Summary: Charitable choice provisions require states and localities to allow religious organizations to compete for federal funding on the same basis as other social service providers, without impairing the religious character of such organizations. Congress has been considering legislation to expand charitable choice provisions to other government programs. At least 19 states have contracted with faith-based organizations (FBOs) to provide some welfare services. Moreover, states are using various approaches to implement charitable choice legislation. For example, some states have created state faith-based liaisons to promote greater awareness of charitable choice provisions or removed barriers to contracting with FBOs. Several factors have limited the establishment of collaborations between FBOs and states, including some FBOs' lack of awareness and understanding of charitable choice provisions, their reluctance to partner with government, and the limited financial and administrative capacity of some FBOs. Once collaborations have occurred, some small FBOs have had problems (1) covering ongoing costs while awaiting government reimbursement or (2) managing the performance-based contracts because of limited technological and management systems. GAO found no information with which to assess the effectiveness of FBOs as providers of social services. Although some anecdotal evidence suggests that FBOs have been successful, the research community has not rigorously examined the effectiveness of FBOs as social service providers.
