, it's after the church service, we run a welfare-to-work, we've got computer-assisted literacy, we've got a health care clinic. Now, the same folks who are volunteers, they may be among the congregation--a lot of people who are volunteers aren't even in the congregation--that's another interesting thing--and they may have secular partners, but they're told just because you're congregation or you have this religious affiliation you need not apply. So the essence of it is the nondiscriminatory character, they're sort of the only groups we've said, now, you can't participate in government by proxy unless you stand down on your religious character, iconography and so forth. Mr. Barr. So the bottom line is, I guess you agree with me that it's a red herring if people bring up this witchcraft issue, it really isn't relevant? I mean, all we're doing is saying if there are groups out there that believe, despite their faith-based nature, can do a good job in meeting all the criteria in delivering services, they're free to compete along with secular organizations. Mr. DiIulio. Everybody's got to run that gauntlet. I mean, whatever that gauntlet--I mean, we like to make that gauntlet more performance-based, more results-oriented, more, you know, streamlined as a matter of just achieving civic results, but yes, you know, it ought not to matter who you are. It ought to matter whether you can meet the criteria and the performance goals established within these Federal grantmaking programs in the area of administration. Mr. Barr. Do your lawyers have any different views? Mr. Eberly. Your question relates directly to the question that Congressman Edwards raised, which was, who will decide what is a faith-based program? And the answer to that is no one. In the truest sense, we are not about promoting, in this case, faith-based programs who want a wider and more open playing field. We want to include more groups who can come to the table and apply for grants under carefully designed circumstances, which is what charitable choice recommends and presents, but it's all driven by desire to see results in performance in the communities in America. We're kind of hoping, in fact, that the Federal Government becomes more results-minded, looks at more carefully how the Government Performance and Results Act might work, not to privilege faith and not to exclude faith, and I think the trend in public administration--and by the way, with the Supreme Court is to promote neutrality and nondiscrimination, and that means no favoritism for religious or a religious or anti-religious group. At the end of the day anybody who would apply for a grant and win a contract or grant to deliver social services is doing so as a social service organization which may or may not be faith-based or faith affiliated, but our defense on that question is that we believe the best policy is a policy of neutrality. And the final point would be that, you know, if it is actually the case that there are a few rather interesting exceptions to the rule, it should certainly not doom a policy. If we were to subject all that the Federal Government does and all its programs to that kind of standard, we'd have--you know, we'd be in serious trouble. Mr. Barr. Thank you. Mr. Souder. Mr. Scott. Mr. Scott. Thank you, Mr. Chairman. Let me make a couple of comments first. Mr. DiIulio. Mr. DiIulio. That's close enough. Mr. Scott. I just want to say that though 99 percent of the things we agree, tax credits involving community groups, including even faith-based organizations involved in the fight against poverty and providing social services, we're just not in complete agreement. The only problem is charitable choice, the specific legislative proposal. You indicated that when you go to McDonald's you don't fund McDonald's, but when the Federal Government contracts for goods and services, there's a stipulation that the groups will follow the civil rights laws, and that's what we are waiving with charitable choice. When President Clinton signed the bills including charitable choice--wouldn't sign charitable choice as a big bill, and when he signed it he made it specifically clear that his view was, it was--the bill was unconstitutional to the extent that it funded sponsors who were pervasively sectarian organizations. And so you don't have any problems because there have been no rules and regulations promulgated to allow pervasively sectarian organizations to actually get funded. You mentioned Vice President Gore's comments to show the bipartisan support for faith-based organizations. I'm not sure exactly what he said, but the Democratic platform supported involvement of faith-based organizations with the caveat that those programs respect first amendment protections and should never use taxpayers' dollars to proselytize or support discrimination, which of course is inconsistent with charitable choice. A couple of questions, and the first couple may be technical, and I think it may be unfair to spring these on you. If you don't know, we can get the answers later. If a faith- based organization gets funds, is that organization--those employees entitled to a minimum wage? That's the question. Mr. DiIulio. Carl? Mr. Scott. If you don't know then I can go on to another question. Mr. Souder. We left the record open for 5 days for a response if you want to do that. Mr. Scott. Well, under anti discrimination laws as a ministerial exception where if you're hiring a minister, you're not only eligible to discriminate on--based on religion, but also race or anything else you want to discriminate based on, if you have a drug counseling program, is the drug counselor eligible for the ministerial exception? Mr. Esbeck. The ministerial exemption comes from the first amendment. So the first amendment is there and not affected, of course, by charitable choice. So however the courts apply it presently, charitable choice does not change that. Mr. Scott. Well, it changes it because if it's a federally sponsored program, you would not be entitled to discriminate in a federally sponsored program based on race unless you've got charitable choice, and my question is, if the church is hiring drug counselors with Federal money, would they be entitled to the ministerial exception? Mr. Esbeck. The Title VI still applies. Charitable choice leaves that unchanged. Title VI prohibits discrimination on the basis of the race, color and national origin. Mr. Scott. Will charitable choice waive other provisions of law? Mr. Esbeck. There would be no discrimination using Federal financial assistance on those three bases. Mr. Scott. So the ministerial exception would not apply? Mr. Esbeck. If you're using Federal financial assistance, Title VI applies, that's correct. Mr. DiIulio. And we'd be happy to answer these in more depth. I feel left out. It's all on the lawyers now. Mr. Scott. Do you interpret charitable choice to allow proselytization during a program with volunteers? Mr. DiIulio. The black letter--I'm going to take this one. The black letter of it from 1996, and what's in the Community Solutions Act says no funds for sectarian worship, instruction or proselytization. Now can you have a program that has as a component of the program prayer service or worship, you might, but you can't fund it. You can't fund someone engaged in sectarian worship. Mr. Scott. Can you do it with volunteers? Mr. DiIulio. No--I hate to give it to the lawyers. No. Mr. Scott. You cannot proselytize with volunteers although you're spending no money, no taxpayers' money for proselytization during the program? Mr. DiIulio. The program public funds--you know, in the struggle to move from public administration to the higher intellectual echelons of constitutional law where they make all the money I'm told, too--I don't know about that--I have come to--my reading, Congressman, is quite simple. If you look at the whole body of case law, public funds need to be used for public purposes and the advancing of public and civic purposes. Now, the devil is very much, as is God, in the details, and where the courts have looked at this from my not-expert reading and on the expert readings of others who advise me, the courts have, I think, been very careful to make very good, fine case- by-case distinctions they're in the business of making. And so we need to sort of contextualize the question, get down to specifics, what kind of proselytization, under what conditions are you talking? You know, some programs may be 9 to 5, some may be from 9 to 12 and 12 to 5. You know people break out and go and do the computer-assisted learning or the welfare-to-work program, or they move across to the health clinic. Can I just add, too, about in terms of the question--in terms of the empirical side of it as well that goes to the questions you've asked if I may? Mr. Souder. Yes. You're a little over. If you can do a quick summary. Mr. DiIulio. I would just, and I understand--and I've learned over the past 3 months, we--initially we had our first meeting over with my friends at Brookings, Congressman. There are lots of questions here that reasonable people can disagree on. I would just make an appeal to folks, wherever they're coming from on this, to consult the baseline realities in these communities, remembering that so many of the groups we are talking about right now are purely volunteer groups. The question of hiring doesn't come up. So you take that number and you subtract from it all those groups that don't hire anybody. They're volunteers. Now they happen to be a church, synagogue or mosque and the pastor. After research that the typical character of the part-time person is somebody who works a 40- hour job and then gives the extra 30 or 40 hours a week in volunteer service, you know. They may be there on Sunday or Saturday, but he's also or she's also there during the week but that's it. You know, the Cnaan data I mentioned referenced--and referenced in my testimony, the average one of these groups in the cities is 24 people, 15 from the congregation and 9 others from, not the congregation, and in many cases there are no employees at all. And then quickly, second, one of our associate directors, not here with us today, is Mark Scott, who's a former Air Force captain, former--he's a library scientist, an engineer, kind of a renaissance guy but also a church of God in Christ minister from Boston. He's Reverend Mark Scott, and he's been doing that outreach work with youth, working with police and schools and so forth in Boston for over a decade. It so happens that in the ministry he was part of in Boston--received a fair amount of national attention and interest--so happens that the single most well-publicized and well liked street outreach worker is a young man named Kenny Gross, who happens to be an Israeli defense force guy who came across and has done this remarkable work with these Church of Christ in God ministers on the streets of Dorchester for the past many years. Point being, that not all of the groups that are out there that could take advantage of the exemption do. So not that this answers the constitutional or theoretical question, but just to have it sort of the discussion disciplined to the extent by the reality that out there, so much of what we are talking about are pure volunteer-serving organizations, many of which, you know, require all hands on deck, and the last thing they think of in some cases is, you know, what do you happen to--you know, where do you happen to be coming from. If you're going to--willing to sign up to do prison ministry or stay there to, you know, all hours working with folks trying to help them find jobs, you're, in many cases, more than welcome. Mr. Souder. Congressman Edwards. Mr. Edwards. Mr. DiIulio, I look forward to working with you on what I think is wonderful legislation to help taxpayers who don't itemize their taxes to receive a benefit from contributing to charities. Let me ask you this. You quoted the President as saying something to the extent the paramount goals should be resolved. I think that logically concludes, you're talking about potentially billions of tax dollars on the table for thousands of churches to compete for. You have to have audits of how that money is spent, whether it's effective or not, whether it's spent illegally or not. My question would be whether it's one case or thousands of cases, when that occurs, when, say, that money is spent contrary to Federal regulations, do we prosecute the pastor, the board members of the church or the church committee members who are involved directly in that program? Mr. DiIulio. I don't know. Gosh, I don't know the specific answer. I guess it would depend on the particulars of how that came about. I do know that from what I have studied in relation to your question, Congressman, is, you know, the question of audits, and the question of performance audits in particular, fiscal accountability standards, performance audits, and the whole range of things that the Federal Government, through Federal agencies, do is essentially in the business of contract information, monitoring and compliance right. Government Performance and Results Act went on the books in 1993, I believe. And if you look at the implementation of Government Performance and Results Act with respect to sort of the stop-the-clock in 1996 or 1997 or yesterday and look at the actual implementation of that, you find that with respect not only to performance, you know, how come--how is it that grantmaking decisions get made year in, year out, you know? Why have funds flown in these areas as opposed to others? The agencies have to come up with a statement every year, performance statement. They have to come up with a 5-year plan every 3 years. They have to revise that plan. So there is a lot of paperwork. But there's not a whole lot of performance-based management and measurement and the auditing procedures that are tethered or would be tethered were actually implemented to the so-called GPRA vary tremendously from cabinet agency to cabinet agency and sub unit to sub unit. So you get this you know amazingly complex administrative networks, and so it would depend---- Mr. Edwards. So who would have to audit? Who you prosecute would have to depend on the situation. My last question, you quoted Mr. Madison as saying, ``experience is the oracle of truth.'' I agree. Based on that quotation, can you give me any examples throughout the history of the world where direct government funding of churches, synagogues and houses of worship resulted in more religious freedom, more religious tolerance or more religious generosity in addressing social problems than here in the United States where, for 200 years, we've had the principle of separation of church and state and no direct Federal funding of houses of worship? Mr. DiIulio. Well, I will try--I'm going to try to be more concise and follow your example, and just say that I guess you're not stating a condition contrary to fact, but I won't accept the predicate of your statement in that this is not about changing, so far as I'm concerned, any of our traditions with respect to the separation of church and state. If it were, you know, I wouldn't want to do it. Mr. Edwards. Well, would you agree--let's be clear, I think, factually, because the chairman wants to look at how the programs are actually working. We do all agree that none of the charitable choice language already in law money can go directly to the church, to the synagogue, to the house of worship, not necessarily having to go to separate 501(c)(3), right? Mr. DiIulio. But the 501(c)(3) which is a device, is one way of doing--it's one way of doing it, but not the only way of doing it, and so the question really would be are funds going for--to a social service organization to provide social services in the same way it goes to all the other nongovernmental providers of the same services? The fact that the folks who are doing it happen to be based in, come from, affiliated with or motivated by faith or faith-based organization, in our view, ought not to mean they have any higher burdens to meet, any steeper hills to climb. Mr. Edwards. If I could ask then, with the time being limited, one in respect to time and the other committee members, if you could answer the question to the committee in writing, whether in cases in other nations throughout any period of time in the history of the world where direct government funding to the houses of worship resulted in more religious freedom, tolerance or religious generosity in addressing some of the problems. Mr. DiIulio. Be happy to. Mr. Edwards. Thank you. Mr. Souder. Thank you. We are not going to do a second round with you. You've been here over 2 hours and 15 minutes, since we were originally going to start this process, and we appreciate that and we know we'll be having you back a number of other times, but if I--it was great having someone else other than me have to take their questions for once. I just have to say that, and I'm sure we're going to have lots more of these. Also, for the record, if you could provide to the committee any guidelines you gave to the agencies for how they're to do their audits, because we would like to be able to then followup in oversight hearings with the agencies and would like to have, for the record, what kind of things you asked them to look for and guidelines, and we'll continue to follow that process. Once again, thank you for your time today. It's clear and it was great to have this discussion in public, under oath, on the record, many of the things that we individually have been talking about, and I'm sure we're going to be working through a lot more of the details. Mr. DiIulio. Well, thank you, Congressman. Thank you to all the members. Thank you very much. Mr. Souder. Thank you. If the second panel will come forward. Our second panel consists of State and local officials who have gained experience in administering faith-based programs as well as service providers and intermediaries who are working on a daily basis to improve their communities through faith-based actions. The three individuals from Indiana, Texas and Michigan represent States that scored high in the rating systems who had implemented an evolved State-based--excuse me, that work with faith-based organizations. And then we have three individuals to testify who have been actually firsthand at the grassroots level. So if all six of you could come up, and stand while you first come up, I'll swear all six together. [Witnesses sworn.] Mr. Souder. Thank you. Let the record show that all the witnesses responded in the affirmative. I'll read the order that they'll go. Debbie Kratky is the client systems manager for Work Advantage in the State of Texas--excuse me, first is Katie Humphreys, Secretary of the Indiana Family and Social Services Administration in Indiana. And I'm proud that Indiana received the highest grade. We have a Democratic Governor. We worked together on many of these issues, and I'm pleased Indiana received an A plus I believe on that rating. Debbie Kratky is client systems manager for Work Advantage in Fort Worth, TX, in Tarrant County. Loren Snippe is the director of Ottawa County Family Independence Program in the State of Michigan, and is an intermediary organization. We have also then Donna Jones, who is pastor of the Cookman United Methodist Church. I lost my order. We have Bill Raymond, president of FaithWorks consulting service in Michigan. And from Baltimore Donna Jones Stanley, the executive director of Associated Black Charities. If you could start, Ms. Humphreys. STATEMENTS OF KATIE HUMPHREYS, SECRETARY OF THE INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION; DEBBIE KRATKY, CLIENT SYSTEMS MANAGER, WORK ADVANTAGE; LOREN SNIPPE, DIRECTOR, OTTAWA COUNTY FAMILY INDEPENDENCE PROGRAM; DONNA JONES, PASTOR, COOKMAN UNITED METHODIST CHURCH; BILL RAYMOND, PRESIDENT, FAITHWORKS CONSULTING SERVICE; AND DONNA JONES STANLEY, EXECUTIVE DIRECTOR, ASSOCIATED BLACK CHARITIES Ms. Humphreys. Chairman Souder, Representative Cummings and other distinguished members of the committee, thank you for this opportunity today to appear before you to provide information about FaithWorks Indiana. This is our State's initiative to involve faith-based and community-based organizations in providing services to Indiana residents. We call them Hoosiers in Indiana. So I will probably have that sprinkled throughout my presentation. As head of the Health and Human Services agencies for the State of Indiana and as executive assistant to Governor Frank O'Bannon, I'm pleased to outline some of the important work being done for the people of Indiana by family and social services and by the faith-based organizations and community organizations across our State. In the interest of time, I certainly am not going to repeat what many of you acknowledged in your opening statements, and that is, that as we move into--through welfare reform and come up against the time limits, clearly we're dealing with people who have been disenfranchised, people who have serious difficulties in achieving self-sufficiency. In November 1999, Governor O'Bannon announced the FaithWorks Indiana program. And our program was intended to widen the doorway for community-based and faith-based organizations to access funding and support, to provide services for Hoosiers throughout the State. During our--the first 16 months we spent about the first 6 months actually surveying, working with, talking to faith-based and community- based organizations around the State. We also spent the next 6 months developing the infrastructure that would be necessary for this to be successful because we wanted the community organizations to have the infrastructure, have access to the data that needs assessment, access to understanding reporting requirements in order for the program to be successful. So we built the infrastructure. We then developed an RFP and went out for proposal, and I'm pleased to say that we now have about $3\1/2\ million that are going to approximately 40 faith-based organizations across our State. Again, you have already noted in much of the discussion that faith-based organizations have historically provided a wealth of services to individuals in their respective congregations, but more importantly, many of these organizations have provided services to people in their neighborhoods. And I think our program, the reason I continue to talk about faith-based and community-based organizations is that we believe that many of the faith-based organizations, in fact, provide an important anchor in their neighborhoods. Some of the components of our FaithWorks Indiana initiative, as I said, included gathering input from all of the communities before we acted. We did a proactive outreach. We did education, technical assistance. We had five regional meetings around the State. We invited over 9,500 different organizations to participate. Over 450 representatives of faith-based organizations receive technical assistance through these regional workshops or one-to-one consultation, and the technical assistance consisted of the information on the following topics. No. 1, we talked to them about the charitable choice provisions. We shared with them information about the needs assessment so that they could tailor their proposals around the needs of their communities. We talked to them about funding opportunities, not just the funding opportunities that were going to be provided through State resources, but we also have developed an extensive set of materials so that these faith- based organizations and community organizations can also access other sources of funding. We don't want government to be the only source of funding to these important organizations. We talked to them about proposal writing, reporting requirements, establishing a 501(c)(3)--and we do encourage that although we don't require it--and we talked to them about options for partnering with other organizations that might have more experience. Part of our infrastructure, we developed a 24 access to information through our Web site. We know that there were over 1,600 hits during the first 3 months. Part of our Web site we have a survey where we ask people to fill out a survey so that we know whether they are actually faith-based organizations or not. We believe that the incremental approach that we have taken toward developing this program is the best approach. We appreciate the flexibility that we have through the charitable choice provisions, and we would encourage you to continue to give States the flexibility to implement this program, and I would be happy to answer any questions in whatever order you deem. [The prepared statement of Ms. Humphreys follows:] [GRAPHIC] [TIFF OMITTED] T9973.014 [GRAPHIC] [TIFF OMITTED] T9973.015 [GRAPHIC] [TIFF OMITTED] T9973.016 [GRAPHIC] [TIFF OMITTED] T9973.017 [GRAPHIC] [TIFF OMITTED] T9973.018 [GRAPHIC] [TIFF OMITTED] T9973.019 [GRAPHIC] [TIFF OMITTED] T9973.020 [GRAPHIC] [TIFF OMITTED] T9973.021 [GRAPHIC] [TIFF OMITTED] T9973.022 [GRAPHIC] [TIFF OMITTED] T9973.023 Mr. Souder. I appreciate you doing a summary, and I should have said this that, as you heard, we'll insert the full statement in the record. Some of you have longer than 5 minutes, some of you have probably about like the 5 minutes, that we'll try to draw it out in the questions and insert the full amount in the record if you can summarize. The yellow light goes off at 4, and then we've been a little generous with the red light, more than, say, the Indiana State police. Ms. Kratky. Ms. Kratky. I'm honored to be talking with such a distinguished group today. I think a little bit of background concerning Tarrant County might be helpful in understanding how we've become successful in collaborating with faith-based and community-based organizations. Although our community has had a long history of collaboration that began back in the early 1950's with Amon Carter Sr., that philosophy still continued. In 1995, then-Governor Bush presented to the Texas legislature a plan for bringing control of work force programs and the funds that drive them down to the local level. In this bill, known as House bill 1863, 28 different job training programs were merged into one State agency, the Texas Workforce Commission. That commission then was charged with establishing 28 different work force boards throughout the State of Texas. This has placed the control and the policymaking decisions concerning over $52 million into the hands of dedicated volunteers in Tarrant County alone. In preparation for this task, our executive director and our chair made the decision to have public information sharing sessions throughout our community, especially in the poorer neighborhoods. The primary purpose of those sessions was to simply listen. What we wanted to know was would this population be interested in our career centers and if not, what services did they need and how did they want those services provided. After several months of carefully listening, our board mounted a ``no wrong door'' policy for working with some of our hardest to serve customers. One of the things that guaranteed our success was that we had absolutely no idea what we were doing, and because we had no idea what we were doing I think we became successful. The first step for board staff was to simplify the process. Many small, community-based and faith-based organizations told us from the very beginning that the reason they didn't participate was because the process was too complicated. So board staff sat around the table for several days trying to figure out a way to make it easier. Our board chair challenged us to maintain the full spirit of the law but to make it easier for those first time participants to apply. We had an information session. We also had training sessions on grant writings and a good many other opportunities to talk before we released that first RFP. We were pleasantly surprised by the turnout, and we were even more surprised and delighted by the dialog that took place during those sessions. Tarrant County has continued to grapple with the issues around faith-based organizations accepting government funds. Tarrant area community of churches and the United Way of Tarrant County have assisted in sponsoring workshops around charitable choice and the role of government in faith-based organizations. During these sessions, we've been able to work out many of the issues surrounding separation of church and state as well as other sticky political problems I have heard addressed here today. The bottom line here though is that very few organizations went into this process without at least a basic understanding of working with the government agency. Now the lessons our community has learned over the past 3 years could write a full dissertation. I spoke before a group of pastors and other members of the faith community recently, and I think three areas we discussed would be lessons for this community. The first lesson revolved around mission. I have two examples to share with you. One organization struggled and one organization flourished. The end result of both those programs turned out to be a basic understanding of the word ``mission.'' The first organization had a real vision for taking illegal aliens entering this State and guiding them through the proper channels teaching them English and providing them with a trade, and they were very successful and what a wonderful mission that was. But our mission at the work force board dealt specifically with training and placement of citizens of the United States. Our mission simply didn't match. This faith-based organization attempted to change their mission. After several months of grappling with this problem, the church decided against pursuing the grant. Another faith-based organization, though, studied our mission and found a way to be flexible in their mission and use our funds to serve U.S. citizens and use their funds. Mr. Souder. You're going to need to summarize the last part of your testimony. Ms. Kratky. The second part of this process came from outcome driven results versus bottom line results, and I think that's something we've got to talk about with this particular group. So after the last few years in dealing with faith-based organizations, what have I learned? I think it could be answered by telling you I've been looking for this for 20 years. Our clients need the compassion and real concern these organizations bring to the table. Those organizations need funding and guidance that only government can bring. We are juggling these needs in Tarrant County, but I'm going to tell you, every day is a new day, and I have to pray every day that we serve our clients with dignity and that we still maintain the dignity of good taxpayer stewards of the taxpayer dollars, and I'm hoping out of all of this will come some simpler rules as well. Mr. Souder. Thank you. [The prepared statement of Ms. Kratky follows:] [GRAPHIC] [TIFF OMITTED] T9973.024 [GRAPHIC] [TIFF OMITTED] T9973.025 [GRAPHIC] [TIFF OMITTED] T9973.026 [GRAPHIC] [TIFF OMITTED] T9973.027 [GRAPHIC] [TIFF OMITTED] T9973.028 Mr. Souder. Mr. Snippe. Mr. Snippe. I'm the director of the Ottawa County Family Independence Agency, which is the local State agency that administers the State of Michigan's public assistance and family protection programs. The Family Independence Agency is a State-administered agency with local offices in all of Michigan's 83 counties. When I was asked to come here today, I was asked to talk a little bit about our role with the faith community, and to do that I have to talk in the context of our Welfare Reform Initiative in Michigan called Project Zero. Project Zero was initiated in Michigan in 1996 just prior to the Federal Welfare Reform legislation, and the goal of that Project Zero was to reduce to zero the number of cash (AFDC) recipients who were not reporting earned income. In other words, the goal was to get everyone a job. Ottawa County was one of six sites to participate in this project, and we were the first of the six sites to actually accomplish zero. When that occurred, we were sort of heralded in the local, State and national media as the only place in the Nation where everyone that was required to work was working, and probably an adjunct to that was the issue that we utilized the faith community in accomplishing that task. When Ottawa County was asked to pilot this, it was a unique opportunity for us to get involved in. As a State agency, our rules come from a central source, from our Lansing central office. Project Zero was a bit different, however. To accomplish the stated goal, local offices were given the opportunity to develop their own local community plan as to how to attain zero, and we were also given the financial resources to accomplish that task. Of course, one of the first steps when any government agency gets started we do a study. We had to take a look at some of the issues that were barriers to employment. Of no surprise were transportation to day care and day care, but what one thing that came out as a surprise, at least as significant as it was, was the lack of a family support system with many of our families. And we've worked with families for years trying to get them jobs. We arrange transportation, but we did little in the past in establishing a family support system, and we all know how important that has been in our own lives as we look at how our values were developed, how we made career choices. When we became adults how our parents sometimes helped or family members helped with transportation or backup day care. Our families however didn't have a family support system to fall back on to. So our Project Zero model consisted of four components: Job search and finding jobs, transportation--a transportation system. We addressed issue of child care. We addressed family support. We did that by establishing a faith-based mentoring program to address emotional support and encouragement that were required by so many of our families as they transitioned from welfare to work. In the early 1970's many of our families or--our churches in our community sponsored Vietnamese families. When they did that, they established education committees, housing committees, employment committees. These families couldn't fail. They were surrounded with services, and we said wouldn't it be great if our local churches would do that for the family that lived next door. Well, with the advent of Project Zero, we had the opportunity and the resources to do it, and we contracted with a local nonprofit agency to recruit churches to provide that support system. We were fortunate to have a Good Samaritan ministries, one of our local agencies, that was in the business of training and recruiting churches to address social needs. Now, we many times have referred people to that program before but on a very limited basis. With Project Zero dollars, we were given the opportunity to ask them to really establish a system to address the high volume of families. So under a contractual relationship with our agency, Good Samaritan recruited congregations, trained congregations in mentoring methodologies and agency protocols. They matched clients with church congregations. They coached and monitored churches and served as a liaison between agencies, churches and clients. They also sent us monthly reports of their financial spendings and also of the progress they were making with families. I should emphasize that we utilized churches. We didn't necessarily recruit individuals. We did have individual contact teams--individuals on a contact team with a family, but it was the church that we focused on. As the contact team made those contacts, they would often find that there were legal issues that they had to deal with. There were car repair problems that had to be addressed. Many things that they did not have the expertise on and they then utilized the members of their congregation as a multi-disciplinary team to find the resources within that church to address the issues. I should mention too that this program was completely voluntary for our clients. We referred them to the program but we always asked them if they objected to being involved with this mentoring program with a faith-based organization. Very few ever turned us down. In fact, I don't even recall that any did. We also--the training program that was involved for the churches focused on--they were in a position to provide help and support. We expected that they not require participation in religious activities or church activities. Many families have been positively impacted by this initiative. Church congregations and family mentoring teams have provided assistance with budgeting, general life coping skills, transportation, backup transportation, child care, backup child care, car repair assistance, assistance in purchasing cars, etc. As a result, we think lives have been changed, families have become self-sufficient, jobs have been retained and friendships have been established. And probably one of the most important things, not only did we address a need at the present time for a family support system, we believe that through the relationships that if there is a crisis in the future, this newfound support system for these families, they will turn to them before they turn to us again as a public agency. They will look to their church family support system. As a public welfare agency, we are pretty proficient at determining eligibility for programs. We can offer some of the financial assistance that people need. However, because of our high caseloads, we're less proficient in offering the love, the family support, the nurturing that many of our families require, and we can accomplish this by partnering with our faith community. They're in a much better position to do it than we are as a public agency. So when Ottawa County, and in, subsequently, in many counties throughout the State of Michigan, we've called upon the churches and the faith community to fill the void of the traditional family. We've asked church congregations to serve in a mentoring role. Churches have responded generously. I think something else that we didn't really expect was what a greater appreciation and understanding that they have gained, the churches and our community, about the public welfare system. There is now a mutual respect in Ottawa County that we have for one another, and we work very closely. So thank you for the opportunity to share Michigan's welfare reform and Ottawa's story, and especially as it relates to the faith community. We thought it was a great opportunity. [The prepared statement of Mr. Snippe follows:] [GRAPHIC] [TIFF OMITTED] T9973.029 [GRAPHIC] [TIFF OMITTED] T9973.030 [GRAPHIC] [TIFF OMITTED] T9973.031 [GRAPHIC] [TIFF OMITTED] T9973.032 [GRAPHIC] [TIFF OMITTED] T9973.033 Mr. Souder. Thank you. Let me see if--we're having trouble with our machine here. Let me see if we can get this set up because I can see the time and nobody else can see the time. Next is Reverend Jones. Ms. Jones. Hello and thank you for the opportunity to provide testimony to this event. I will not be reading the written statement. Usually I just make ad hoc comments based on the testimony that I have already heard. One thing that was raised as relates to us is although we are part of a larger denomination, when we began our program we did not receive denominational support. Our denomination was not in favor of Charitable Choice. So it wasn't until we were significantly up and running and they actually saw it in the paper did they know, and that was 2 years later. So we did not receive any significant financial support. We didn't receive any significant technical assistance. And even though our denomination has legal advice, we did not receive it. Also are we a small member congregation. We have 100 members at this time and it was less than 3 years ago when we began the project. We are a congregation made up of people in our community. Our community is north central Philadelphia. The community is an economically depressed community. We have a high school dropout rate of 65 percent. At the time we began, 46 percent for the residents of our community were receiving full TANF benefits and less than 10 percent of the community residents within our ZIP code of 30,000 persons were working. At the time we began maybe about 5 years ago, we began doing what normal churches do in our community to help the needy. We started a food pantry. We had a clothing closet, a soup kitchen, and people were coming in on a regular basis; and we started seeing the same people week after week, month after month, year after year. When welfare reform hit, we started seeing more people. And people were coming to us not only for food but they were also sitting with us and saying that they were very concerned--they did not understand welfare reform. They didn't understand what they were going to need to do, but they knew they had to get a job. They didn't understand how they could get a job without training or education. So they were having a hard time dealing with the system and also dealing with fear. So we found ourselves doing a lot of ad hoc counseling; and before we knew it, we were making phone calls to employers. And before we knew it, we were offering tutoring because people started wanting their GEDs. Before we knew it, we had something going on and we wanted to expand it but we did not have the resources. At that time in Philadelphia, the metropolitan Christian Council started to gather together church people that were doing community ministry; and we were one of them. We all came together, and we talked about Charitable Choice and that is how we heard about it. We were the only church of that group that decided to do it, but we were also the only small church with no resources. The other churches were large organizations. They already had separate 501(c)(3)'s, so they didn't really have to do it. They were already set up. We were a local congregation. We did not have a 501(c)(3). Our congregation reflects the community. At the time, I was the only person in the congregation with a high school--with a graduate or upper level degree. We did not have any professionals in our congregation. But our congregation has and had a lot of love. We looked into becoming a 501(c)(3). We brought in a consultant to work with us to build the capacity to have a 501(c)(3). As soon as the consultant said to us that a 501(c)(3) would make us a separate secular organization, the congregation said that is not who we are. We are a church. We are not an agency. We want to remain a church. So we made a decision to do what we do as a church. That was important for the congregation because in this community where people don't have a significant sense of accomplishment, it made a big difference to them to say that our church does this. Since we began, we have served over 189 clients. We have an 87 percent success rate in job placement. And also we find that right now as more and more people who have not successfully traversed the whole welfare reform system--we are finding more and more people with issues related to abuse and other significant family issues coming to us because of the love and support that we give and still finding confusion in county assistance offices. And we are finding that we are serving as an effective liaison between the people and the county assistance offices. We do education and training, job development, job placement. We have a voluntary Bible study curriculum as well. We are careful. Right now we have both private and public dollars. We do not use public dollars for religious education, and we do not proselytize. However, our clients continue to tell us that it feels different; and we also find that we have a greater reach. We can minister to people and to extended family. Many times, someone will come in to us with a significant problem that is not caused by someone in their family that is on public assistance. We, because we're a church, can knock on doors and go into situations that a public agency cannot go in. We have had situations where clients were victims of abuse. They could come in to us. If we were a public agency, we couldn't say what we say as a church. As a church we can say you don't need to go home. If you have to, you can sleep here. An agency can't say that. And we can followup with people at a greater level, and we're glad to do it. Even though we can and would if we had the income pay overtime, right now we don't because our people that work for us don't ask for it. They stay overtime voluntarily. But if they asked for it, we would pay it. I think the biggest issue for us is that what Charitable Choice did for us is it allowed us to come to a table that we normally would not have been invited to. And it also recognized the good work that we were already doing. Just in closing, my grandmother is from a small town in Kentucky. And in that small town is a one-room schoolhouse that she graduated from and went to Fisk University. That one-room schoolhouse produced many wonderful people, but that one-room schoolhouse did it at great strain on the organization. Now in that same community, that same school is fully funded. It makes a tremendous difference. It is not as though the school did not do a good job when it was a one-room schoolhouse. It makes a big difference when there is enough funding to really support what organizations honestly can do. And with that, I know my red light is on so I thank you for the time. Mr. Souder. Thank you. [The prepared statement of Ms. Jones follows:] [GRAPHIC] [TIFF OMITTED] T9973.034 [GRAPHIC] [TIFF OMITTED] T9973.035 Mr. Souder. Next is Mr. Raymond. Mr. Raymond. I want to thank you for the opportunity to present this testimony today. And I am coming from the perspective of a practitioner having worked in Ottawa County with Mr. Snippe, as the executive director of Good Samaritan Ministries, utilizing government dollars to mobilize congregations to get more deeply involved with this process. In my perspectives on the future of faith-based initiatives, Charitable Choice expansion and greater involvement on the part of faith-based organizations including local congregations may be somewhat different than those articulated by others. I want to talk about what I call intermediary organizations. My specific interest is in helping agencies and local congregations move into deeper levels of community connections along a continuum of charity, service, community development, advocacy and social justice. My perspective is that productive and effective work to alleviate poverty entails an integrated approach that includes all of these pieces. In addition, I believe that effective work in this arena needs the proper balance of professional expertise, grass-roots experience, and volunteer mobilization. To rely solely on professionally based services will never be sufficient due to funding and personnel limitations. Over- professionalizing can also lead to a sense of distance and paternalism on the part of the helpers. Conversely, to rely primarily on small, essentially volunteer-driven organizations can limit the scope. I believe that there is a way to combine the strengths of these approaches, minimize the limitations, and achieve a more balanced and integrated strategy with which to address the questions around Charitable Choice and faith-based initiatives. What I am talking about is a process of building connections and capacity within communities and congregations and developing a mechanism that helps average citizens become part of the solution rather than simply disengaged bystanders. Ordinary citizens are looking for ways to be involved and Charitable Choice has opened avenues of involvement. For the past 3 years, I have been working with communities, congregations, and public and private human service organizations to establish what I call intermediary consulting organizations. This concept grew out of my work as executive director of Good Samaritan Ministries in Holland and as a consultant with a variety of groups and congregations throughout the United States. An intermediary organization is an equipping, training, and capacity-building organization that exists between the faith community and the human service community. It is not a church, house of worship, or other religion congregation; and it is not a traditional human service delivery agency. It exists to help bring congregations and human being service agencies and frontline ministries together in common interests, service, and resource development within a community. It is an organization that understands the culture, rules, expectations, and processes of public and private agencies and congregations. It is staffed by people who understand community, agency, congregational, and family systems who can then help make the necessary connections and translate the competing realities and cultures that exist among those differing systems. I think these organizations are needed for a number of reasons. One, public and private agencies often are interested in soliciting help from the faith community, but are unfamiliar with the cultures and the expectations of the various groups. They lack experience in recruiting, mobilizing, training, and supporting congregations. Two, it is more efficient for government agencies to interact or contract with one or a few central organizations rather than try to maintain contact with numerous individual congregations or community-based organizations. Intermediaries can be developed along a variety of organizing principles with different expressions in evangelical, ecumenical, or interfaith opportunities. A faith-based intermediary is often better positioned to win the congregation's trust than a government agency. An intermediary can also build trust with public and private agencies and help them extend their mission by helping to connect families and individuals to ongoing community support systems. An intermediary can be an objective third party or buffer that helps interpret different organizational cultures, expectations, and ways of conducting business. It can also help protect the rights of all involved. An intermediary can act as a central contracting source to channel resources to congregations and help smaller or inexperienced congregations and groups negotiate relationships with city, county, and State officials and private funding sources such as corporations and foundations. There are three basic approaches developing an intermediary structure. The first is to work with an existing nonprofit organization with considerable internal strength, capability, and integrity. A second is to start a new organization when there is no existing nonprofit. And a third is to work with individual congregations as an extension of who they are as a local congregation. The scope of the project has to be taken into consideration. The scope of these initiatives varies depending on the type and the size of the community. For smaller communities, one intermediary can be sufficient. In moderate- sized communities, the picture becomes more complex and more than one intermediary can be indicated. In larger urban areas, several intermediaries may be indicated. The types of faith-based organizations that are involved need to be taken into consideration also. There are three broad types of organizations: Large national and/or international organizations from Protestant, Catholic, Jewish, and other religious traditions. These very large organizations have high visibility and well-developed infrastructure. There are also moderate to large local or regional human service agencies and organizations that exist in most urban and suburban areas in the country. These local and regional organizations usually have well-developed infrastructures and capacity and are key players in the provision of social services in most communities. Many of these larger organizations have utilized a variety of funding sources for many years, including government funding, and have also developed an excellent track record in providing and evaluating services as part of the human service infrastructure in our society. In the debate over faith-based initiatives in the past few years, there has emerged a growing awareness of more front- line, grassroots organizations, such as small neighborhood- based services, community development corporations and congregations of all shapes sizes and locations. In developing an intermediary initiative, all the above organizations need to be taken into consideration. Too often, public and private organizations work independently from one another and proceed from the assumption that their work is mutually exclusive. The intermediary process and attitude can help these different organizations discover ways of working together. The larger organizations can take on the role of an intermediary and begin to utilize their expertise as teaching organizations and community-capacity builders. In turn, I believe many of the larger professional organizations have much to learn from front-line grassroots ministries and organizations. Poverty, welfare, homelessness, and related social concerns are critical issues throughout the country and faith-based organizations; and congregations could be a key part of the solution process. This is not an attempt to privatize welfare or to have congregations or other faith- based organizations replace existing approaches, systems, or jobs. It is a strategy to create strategic structured alliances of professional accountability, frontline expertise, and focused volunteer involvement that builds capacity and blends the best of all approaches so that lives and systems are truly changed. Thank you. Mr. Souder. Thank you very much. [The prepared statement of Mr. Raymond follows:] [GRAPHIC] [TIFF OMITTED] T9973.036 [GRAPHIC] [TIFF OMITTED] T9973.037 [GRAPHIC] [TIFF OMITTED] T9973.038 [GRAPHIC] [TIFF OMITTED] T9973.039 [GRAPHIC] [TIFF OMITTED] T9973.040 [GRAPHIC] [TIFF OMITTED] T9973.041 [GRAPHIC] [TIFF OMITTED] T9973.042 [GRAPHIC] [TIFF OMITTED] T9973.043 [GRAPHIC] [TIFF OMITTED] T9973.044 [GRAPHIC] [TIFF OMITTED] T9973.045 [GRAPHIC] [TIFF OMITTED] T9973.046 Mr. Souder. I appreciate your patience, Ms. Stanley; but you get to be the summer-up. And then we will start into the questions. Ms. Stanley. Mr. Chairman, distinguished members of the committee, I thank you for the opportunity to come before you today to discuss issues surrounding the expansion of government support for faith-based and community organization. I also want to thank Representative Elijah Cummings for inviting me here today. My testimony will include a very brief description of Associated Black Charities, along with an overview of our work in the community with faith-based institutions and other organizations, along with recommendations for actions and activities that we believe should be implemented in order for faith-based institutions to work optimally. I have been executive director of Associated Black Charities for the last 12 years, and the organization was founded in 1985 to represent and respond to issues of special significance to the African American community and also to foster coordinated leadership on issues concerning these communities. From the very beginning, the black church leadership saw the need for an organization like Associated Black Charities and really strongly advocated for our creation. Through the generosity of our individual United Way, corporate, and foundation donors, Associated Black Charities has provided approximately $6 million in grants and thousands of hours of technical assistance to over 300 community-based organizations in Maryland. About 1 million of our grant dollars have gone to faith-based institutions. Associated Black Charities is intimately familiar with the rigorous standards of accountability for Federal dollars. Under contract with the city health department, we provide staff support for what is called the greater Baltimore HIV Health Services Planning Council, and it is a body that is responsible for establishing priorities for the regional funding for HIV services and responsible for setting priorities for about $16 million in Federal funding. We also understand the needs of our communities. Associated Black Charities has been at the epicenter of every major regionwide initiative of note for the last 16 years. As a grantmaker, we recognize that without strong leadership even a major infusion of funds can have minimal impact. Without support and coordination, a fragmented series of programs is frequently redundant and ineffective. In 1994, we created the Institute for Community Capacity Building in order to offer leadership development programs and to provide technical assistance and training to faith-based institutions and other nonprofit organizations. We received advice and counsel from clergy. With funding from the Maryland State Department of Human Resources in June 1996, we partnered with Morgan State University to perform a study of church-based human services, and the results of this human services study informed our technical assistance work. The copy of that study is available in the written testimony. The churches in the study represented several denominations; and while mostly were Black, many of the churches were racially mixed. Some of the findings were that over half of the churches had someone that does coordination on their staffs, but overwhelmingly these people were volunteers. One quarter of the churches had tax-exempt organizations from which human services programs were offered. One fifth of the churches received some type of government funding and two out of three of the churches indicated the need for technical assistance. Of those reporting in our survey, the average budget was $5,000. We now work with something called the Faith Academy which is a collaborative effort with several partners that provides workshops and technical assistance to ministers and laypersons whose faith institutions--and we have had Christians, Jews, and Muslims in attendance--are involved in community outreach. Workshops have focused on, or will focus on, organizational development, economic development, real estate teaching sessions, social, and community development, etc. No one would ever expect that lawyers, accountants, real estate agents, human resources professionals, etc., would be able to do their jobs without training specific to the profession or ongoing information relative to the field. So it is with managing a nonprofit organization that is in the business of helping people. Administrators of not-for-profit organizations must be skilled and have a wide range of knowledge in areas of human resources management, financial management, facilities management, fundraising, and other administrative areas. Faith-based institutions are not-for-profit organizations; and especially if they are going to develop and administer programs serving the community, they must also have leadership that is knowledgeable in these areas. Technical assistance and training is necessary. Faith-based organizations like community-based organizations must have the appropriate infrastructure in place or a funding body must be willing to commit resources in order to ensure that organizations have enough funding to develop it. And, finally, I offer for consideration the idea of using intermediary organizations as funding vehicles in partnership with faith-based organizations, if the Federal Government decides to increase the availability of funding for social programs. Intermediary organizations should be reflective of the organizations with which they are partnering and have the ability to assist in developing evaluation plans for programs, monitor the program development and implementation, and offer appropriate financial management and control mechanisms. And I also thank the committee for allowing me to be here. [The prepared statement of Ms. Stanley follows:] [GRAPHIC] [TIFF OMITTED] T9973.047 [GRAPHIC] [TIFF OMITTED] T9973.048 [GRAPHIC] [TIFF OMITTED] T9973.049 [GRAPHIC] [TIFF OMITTED] T9973.050 [GRAPHIC] [TIFF OMITTED] T9973.051 Mr. Souder. Thank you, and I should have said that Congressman Cummings apologized. He had a meeting that he had to go to and was extremely important. He was hoping to get back before he had to head out tonight, but he wanted to make sure that you all understood he was disappointed that he had to leave. A second thing is that do any of you have planes here? I mean, we're past the time we originally said. How close are you? If anybody needs to leave, just feel free to ask to be excused because we have a number of questions, and this is an opportunity to go across the board on some of the responses. A number of you said explicitly in your--I can watch this and if it is OK, we will do 10 minutes with each one so we can more fully have an across the board on our questions. A number of you said that you did not require participation in religious services, that Bible studies were separate, that faith-based were separate components. Could I have each one of you--if you have an individual program like Reverend Jones, you can respond on your individual program. If you are an intermediary group, respond for people who are intermediary. If you are more associated with the government branch, if you can say how you do with your clients. The question that Congressman Scott asked earlier, do you have a bright-line separation of prayer, Bible study, religious activities from where the government funding occurs? Or does sometimes the line get muddled? You want to start? And we will go left to right. Ms. Jones. Yes, we do have a line of separation, and we do several things to ensure that clients understand what is going on with the Christ-centered curriculum that we also use. For one thing, we do have a 5-day orientation period where we explain to everyone that the faith development curriculum is completely optional; and we do it in a way that people don't feel as though they have to feel bad if they don't accept it. We have had Muslims in our program and we always offer the resources of the imam at one of the local masjids and we also have people that have no faith commitment and we let them know that it is quite all right. The second thing is that every day our educator, at the beginning of the day and at any time, even during the faith- development curriculum, she always begins--even for students who say ``I want to be here,'' she begins by saying you don't have to be here. We also have the students sign a waiver at orientation that says that they completely understand that the faith curriculum is voluntary. We do the faith curriculum at the beginning of the day, or we do it at the end of the day. So in that sense the faith curriculum is kind of packaged in such a way that if a student chooses not to come to the faith curriculum, they don't have to feel bad that they are leaving class or that their day is getting interrupted. So we try to do it in such a way that the people's integrity and sense of respect is maintained. Mr. Souder. Thank you. Ms. Kratky. Ms. Kratky. With 36 different contractors from various different faiths, we absolutely have to have a clear understanding that there are lines that you cannot cross. The groups themselves in the very beginning decided how to do that, and some groups do it just exactly as the pastor has described. They may have services at 7 a.m., and start the program at 8 or at 6 p.m., and end their program at 5. Others, however, have opted not to blur the line at all not to offer any of those services during the program; but instead make it known that after hours if there is a need, they are available. But because we do have so many faiths involved, we have had to be very careful about how that is handled. Mr. Raymond. In our situation, it was more of a mentoring family support process so there is no definite curriculum involved. It was more relationship based. And, again, when we train volunteers, they were told that there is no proselytizing and there is no expectation that the families would attend their congregation or attend any kind of sectarian instruction or Bible study. One of the roles that an intermediary could play--there were a couple of situations where congregations said we want to be paired with a family to provide support but if we are paired with that family, we expect them to attend our church. We politely declined to make a connection to that congregation in that situation, saying that is not allowed under these guidelines and in good conscience we can't make that connection. So to me that is an example of protecting the rights of the participants who are involved in the process. But that did not happen very often. The churches and the volunteers understood what the process was and got involved simply because they wanted to help the people deal with the life issues that they were facing in making that transition from welfare to work. Mr. Souder. Ms. Humphreys. Ms. Humphreys. We do have a bright line. As part of our program, all of the services are funded through performance- based contracting. And so we believe that the burden is on the provider of the service understanding what they are supposed to be doing in order to fulfill the terms of their contract. But we have also put the burden on the recipients of the service as well and have supported them in that. We are in the process of developing materials. There will be posters and pamphlets that will be available in the agencies and churches that we're contracting with. And they will be that ``you are in the driver's seat.'' And it will explain to the participants in the programs what their rights are as they receive services from the contracting entities. So we have taken a two-pronged approach to that. Mr. Souder. Mr. Snippe. Mr. Snippe. We were the government organization that contracted with good Samaritan; and as Bill Raymond just explained, the expectation was from our agency that Good Samaritan Ministries would provide the training to the churches, that this issue would be covered very clearly, and that the expectations were very clearly established and the lines were drawn. As one of my bureaucratic friends in our central office said, can you guarantee me that there will be no proselytizing by the volunteers that are involved? I said, I can't guarantee exactly what is going to transpire between a volunteer and a client. All I can tell you is what is in our contract, what training is expected, etc. When churches would sometimes ask that question, what can we say, we would very definitely give them an answer. On the other hand, if a client would sometimes ask what motivates you, you have been working with me for 6 months, you have helped me buy a car, you did so many things. At that point in time, to share your religious motivation for what is behind it was OK, as long as they opened the door and it wasn't the approach of the church that asked them to participate or it wasn't an expectation of the church. Mr. Souder. Ms. Stanley. Ms. Stanley. This applies to me only as it relates to the funding that Associated Black Charities has given to faith- based institutions over the last 16 years. And in our experience, the faith-based institutions perform these services as their outreach services, as their missionary work. And, of course, they are going to share their feelings, their faith feelings with the people that they work with. That is not necessarily to say that they will proselytize, but it is saying that they are very faith-filled people; and that they do share that faith with the people that they are working with. So in the programs that we fund, we expect that the faith- based institutions are going to share that; and that is not a problem for our organization. Mr. Souder. Do you receive any government funds? Because you say that your primary funding came from the United Way and then private sector funds. If you don't receive any government funds, they can proselytize all they want. Do you have any government funds? Ms. Stanley. Not that we give to the churches, no. Mr. Souder. And let me say, because I did not say this in the beginning--and I am sure this is true for all of us--first and foremost, we respect the work that each you are doing in trying to help meet peoples's needs. If our questions seem overly legal and overtechnical, it is because we are working on legislation right now to make sure that we can work through Constitutionally how we do this. And we don't want to start each thing by saying you are doing a wonderful work, you are doing a great job. We assume that and each one of you wants to tell us the stories of the great works that you are doing and we ask you technical questions. One of the big things I struggle with is--when I go like this, that means I am at 10 minutes. I will give a clue when we're at 9 or 10. One of the problems we have in intermediary institutions is the combination of how do you do the adequate reporting for government and accountability versus making sure you get the maximum dollars to the individuals? I have toyed around for years and I am thinking about dropping this in, but trying to figure out how to do it as we go Charitable Choice legislation of what Bob Woodson said years ago was a ZIP-Code test. That a certain percentage of the dollars have to get into the ZIP Code of where the people live. Because anybody who is working these issues knows that the people who are most effective are there from 7 p.m., till early in the morning, not those who work there often in the middle and go when the problems go. The number of pastors and community activists I met with in Fort Wayne last week suggested to me that one of their concerns is while they understand the need for intermediary organizations, and several of you represent that, how not to have, in effect, them have to go begging to the same intermediary organizations that ignored them in the past. And second, how to make sure that the bulk of the dollars for staff and, say, coverage of health insurance and everything don't go to the intermediary organizations leaving almost enough for the people at the grassroots to pay the light bill. Could each of you kind of address that question briefly? Why don't we start this side first. Ms. Stanley. Our organization is a nonprofit 501(c)(3). And in the instances where we have acted as intermediary for other organizations, there has been a cap on how much can be spent for any program at all. How much on administration. Mr. Souder. What percent is that roughly? Ms. Stanley. Of the grant--10 percent. Mr. Souder. Thanks. Ms. Stanley. And it is different for every grant. In tobacco restitution, it is 7 percent. And the Maryland State legislature set that. But it is our opinion that any organization that is about the business of doing--helping people or about any business at all, really needs to set up appropriate administrative mechanisms. And in order to set up appropriate administrative mechanisms, you have got to have the dollars to fund that. The intermediary organizations, from the way that we operate, all we are doing is taking some administration away from the churches or other nonprofit organizations so that they can be about the business of doing what they do best. And we are just doing the administration and reporting and helping them to do evaluation, etc. So we are taking away the administration. They are doing the programs, and it works beautifully. Mr. Souder. Mr. Snippe, do you have any kind of caps, or how do you address this kind of question? Mr. Snippe. We contracted specifically with Good Samaritan Ministries to administer this relationship-building program. We did not contract with them to provide any specific direct service. And so, again, they recruited and they trained. They did it a whole lot cheaper than what we could, as a government organization, hire our own employees to go directly to the churches. They already had the relationship that was there that we needed. So we thought it was an effective use of dollars. And as I said in my presentation, what we are buying ultimately on the frontline was love, support, emotional support for the people that we serve. We, as an agency, were providing the dollars for rent, for food, etc. So they were doing what they were doing best through the churches; we were doing what we were doing best as a government organization. Mr. Souder. Ms. Humphreys. Ms. Humphreys. We really have taken a flexible approach to this. We have not encouraged intermediary organization nor have we discouraged. We too share everyone's concern about making sure that as many dollars get to the direct service as possible. And so we have encouraged organizations, if they are not capable or don't have the breadth in their organization to do certain things to partner with other organizations; but we have not taken a firm position on intermediary organizations. Mr. Souder. Mr. Raymond, you outlined lots of things of why intermediary organizations are important and lots of challenges. How do you view this particular subject and how to do it? Mr. Raymond. I view it--and that's why I used the term ``consulting'' in the middle of that ``intermediary consulting organization.'' It is an organization that is not focused on, in a sense, meeting a particular mission. Its focus is on to help though neighborhood groups, congregations, meet their mission. It is a lean, focused organization that provides technical assistance, training, resource development from a variety of funding sources, not just government. I think all organizations need to have a diverse mix of funding and the private sector could do a much better job of stepping up to the table and providing funding. So the intermediary consulting organization is really focused on helping other groups meet their mission. Because as an organization, or if I'm a traditional service provider trying to work with congregations, often there is a dilemma of ``I want you to help me meet my mission; and in the process, you may or may not meet yours.'' But if I am focused on helping you meet your mission, I will automatically meet mine as an intermediary organization. So when I do my consulting and work with groups, that is part of the attitudinal change that I think some of the larger more established organizations have to come to grips with in order to partner effectively with grass- roots organizations and congregations in neighborhoods throughout the country. Mr. Souder. Ms. Kratky, in Texas, how have you related to this problem of the intermediary and Reverend Jones's little church and the accountability intermediary? Ms. Kratky. Well, I think work-force boards really are an intermediary organization, as it were. We are a quasi governmental agency, and our funding comes primarily from the Department of Labor and Health and Human Services. So we're held to all of the same rules and regulations that have been discussed earlier by Mr. DeIulio: procurement rules, preaward surveys. Our job is to make sure that the majority of the money goes directly to the provider. We have a cap of 7 percent. Our board made that decision in administration, and all the rest goes to direct delivery. But it's our job to make sure that those contractors do spend the money appropriately, and we monitor that. And I know when Congressman Scott was asking about audits, we--I am sure many of our contractors would love to tell you the horror stories of all of the audits that we have to do. Some of our organizations have been audited in the past 3 months by the Department of Labor, by the Texas Workforce Commission, by the Texas Department of Human Services, by independent auditor, and by me. So I think they feel like they get monitored quite well. Mr. Souder. Maybe they can recruit someone for their church. Ms. Jones. Our experience has been that we have not had significantly good experience with intermediaries. As a small urban congregation in our community, there were no intermediaries willing to fund us. So we would not have been able to start if we were dependent on intermediaries. We did go to intermediary organizations to get funding, but there were none that would fund us. The second thing is that now we have a track record, we have gone to intermediaries; but we have only gotten very limited funding. So right now it requires $134,000 a year to run our project, and the funding we receive from the intermediaries that are out there have been $10,000 or less. So it is not enough to meet the budget for what we do. But that is just our particular experience. Mr. Scott. What was the $10,000? Say it again. Ms. Jones. $10,000. You know, there were intermediaries that worked with us with funds for a particular part of our project or a particular project that we were doing. Mr. Souder. I am convinced--one of the things that you hear and we're all working with is that ``one size fits all'' is not going to do a lot of this kind of stuff. And one of the things is that what we have done in small business is that there are tightening regulations as you go up the grant structure. When you look at the microcredit programs around the world that we have done international, and Bangladesh is one of the more innovative, that the paperwork requirements, auditing requirements based on the size of the grant; and there are a whole bunch of questions that we each may ask. We may give you a couple of written questions too. Mr. Davis, I went way over my time. Mr. Davis of Illinois. Well, thank you very much Mr. Chairman. And you have already indicated that Mr. Cummings had a meeting that he had to attend. He had a lot of faith, but I don't know if he had enough faith to leave redistricting in the hands of his colleagues without being there. Mr. Edwards. That is getting into miracles. Mr. Davis of Illinois. But he did ask if I could read this statement for him for the record in which he says: Mr. Chairman, I am deeply disappointed that Reverend Lynn, executive director for Americans United for Separation of Church and State, will not be accepted and allowed to present his testimony in person before this subcommittee. He is the minority witness that we asked to come today and present his views on the role of community- and faith-based organizations in social services. I understand, however that, his testimony will be entered into today's hearing record. And of course, he appreciates the opportunity for that. Mr. Souder. And I want to say for the record that we did not learn of the witness request until a few hours before the hearing and we had already done the panels and Mr. Cummings and I are trying to work out a future date for Mr. Lynn and we will put the testimony in. [The prepared statement of Mr. Lynn follows:] [GRAPHIC] [TIFF OMITTED] T9973.052 [GRAPHIC] [TIFF OMITTED] T9973.053 [GRAPHIC] [TIFF OMITTED] T9973.054 [GRAPHIC] [TIFF OMITTED] T9973.055 [GRAPHIC] [TIFF OMITTED] T9973.056 Mr. Davis of Illinois. Thank you very much. Ms. Humphreys, I wanted to begin with you and ask: Have you experienced many complaints of discrimination on the part of individuals who may have wanted to work with any of the initiatives that you fund and found that they could not do so? Ms. Humphreys. The faith-based organizations themselves? Mr. Davis of Illinois. Or individuals who may have had complaints against the faith-based organizations. Ms. Humphreys. No, we have not. We do onsite monitoring with the programs that we have. And as I said earlier, we are putting together materials that allow the participants in the program to understand what their rights are as they participate in these programs with respect to proselytizing and other kinds of infringement on their rights to receive specific services. But we have not received any significant complaints. Mr. Davis of Illinois. Does the State of Indiana have a concrete definition of what ``proselytizing'' or what might constitute---- Ms. Humphreys. No, actually, we don't, but we do deal with this issue through our performance-based contracting. And as I said earlier, it is our position that we fund programs to perform certain tasks and to achieve specific results. And those programs do not get paid until they achieve certain results. It is a graduated payment system. So for example: In a training program, the faith-based organization might have a certain percentage of participants who must receive their GED. We potentially, through our contracting process, would support some of the initial capital investment, the acquisition of computers and that sort of thing, but the organizations must perform according to the contract. Mr. Davis of Illinois. And I know that there are a lot of people who use terminology like ``God bless you,'' or ``you be blessed,'' or ``have a blessed day'' and all of these. These kinds of things in all likelihood would not be considered proselytizing. Ms. Humphreys. We would not consider that proselytizing. Mr. Davis of Illinois. I also noted that in a performance- based program--and it sounds like you are saying that one could sing Amazing Grace and whatever they wanted to do, but if the program had to do with individuals passing the GED test and nobody passed, Amazing Grace just wouldn't cut it. Ms. Humphreys. Correct. We are looking at results. We assume that we are purchasing certain services to achieve certain results. Mr. Davis of Illinois. So you have not experienced any real difficulty relative to individuals complaining about any of the things that we have been hearing as possibilities? Ms. Humphreys. No, there was one instance where there were some concerns that came about as a result of one of our site visits, and we have taken appropriate steps in counseling that particular agency. And as I said, we are taking this parallel approach where we are making sure that the contracting agencies understand their obligations, but we are also trying to support the participants in the program so that they understand what their rights are as well. And we anticipate that as that is implemented in the next 3 or 4 months, we may have evidence of additional problems. But right now, we really only have agencies that are 6 months into this. Mr. Davis of Illinois. Has your agency, Ms. Kratky, have either one of you experienced any what one might call extremist entities attempting to be engaged in the activities? Ms. Humphreys. If I could respond, we just put out another RFP and had responses. And out of about 150 responses, only about 50 of those will actually receive contracts; and only about a third of those are faith-based organizations. We, to date, have not had any faith-based organization that would not be considered a, quote, mainstream, and please don't ask me to define what that is. Ms. Kratky. No, in fact we have a bidders conference after we let every request for proposal, as required by our board policy; and during the bidders conference, we talk a whole lot about demonstrated effectiveness. So an organization understands if you are going to go to all the trouble of writing a grant, and that is no simple feat, that you have to show demonstrated effectiveness. And so far, I haven't had any extreme organization who has ever submitted a proposal because I think they know that unless they could demonstrate effectiveness they would be doing a lot of work for nothing. So no. We have had over 1,000 customers served; and we have never had, in 3 years, a complaint about a feeling that they have been intimidated or required to do something that they shouldn't have to do, either from the community-based organizations or the faith-based organization. I think the biggest complaint comes around areas as discussed earlier like child care and transportation and those issues. Those seem to be far greater. Mr. Davis of Illinois. Have any of the providers had experiences with questions of liability or size and scope of activity that would mitigate against small faith-based organization being able to participate? Ms. Kratky. I think that's a great question. I think the biggest challenge for us in this process is capacity building. There are many, many fine small faith-based organizations who want very much to participate, but capacity building and infrastructure building is a significant issue. If you are going to be an intermediary or if you are going to be, as we are, a work force board, you have to be willing to do a lot of technical assistance, onsite technical assistance and training and that, I think, is a big challenge for all of us. Mr. Davis of Illinois. Have you come into any who have decided to consolidate or to amalgamate their efforts in order to be able to do that? Mr. Raymond. I worked with a project in Grand Rapids, MI which is a collaboration of six faith-based groups, Catholic, Protestant, Hispanic Ministerial Coalition, an African American pastors association, and a couple of other ecumenical groups. So those six groups formed a collaboration and are working with family independence agency or public dollars in the Grand Rapids area to be able to have a variety of organizations, large intermediary and smaller groups involved in the process. So I think that is an example to me of a good and creative blending of size and scope and capacity because some of the organizations can learn from the others and find out different ways of doing things and be able to have the scope that the family independence agency wants because it can be difficult for a public entity to contract or connect with a variety of smaller organizations. So this collaborative intermediary helps give the scope that the State wants. Mr. Davis of Illinois. Let me thank you all for your patience as well as participation. Mr. Souder. Will the gentleman yield to a supplement to your question? Mr. Davis of Illinois. Yes. Mr. Souder. Because this came up in a number of my meetings too. Like home health care, if it takes a certain amount of insurance coverage and it takes a certain amount of liability coverage of damages at the facility, have you heard that this is keeping small groups from even applying? Ms. Kratky. It's a line item. It can be a line item in the grant. So that insurance can be covered through the grant in a line item. And we would require that. Mr. Souder. Is that true in Indiana as well? Ms. Humphreys. That's correct. Mr. Souder. And in Indiana, even though most people think of us as a 99 percent German isolationist area, the truth is that in Fort Wayne, we have the largest population of Burmese dissidents in the United States, and clearly social services are being delivered to them. We are becoming a center for Bosnian Serbs, so we're getting applications coming through our system now for those type of groups. Mr. Scott. Mr. Scott. Thank you, Mr. Chairman. I want to thank you again for allowing us to participate. And I want to thank the panel because we have had excellent testimony. Reverend Jones has testified before a committee we held a couple of days ago, and I am delighted to see her again. Reverend Jones, you testified at the last hearing and again this time, that during the program, you don't need to proselytize; is that right? Ms. Jones. Right. Mr. Scott. Did we hear that from everybody? That you don't need to proselytize during the program? Ms. Humphreys. Yes. Mr. Scott. Obviously before and after it is available but not necessary but, during the program, you do not. Is there any--and Reverend Jones, you said day before yesterday that advancing the mission of your program did not require you to discriminate based on religion. Ms. Jones. Right. That's correct for us. Mr. Scott. Does anyone need the--I guess we call it the flexibility to discriminate against people based on religion in order to fulfill your mission? Ms. Humphreys. No, sir. Mr. Scott. The record will reflect that everyone had the opportunity and no one feels that they need the right to discriminate with Federal moneys for the first time in 60 years, certainly since the civil rights bills have passed. I am intrigued on the question of capacity building, the idea of intermediaries is something that we haven't really discussed before. Reverend Jones, you indicated that one of the reasons you liked this idea is that unsophisticated organizations can get funding without the paperwork and other things that usually come with government funding. It seems to me that same problem that would be a disadvantage to a small church would be the same disadvantage to any small community organization. A neighborhood organization trying to do an after-school program, I mean, you know, they don't have election of officers, they are just a group, everybody knows who the leader is, no 501(c)(3) tax- exempt status and all of that. It is just a group that is doing good work. And it seems to me that intermediaries could provide some of the technical assistance in getting a grant and could also serve as the--there is a technical word for it---- Ms. Stanley. Fiscal agent. Mr. Scott. Fiscal agent, that is exactly--so the taxes get withheld, the moneys--when you come with an audit, you have the paper trail and can have receipts and everything and you have someone who knows what an audit is and when it comes they are ready for it. Mr. Raymond, I believe, you indicated that you provide technical assistance for groups, some of which are straight up religious groups. Is this service available to any group, religious or otherwise? Mr. Raymond. Yes. Mr. Scott. So you open your technical assistance to anybody that needs technical assistance in getting Federal or government money to help do good works? Mr. Raymond. The intermediary process--I apply that to the religious community, because I believe that there are many, many in that community that need this type of assistance and need to work together more effectively. But it cuts across a variety of issues, barriers, boundaries and to me it is part of that community capacity building of helping different organizations work together in a variety of ways. And I think we need to pursue that more in our society both, hopefully, through the Charitable Choice process but also other funding stream so that whatever happens to Charitable Choice, there are opportunities for collaboration and partnership building in many ways. Mr. Scott. Well, you don't need Charitable Choice to get government money, so long as you don't proselytize and discriminate. The old rules would work. You have the same accounting problems under Charitable Choice that you would have under the new rules or old rules. But funding faith-based organizations is not contingent upon Charitable Choice. Charitable Choice is a specific legislative proposal that allows you to proselytize and discriminate. And from what I have heard, nobody here needs that kind of flexibility in order to do the good work that you are doing. However, the technical assistance is another area because small organizations, small churches, small neighborhood organizations could benefit from the technical assistance, fiscal agent, withholding the taxes, getting ready for the audit, making sure--applying for the--filling out the RFP and that kind of thing. These intermediaries appear to be able to do that. Reverend Jones, you said that you weren't getting help from the intermediaries. If you had, after you got funded, would having a fiscal agent be helpful to you? Ms. Jones. There are more than one type of intermediary from our experience. One is an organization that the government funds to provide the service and then they subcontract the services out. So when I responded before, I was talking about those types of intermediaries. They receive the money from the government and then they subcontract and then the grants were just too small. The other type of intermediary are those intermediaries who provide fiscal support, which I think is an excellent idea. And also those that provide capacity building, which I also think is an excellent idea. In our experience---- Mr. Scott. What is capacity building? What do you mean by that? Ms. Jones. Capacity building is that you could come in and do training, monitoring, help people with results. In our experience with the State of Pennsylvania, however, we did have a monitor, and our monitor came to visit us monthly, plus as often as we needed him to come. And he actually is the one that worked with us for capacity building, so we did not have the need for an intermediary. And we also hired a CPA so the fiscal stuff was taken care of. But as we expand the field of churches, I doubt that the government will be able to provide a monitor for every church that gets a grant. So I see that as an excellent place for intermediaries that can do fiscal stuff and also do capacity building to make sure that the smaller organizations, especially first-time grant recipients, first-time recipient and understand the language, understand the terminology of the State, understand what the State means with their performance requirements and things like that. Mr. Snippe. Just a comment from an Ottawa county perspective. We have over 300 churches and about 100 of those participated in the mentoring program that I explained before. There was--in no way would we have had the capacity to contract with those 100 churches separately if we did not have Good Samaritan Ministries serve as the in-between agency. Ms. Kratky. Congressman Scott, there is something that you might be interested in looking into. The Rockefeller Foundation has just begun a project in three cities--Boston, I believe, Nashville, and Fort Worth--to look at capacity building. So the foundations are stepping up to the plate and understanding that with more funding becoming available to faith-based organizations, there will be a need for infrastructure building and capacity building and Rockefeller has stepped up to the plate to take that challenge on. Mr. Scott. And part of this could be teaching churches--I mean pervasively sectarian organizations, how to run an after- school program with their own money. Ms. Kratky. That's right. Mr. Scott. How to have literacy programs, how to involve children, how to give awards around graduation time so that children receiving reinforcement are not just the athletes but some of those doing well in academics, making sure that anybody on the Honor Roll gets recognized. Teaching how to do that, even if you are teaching that process to pervasively sectarian organizations, would not be a problem. It is just when you start spending government money to advance one religion over another, we start getting into problems. Mr. Chairman, I thank you, I think this has been an excellent panel. Mr. Souder. Mr. Edwards. Mr. Edwards. Thank you, Mr. Chairman. And let me also add my thanks for your commitment to addressing service social problems throughout our country. Could I ask if each of you has a written policy on proselytizing, could you send a copy of that to the committee? I think one of the questions is not only your good intent to not use public dollars to proselytize, but how do we, despite all good intentions, get that out to the hundreds and thousands of entities and tens of thousands of individuals who would be using Federal funds in this process? I would like to go back to the fundamental question of do we need new Charitable Choice legislation or what is wrong with the longstanding law that has allowed Catholic Charities, Lutheran social services, and other groups to use Federal dollars, but under three conditions: That they set up a 501(c)(3), they don't proselytize, they don't discriminate. In answering Mr. Scott's questions, you said you don't believe you need to proselytize with Federal dollars, you don't need to discriminate in job hiring with Federal dollars based solely on someone's religion. That takes us to the only other reason to have any Charitable Choice legislation and that would be arguing that money should go directly to the church or house of worship rather than the 501(c)(3). And, Reverend Jones, you said that your church chose, for various reasons, not to set up a 501(c)(3). But my concern about not setting up a 501(c)(3) is this: In my home town, the Governor's home county of McLennan County, TX, Waco, TX, a charter school was set up several years ago under State law. People of good faith and intention set up this charter school. They now, 2 years later, 3 years later, cannot account for half a million dollars of taxpayer money. They did not pay payroll taxes. And I don't think they had any intention other than in good faith to provide a good education of children in a low-income area of my area, of my home town. The children had to repeat a year of education and the taxpayers lost half a million to $2 million. If we have thousands of churches getting money directly. Despite all good intentions, some of them may not have an accounting firm or intermediary to help them. And I fear greatly that we will end up having to prosecute churches, as the founders of this charter school in my home town and the Governor's home county, prosecuting pastors and board members of churches, congregation members for misuse of Federal dollars. Not out of any malicious intent, although there might be some out there in the world that would use Federal money for selfish purposes; but they are going to get prosecuted simply because they were not accountants, CPAs, etc. Tell me what is wrong with this argument: let's have the Federal Government provide resources to help churches, houses of worship, figure out how to set up a 501(c)(3). Provide that resource to help them. Let's continue the longstanding law you can't proselytize or discriminate in job hiring using Federal dollars. Tell me what objection any of you might have to that argument. What is wrong with that? I ask that honestly. Tell me what is wrong with that argument. Let's set up 501(c)(3)'s, require that. Can't discriminate. Can't proselytize. Ms. Jones. For us, the 501(c)(3) issue was related to our understanding of what it meant to be a house of worship and the context out of which we do ministry, which is related to our ideology as a house of worship. And, as I stated earlier, for the people in my congregation, it meant that who we were--we were not a church doing ministry, because that organization was separate and secular. The other thing is that I believe that every organization, including nonprofit organizations, have had and will have and can have issues related to misappropriation of funds. The issue I think is training, guidelines, and everything else. When we began the project and we sat with our State monitor, it was our monitor that sat with us and said, OK, Reverend Jones, that you need to make sure that there is a separate account. You need to make sure that you hire someone, because there will be an audit. And once we had that information, OK fine. So I would say that for houses of worship, it would be the same as for other local nonprofits, that we would be instructed whether through an intermediary or the State or grant-writing process. But the other thing is that even with instruction, there is always room for misappropriation and that is not just with churches. Mr. Edwards. I agree, but my concern is that the specter of the Federal Government prosecuting churches all over America really creates great concern for me. And I believe that even the concept of religious freedom and the separation of church and state. Could I ask you, Reverend Jones, in your case, what could your church do legally--what could your church do receiving this money directly as a church that you could not have done had you set up a 501(c)(3)? Ms. Jones. As far as the service that we offer to our community, there is no difference. As far as the way--the impact of doing this ministry on our local congregation from a pastor's standpoint has been significant. We are able, as a church, to offer services that we just couldn't do before. If we set up the--and for those folk that are from small communities, our urban communities or communities where people don't often have a sense of great success, the impact of this ministry on Joe and Jane Average in my congregation when they pass through and see the work that they are doing, we had a situation some--in fact some of our folk are back here from our program--we had an open house and one of the members of our church was there, Mr. Pryor, and he spoke afterwards about how good it feels to him that this is part of our ministry. And how much it means to him because he was denied a job. He had to leave a job because of his lack of education. When we said ``separate, secular, nonprofit'' to Mr. Pryor, his first response was that means we are not doing it. And at our level, at the grass-roots level it means so much to our people to have that sense of ownership around this ministry. And as soon as the consultant said it is not yours legally, that was the issue. Mr. Edwards. How much money does the church receive on an annual basis from the government? Ms. Jones. From the State? Probably about $70,000. Mr. Edwards. $70,000. Do you have an intermediary that handles the finances? Ms. Jones. No. We do--we hire an accountant. Mr. Edwards. You do hire an accountant? Ms. Jones. For the government--for the funding that we receive for our transitional journey ministry. We have separate accounting for that than from the funding that we have with the local church. Mr. Edwards. Do you have a written policy on not proselytizing? Ms. Jones. We have a written policy--yes--yeah, we'll be sending that. Mr. Edwards. OK. Can you at least--and I'll finish with this, Mr. Chairman. Can you at least see--while, you know, you are success stories all of you here, and bless you for that--if all of a sudden you're talking about tens of billions of dollars of Federal funding going out to tens of thousands of entities all over America, that we could end up with a lot of churches getting in difficult trouble with Federal auditors and Federal agents, and then prosecutors, for not setting up a separate 501(c)(3)? Ms. Jones. I don't see that would be a big difference. For one thing there would be--the paperwork required to apply for any Federal grant, if any church can get through it, they probably are able to do the necessary safeguards to ensure they run a credible organization. That's No. 1. The other thing is that the average church isn't going to be applying for $1 million. I think the average church will be like us. We are not $1 million organization and we're not going to be. You know, the $60,000 $70,000 that we receive is what we needed to do what we do because we're a small organization. Mr. Edwards. If this is implemented 20 years from now, I hope in all good faith that you're right. I'm afraid that experience shows that there will be, not necessarily through maliciously intent, but just accounting difficulties and problems, a lot of churches are going to be having to face down Federal auditors. Would the rest of you just--finally, my original question-- any of the rest of you see any fundamental problem with the idea of not proselytizing, not discriminating, and let's have the government help people set up 501(c)(3)'s? Ms. Kratky. I've been dying to answer that question, since I'm a fellow Texan. I'd also like to talk about it from the governmental standpoint, when you asked why charitable choice and why an organization should not establish a 501(c)(3), to be quite frank, from my standpoint, I would have lost three of the best contracts I had because they were from the faith community and they specifically did not want to lose their faith identity. They provide me--for every $1 I give them, I get $2 or $3 in match, and if you know anything about government finance, to get a lot of grants, like Welfare-to-Work, you've got to have a one-to-one or a one-to-two match; and when you can count volunteer time at $11 an hour, you're getting--and if I'm paying $50,000 for that grant, but I'm getting $150,000 in match, and I'm getting success, then that for me personally-- it's not really--it doesn't have to do--as a governmental entity, it isn't about church or state for me. It's about getting services for our clients and getting the most bang for the buck in Fort Worth. Mr. Edwards. And those three churches would have refused to provide volunteers if they'd set up a 501(c)(3)? Ms. Kratky. Yeah, primarily because the money wasn't enough. They didn't need $50,000 or $60,000; they needed $20,000 or $30,000, and to set up a separate 501(c)(3) would not have been expedient or cost effective. But I do understand your point, and I believe that's why in Tarrant County we feel so strongly about having strong technical assistance and strong monitoring. Mr. Edwards. Thank you, Mr. Chairman. And respecting the time of the committee, if there are any others who would like to submit written responses to the question, I'd appreciate that. Mr. Souder. I appreciate both of you joining this debate. We are at the front end of what's going to be an interesting series of votes as different bills move through. I wanted to make sure, for the record, that--I thought I saw in the testimony that Indiana initiated their program after TANF passed, after welfare reform? Ms. Humphreys. Correct. Mr. Souder. And in Michigan it was just before. There was welfare reform, but it took a State law basically that really initiated the program? Mr. Raymond. It was pre-charitable choice. Mr. Souder. But there was a State initiative that did it? Mr. Raymond. Yes. Mr. Souder. And in Texas it began just before national, but Governor Bush initiated the law and it passed in the State? Ms. Kratky. Yes. Mr. Souder. Because there's no question this type of stuff was allowed in the past, but even the charitable foundations moving toward this were stimulated by a combination of State and Federal law. That--another point in searching through, it's been interesting debate about the 501(c)(3), and while it's interesting to you, we're actually trying to debate which way to go in the legislation; and I personally don't understand why somebody wouldn't set up a 501(c)(3) if the technical assistance was there to do it. But it's important for us to understand that some people don't, and if they want to take what I believe is a rather extraordinary risk that their whole church is going to get audited, I'm not sure I should be the person making that decision and that's what we're wrestling through. But, at the very least, we need to be able to have some sort of intermediary organization that--for those who want to, because it's true, for a $30,000 grant, you're not going to go through all the headaches. There's also, I think, a concern if the boards were the same; is it really different anyway than having the church sued? And at the same time, if the boards aren't the same, then the church doesn't have control and there's not the ownership. It's a very thorny thicket, and it's one of the things that we're trying to work through in this process. And you heard me say it and you also heard the White House office say it, in that the irony is the focus here from the perspective of the new administration, the charitable choice is the tail, not the dog. The dog has to try to figure out how to get more funds into the different organizations and the tax reform will do it. The compassion fund right now is not in the bills, and bluntly said, I'm not on the House bill because I believe that this question of how we are going to work through this question is a difficult question. And we are having some differences that we are trying to air and learn in the process as we move through. A third point is that as we--well, you heard our debate, and it was interesting discussion, about private money and public, which leads to the big question that many of us are searching through because kind of like the--a lot of people have misunderstood what the thrust of a lot of this is. We are trying to reach many small institutions that are largely in urban centers, to some degree rural, who have been left out of the existing system; and it's fine to talk about its being allowable, but the questions are what reasons aren't they in, and that many of them are very small and many of them don't know about it. And the question to me from a lot of people in the minority community is how in any new system do you protect that it isn't just going to be the same old people who got the grants and that it isn't going to be the large institutions, and how can we help people at the neighborhood level who are the flowers blooming in many of the toughest areas in the country? How can we get them, to some degree, involved in this process, without which is what I'm very concerned about; and the reason we can debate even when we disagree on the fundamentals is, I'm concerned that while I believe as a committed Christian that part of being a Christian is caring and helping others, and if somebody is hungry or doesn't have shelter, you can't really talk to them about salvation. It isn't ever the business of the government to fund the theological part of the church. And I'm worried that if too many people get hooked into the works part that it will undermine the theological part of the church; and thus, I'm trying to figure out where these lines are, too, and we are trying to work this through. We are not likely to ever totally agree, but we have a lot of the same questions. And in trying to work through this, you've been a tremendous help today. We will continue to have hearings, and you will have been some of the first people to be involved in that process and we appreciate it very much. With that, the hearing stands adjourned. 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