[House Hearing, 107 Congress]
[From the U.S. Government Printing Office]

                       EFFECTIVE SOCIAL SERVICES


                               before the


                                 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

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                     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
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
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
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
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               ------ ------

                               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

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

                       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 
    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 
    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 
    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 
    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 
    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. 
    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.

                   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 
    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 
    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:]
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    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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.


    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 
    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 
    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 
    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 
    [The prepared statement of Ms. Humphreys follows:]
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    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 
    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 
    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 
    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:]
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    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 
    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:]
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    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 
    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 
    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:]
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    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 
    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 
    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 
    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:]
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    Mr. Souder. I appreciate your patience, Ms. Stanley; but 
you get to be the summer-up. And then we will start into the 
    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 
    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 
    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:]
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    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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:]
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    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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.
    [Whereupon, at 5:55 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record