July 2001

• The President's Plan
• Reactions to the Proposal
• The Initiative in Washington
• Alternatives to Charitable Choice
• Actions Outside Washington
• Conclusion
• Sources

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On July 22, 1999, as part of his campaign to win the Republican Party's nomination for president, George W. Bush outlined a blueprint for "Compassionate Conservatism." He proposed that the federal government provide funds to local and faith-based organizations that have developed successful social-services programs. He also advocated allowing taxpayers who do not itemize on their federal income tax returns to take charitable deductions.

As president, Bush moved swiftly to promote these goals. On January 29, 2001, only nine days after his inauguration, he signed two executive orders supporting his campaign proposals. The first instructed the attorney general and the secretaries of Education, Health and Human Services, Housing and Urban Development, and Labor to establish Centers for Faith-Based and Community Initiatives in their agencies. The second order created the White House Office of Faith-Based and Community Initiatives. Bush appointed University of Pennsylvania professor John J. DiIulio, Jr. head of the new office.

"It is one of the great goals of my administration to invigorate the spirit of involvement and citizenship," the president explained before he signed the documents. "We will encourage faith-based and community programs without changing their mission. We will help all in their work to change hearts while keeping a commitment to pluralism."

He continued:

Government will never be replaced by charities and community groups. Yet when we see social needs in America, my administration will look first to faith-based programs and community groups, which have proven their power to save and change lives. We will not fund the religious activities of any group, but when people of faith provide social services, we will not discriminate against them.

As long as there are secular alternatives, faith-based charities should be able to compete for funding on an equal basis, and in a manner that does not cause them to sacrifice their mission.

The following day, Bush forwarded to Congress his plan for "Rallying the Armies of Compassion."

The President's Plan 

The president proposed that the federal government work in partnership with faith-based and community organizations. Bush outlined three courses of action:

1. Eliminate federal barriers impeding the work of effective faith-based and community-serving programs;
2. Stimulate increased private giving to nonprofits, faith-based programs, and community groups; and
3. Create pilot partnerships between the federal government and faith-based or community organizations.

The new White House Office of Faith-Based and Community Initiatives would lead the efforts in the first area. DiIulio and his colleagues would focus on identifying such barriers, proposing legislative and regulatory changes to eliminate them, coordinating new government initiatives, working with the Centers for Faith-Based and Community Initiatives, and working with the Corporation for National Service.

The president also encouraged states to create their own offices of faith-based and community initiatives. Bush proposed making matching federal funds available to the states for this purpose.

As a third means to eliminate impediments, the president called for expanding charitable choice. Adopted as part of welfare reform in 1996, charitable choice enables faith-based organizations (the GuideStar database lists 116,000) to compete with secular groups for government contracts to provide specific social services. "Rallying the Armies of Compassion" advocated extending charitable choice to more programs.

To increase private giving, Bush again proposed allowing nonitemizers to take charitable deductions from their federal income tax. He also advocated limiting liability for corporations that make in-kind donations to nonprofits, faith-based programs, and community groups; enabling individuals over the age of 59 to make charitable contributions with funds from their IRAs without paying taxes on the withdrawals; federal support for a charitable state tax credit; raising the cap on corporate charitable deductions from 10 percent to 15 percent; and creating a compassion capital fund to finance technical assistance and start-up costs for faith-based and community organizations.

Finally, the president called specifically for pilot programs to help the children of prisoners, prepare inmates for release from prison, support maternity group homes, and extend after-school opportunities for low-income children. These initiatives would test and develop the federal government's partnerships with faith-based and community organizations.