[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
  REVITALIZING COMMUNITIES: ARE FAITH-BASED ORGANIZATIONS GETTING THE 
                     FEDERAL ASSISTANCE THEY NEED?

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON FEDERALISM
                             AND THE CENSUS

                                 of the

                              COMMITTEE ON
                         GOVERNMENT REFORM Q05
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 14, 2005

                               __________

                           Serial No. 109-81

                               __________

       Printed for the use of the Committee on Government Reform






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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

               Subcommittee on Federalism and the Census

                   MICHAEL R. TURNER, Ohio, Chairman
CHARLES W. DENT, Pennsylvania        WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut       PAUL E. KANJORSKI, Pennsylvania
VIRGINIA FOXX, North Carolina        CAROLYN B. MALONEY, New York
------ ------

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     John Cuaderes, Staff Director
            Ursula Wojciechowski, Professional Staff Member
                         Juliana French, Clerk
            Adam Bordes, Minority Professional Staff Member














                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 14, 2005....................................     1
Statement of:
    Knox, Thomas, chairman of the board, We Care America; Sister 
      Rose Wilenhaus, St. Mary Development Corp.; Mark Howard, 
      senior vice president, World Vision; and Reverend Michael 
      Jones, Friendly Temple Missionary Baptist Church, in 
      cooperation with the Robert Fulton Development, Inc........    38
        Howard, Mark.............................................    49
        Jones, Reverend Michael..................................    55
        Knox, Thomas.............................................    38
        Wilenhaus, Sister Rose...................................    44
    Streeter, Ryan, Director, Office of Faith-Based Initiatives, 
      U.S. Department of Housing and Urban Development; and Terri 
      Hasdorff, executive director, Alabama Governor's Office of 
      Faith-Based and Community Initiatives......................     6
        Hasdorff, Terri..........................................    13
        Streeter, Ryan...........................................     6
Letters, statements, etc., submitted for the record by:
    Clay, Hon. Wm. Lacy, a Representative in Congress from the 
      State of Missouri, prepared statement of...................    36
    Hasdorff, Terri, executive director, Alabama Governor's 
      Office of Faith-Based and Community Initiatives, prepared 
      statement of...............................................    15
    Howard, Mark, senior vice president, World Vision, prepared 
      statement of...............................................    51
    Jones, Reverend Michael, Friendly Temple Missionary Baptist 
      Church, in cooperation with the Robert Fulton Development, 
      Inc., prepared statement of................................    57
    Knox, Thomas, chairman of the board, We Care America, 
      prepared statement of......................................    41
    Streeter, Ryan, Director, Office of Faith-Based Initiatives, 
      U.S. Department of Housing and Urban Development, prepared 
      statement of...............................................     9
    Turner, Hon. Michael R., a Representative in Congress from 
      the State of Ohio, prepared statement of...................     4
    Wilenhaus, Sister Rose, St. Mary Development Corp., prepared 
      statement of...............................................    46

















  REVITALIZING COMMUNITIES: ARE FAITH-BASED ORGANIZATIONS GETTING THE 
                     FEDERAL ASSISTANCE THEY NEED?

                              ----------                              


                         TUESDAY, JUNE 14, 2005

                  House of Representatives,
         Subcommittee on Federalism and the Census,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:19 a.m., in 
room 2154, Rayburn House Office Building, Hon. Michael R. 
Turner (chairman of the subcommittee) presiding.
    Present: Turner, Shays, Dent, Foxx, Maloney, and Clay.
    Staff present: John Cuaderes, staff director; Ursula 
Wojciechowski, professional staff member; Juliana French, 
clerk; Adam Bordes, minority professional staff member; Earley 
Green, minority chief clerk; and Jean Gosa, minority assistant 
clerk.
    Mr. Turner. Welcome to this hearing of the Subcommittee on 
Federalism and the Census. We apologize for the late delay; we 
were going to be taking up H.R. 2385. What we are going to do 
instead is begin with this hearing, and then we will suspend 
when we have minority representation, we will take up the bill, 
and then we will reconvene as part of the hearing.
    So I would like to welcome you to the subcommittee's 
oversight hearing entitled, ``Revitalizing Communities: Are 
Faith-Based Organizations Getting the Federal Assistance They 
Need?'' The subcommittee will examine how faith-based 
organizations accomplish community revitalization using Federal 
grants.
    The administration's Faith-Based and Community Initiative 
provides a chance for faith-based groups to participate in 
federally funded community development efforts that were 
previously inhibited by bureaucratic restrictions. In the past, 
Federal grant and cooperative agreement programs have commonly 
considered private or nonprofit entities, including religious 
and secular organizations, eligible to receive Federal funds. 
However, interpretation and application of the establishment 
clause of the first amendment, as well as policy decisions by 
administrators, has in the past required publicly funded 
programs operated by religious organizations to be essentially 
secular in nature.
    The importance of this program was self-evident in the 9-
days after his inauguration. The President issued Executive 
Order 13198, which established offices and responsibilities at 
five Federal agencies for faith-based and community efforts. 
The President later issued Executive Order 13279, which 
required that Federal departments treat all organizations 
fairly and without regard to religion in Federal programs.
    A 2001 administration report, entitled the ``Unlevel 
Playing Field: Barriers to Participation by Faith-Based and 
Community Organizations in Federal Social Service Programs,'' 
found that various Federal agencies, including the U.S. 
Department of Housing and Urban Development, imposed burdensome 
regulations on faith-based groups. In response to this report 
and Executive orders, HUD expanded its partnerships with faith-
based groups to promote home ownership, provide emergency 
shelter and transitional housing for the homeless, build 
affordable housing for the elderly and persons with 
disabilities, and promote economic development in 
neighborhoods.
    The White House Office of Faith-Based and Community 
Initiatives urges faith-based organizations to look into 
partnering with State and local governments. To date, 26 States 
and the District of Columbia have set up offices for faith-
based groups and community initiatives to perform outreach and 
other functions similar to those carried out by Federal 
offices. State actions are important because the majority of 
social service assistance is administered through State 
agencies receiving Federal support.
    In the report entitled, ``The Expanding Administrative 
Presidency: George W. Bush and the Faith-Based Initiative,'' 
the Roundtable on Religion and Social Welfare Policy states, 
``The administration has advanced the initiative to leverage 
the work of caring people and private resources to supplement, 
not replace, the government's work.'' Religions and other 
voluntary organizations serve to strengthen families and 
neighborhoods. Proximity and familiarity with the people and 
problems facing communities often qualifies many small faith-
based grassroots organizations as the most suitable social 
service providers.
    It is very important to understand how small faith-based 
organizations can provide for their communities and how the 
government, via Executive orders or legislation, can assist 
those religions groups. Accordingly, this subcommittee will 
hear the successes and impediments to the redevelopment of 
cities via services and infrastructure improvements provided by 
faith-based organizations.
    I am eager to hear from our first witnesses about the 
changes made at HUD and the efforts underway to assist the 
faith-based organizations in their charitable efforts. We 
welcome remarks from Mr. Ryan Streeter, Director of the Office 
of Faith-Based and Community Initiatives at the U.S. Department 
of Housing and Urban Development. Our second witness, Ms. Terri 
Hasdorff, the executive director, Office of Faith-Based 
Initiatives of Alabama Governor Riley's Office, will discuss 
the State's effort to support religions groups and their 
community development projects.
    Our second panel of witnesses will discuss the important 
work that they do and what we can do to help them. First, we 
will hear from Mr. Thomas Knox, the chairman of the board at We 
Care America; second, we will hear from Sister Rose Wilenhaus 
from the St. Mary Development Corp. in Dayton, OH; third, we 
will hear from Mr. Mark Howard, senior vice president from 
World Vision; and, finally, we will hear from Reverend Michael 
Jones from the Friendly Temple Missionary Baptist Church in St. 
Louis, MO.
    I look forward to the testimony our distinguished panel of 
witnesses will be providing today, and we thank each of you for 
your time and welcome you here.
    [The prepared statement of Hon. Michael R. Turner follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Turner. We will now start with the witnesses of our 
first panel. Each witness has kindly prepared written 
testimony, which will be included in the record of this 
hearing. The witnesses will notice that there is a timer with a 
light at the witness table. The green light indicates that you 
should begin your prepared remarks and the red light indicates 
that time has expired.
    It is the policy of this committee that all witnesses be 
sworn in before they testify. If you would please rise and 
raise your right hands.
    [Witnesses sworn.]
    Mr. Turner. Let the record show that all the witnesses 
responded in the affirmative. We will then begin with Mr. 
Streeter.

 STATEMENTS OF RYAN STREETER, DIRECTOR, OFFICE OF FAITH-BASED 
INITIATIVES, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; 
  AND TERRI HASDORFF, EXECUTIVE DIRECTOR, ALABAMA GOVERNOR'S 
        OFFICE OF FAITH-BASED AND COMMUNITY INITIATIVES

                   STATEMENT OF RYAN STREETER

    Mr. Streeter. Thank you, Mr. Chairman.
    The committee has my written remarks. With your permission, 
I would like to offer a highlighted version of those remarks.
    Mr. Chairman, thank you for the opportunity to describe the 
progress being made in the major initiative of President Bush 
and Secretary Jackson, which is improving the quality and 
effectiveness of government-funded social services by making 
faith-based and community organizations eligible to deliver 
those services.
    President Bush has said that the Federal Government should 
work with those organizations that ``provide hope and provide 
inspiration so that the American dream is available in every 
corner of America.'' Toward this end, he signed Executive 
orders that ensure that all faith-based and community 
organizations are able to compete on an equal footing for 
Federal financial assistance in a way that upholds the religion 
clause of the Constitution.
    HUD is actively implementing the President's Executive 
orders. Successfully implementing the President's policies 
requires making changes inside and outside of HUD. Internally, 
outdated and longstanding departmental priorities have made it 
difficult for faith-based organizations to participate in HUD 
programs without fundamentally changing who they are.
    One of the most significant internal changes we have made 
is to our regulations. Until recently, HUD had regulations 
governing nearly $7\1/2\ billion in grant funds that treated 
faith-based organizations in an unequal manner. For instance, 
two programs prohibited primarily religious organizations from 
receiving funds ``for any activity, including secular 
activities'' as a general rule with overly restrictive 
exceptions to that rule. HUD finalized new rules for these 
programs in September 2003 and provided detailed guidance on 
how to implement the new rules in 2004. Also in 2004, HUD 
finalized a rule extending equal treatment provisions to all of 
HUD's remaining programs. We now allow faith-based 
organizations engaging in eligible activities to apply for and 
receive funding for those activities. We do not require a group 
to fundamentally change its identity.
    We are also clear about what cannot be done. HUD's old 
regulations prohibited ``religious influences,'' whatever those 
were. HUD's new regulations clearly state that faith-based 
organizations may not use direct Federal funds for ``inherently 
religious activities, such as worship, religious instruction, 
or proselytization.'' A group may continue to engage in such 
activities so long as they are not funded with direct 
government funds, are separate in time or location from the 
government program, and are voluntary for the Federal program's 
beneficiaries. Furthermore, a direct grant recipient may not 
discriminate in the provision of services to a beneficiary 
based on the beneficiary's religion.
    The point is this: HUD cares about results. Faith-based 
organizations that provide public services for the public good 
should not be excluded because of their faith, and our new 
regulations make that clear.
    Another internal change at HUD involves our grant 
application process. All of HUD's notices of funding 
availability explicitly state that faith-based and community 
organizations are welcome applicants. HUD recognizes that 
larger, repeat applicants often have an advantage over smaller, 
new grassroots groups. In an attempt to level the playing 
field, HUD now awards a point in the grant scoring process to 
grassroots organizations, that is, small groups that are rooted 
in their communities, serving their neighbors on a small 
budget.
    These internal changes at HUD are essential to fulfilling 
President Bush's goals for the Faith-Based and Community 
Initiative, but they are not sufficient on their own. That is 
why HUD has also placed a strong emphasis on outreach and 
education. One of the most significant barriers to the 
inclusion of faith-based and community organizations is that 
they are simply out of the loop, they are unfamiliar with 
Federal grants-in-aid that can assist their mission and work, 
they have been told they have no business partnering with 
government agencies, or they simply believed the government 
programs were not for them and the individuals that they serve.
    In 2003, HUD responded to this problem by appointing faith-
based and community liaisons in each of its 81 regional and 
field offices. These liaisons spend significant amounts of time 
educating grassroots organizations about HUD, how it works, and 
how its funds and other resources can be accessed.
    We have not stopped there. Another significant barrier has 
been the lack of understanding among small organizations about 
what makes the grant application successful. So in 2004, HUD 
completed 180 2-day free grant writing seminars for faith-based 
and other community organizations across the Nation. More than 
16,000 from more than 10,500 organizations participated in 
these sessions, which consisted of hands-on practical grant 
writing training delivered by professionals.
    HUD is committed to continuing its training of grassroots 
groups so that the pool of competitors for HUD funds is 
enriched and our services improved.
    President Bush and Secretary Jackson have made it clear 
that HUD cares about results, and we are beginning to see the 
fruit of our labor in the Faith-Based and Community Initiative. 
We saw more first-time grantees each year between 2002 and 
2004, and the number of faith-based grantees and the dollars 
for which they have successfully competed also rose last year. 
And this is only the beginning. HUD is committed to making sure 
that the most effective organizations receive the taxpayers' 
dollars to serve those who really need our help.
    A level playing field is the best playing field. And those 
who suffer in poverty and despair the best of playing fields. 
HUD understands this and will continue to ensure that all 
eligible organizations, regardless of their size, religious 
affiliation, or lack thereof, are able to compete fairly for 
HUD resources.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Streeter follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
                  STATEMENT OF TERRI HASDORFF

    Ms. Hasdorff. Thank you, Chairman Turner and the 
subcommittee members and staff, for the opportunity to speak 
with you about the positive impact being made by faith-based 
organizations, as well as the work of the Alabama Governor's 
Office of Faith-Based and Community Initiatives [GFBCI].
    Most of us are in public service because we want to make a 
difference in the lives of others. I have been working with the 
Faith-Based Initiative in Alabama for the last 2 years, and 
never before in my career have I seen an initiative that acts 
more as a catalyst for bringing about change in individuals and 
communities.
    Alabama is in the top 10 for a number of children living in 
poverty. We have the lowest budget per inmate in the country 
and the third highest in the Nation for students caught with 
firearms in school, which is an indicator for at-risk youth. 
Substance abuse is also prevalent in our State, where heroin, 
marijuana, and methamphetamine use is steadily increasing.
    There are parts of Alabama with great poverty and need. But 
even in these areas there is a resource that we are rich in. 
Our State is rich with faith-based organizations and people of 
compassion. I am amazed at the willingness of faith and 
community-based organizations to join together with one 
another, as well as those in government, to combine their 
strengths to confront critical issues. This initiative is a 
catalyst for average people to join with other average people 
to do extraordinary things so unique to their hometown that no 
government agency or political body could ever construct or 
mandate a solution so excellently tailored to heal individuals, 
families, and communities.
    The GFBCI is unique in that we have combined the resources 
of the Corporation for National and Community Service with an 
Office of Faith-Based and Community Initiatives. Governor Riley 
made the decision to combine his Faith-Based Office with the 
existing State Office on Service and Volunteerism that 
coordinates the Alabama AmeriCorps program. After all, who is 
more committed to service and volunteerism in communities than 
faith and community-based organizations? As David Eisner, CEO 
of the Corporation for National Community Service, put it, 
``The programs of the corporation act as a vital supply line to 
the armies of compassion.'' Combining these two offices 
maximizes their resources and impact, and is being used to 
leverage ways to meet the most critical community needs facing 
the State.
    The GFBCI was established to serve as a bridge between 
communities and government. This office also directs a 
grassroots homeland security initiative called Citizen Corps 
that provides training and volunteer opportunities for citizens 
in how to prevent, prepare, and respond to disasters. This is a 
natural fit since volunteers in faith and community-based 
groups are often the first to respond and the last to leave in 
disaster response situations. The Faith-Based Initiative is 
woven throughout everything we do and plays a critical role in 
connecting communities to the resources they need.
    Three other important initiatives managed by the office are 
the Alabama Women's Commission, the Alabama Statewide 
Interagency Council on Homelessness, and the Faith-Based 
Substance Abuse Treatment Task Force, which is working with our 
office and the Alabama Department of Mental Health to more 
effectively address the issues of substance abuse treatment in 
our State.
    Alabama has had a very productive relationship with both 
the White House Office of Faith-Based and Community Initiatives 
and the faith-based liaisons within the Federal agencies. The 
staff of the White House Office provided much needed guidance 
and resources as Governor Riley established plans for the 
GFBCI, and they continue to provide resources and pertinent 
information.
    Other agency faith-based liaisons have been invaluable to 
our work. David Caprara, director of the Faith-Based Center at 
the Corporation for National and Community Service, has worked 
extensively with our office, and last year our office partnered 
with the Department of Housing and Urban Development Faith 
Center to host the 2004 Alabama Faith and Community-Based 
Development Conference, where HUD was a major participant. The 
conference was a great success because Federal and State 
government partnered with financial institutions, for-profit 
and nonprofit groups to provide training for faith-based 
organizations who are striving to revitalize their communities.
    One of the great enablers for faith-based organizations are 
financial and technical resources. Unfortunately, the lack of 
those resources is also one of the greatest barriers to their 
success. More funding is needed for capacity-building Federal 
grants like the Compassion Capitol Fund. Other enables are the 
faith center in the Federal agencies who provide up-to-date 
information on the latest grants and funding opportunities, and 
act as an information resource for faith and community-based 
organizations.
    Barriers to overcome are the lack of funding for State 
offices and a lack of clear understanding from the State 
agencies and some faith-based groups regarding the charitable 
choice laws, and what the initiative is and what it is not, 
such as that it is not a new pot of money and it is not an 
affirmative action for faith-based organizations. Helping these 
groups understand that the government can fund compassion, but 
it cannot fund conversion, is one of the biggest parts of what 
we do.
    Our office receives frequent calls from social service 
providers in need of guidance as they attempt to navigate the 
Federal grant application process. The faith-based liaisons 
within the Federal agencies are greatly needed for the State 
liaisons to be able to call upon them for assistance. And as 
the initiative continues to grow, the demand for this will only 
increase. I urge Congress to consider sustaining these offices.
    Thank you for your time and attention. I am grateful for 
the opportunity to speak with you today and share with you how 
the Faith-Based Initiative is making a difference in the lives 
of Alabamians. I cannot overstate my support of this 
initiative, because I see on a daily basis how it draws diverse 
groups into incredibly innovative partnerships that can truly 
transform lives, communities, and perhaps even a Nation. I feel 
very blessed to have the opportunity to serve in my current 
position, and how would be happy to answer any questions.
    [The prepared statement of Ms. Hasdorff follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Dent [presiding]. Well, thank you both for your 
testimony.
    I have a question that I hope you can answer. Mr. Streeter, 
in my district we have organizations like the Conference of 
Churches, Jewish Family Services, Lutheran Ministries, Catholic 
Social Agency. To what extent, to your knowledge, have those 
organizations been embracing the administration's Faith-Based 
Initiative program?
    Mr. Streeter. Thank you for the question, Mr. Congressman. 
We have reached out to a broad group of organizations around 
the Nation, large organizations such as those you mentioned, as 
well as smaller ones, and we found a great receptivity to what 
we are trying to do. When organizations have concerns with what 
we are trying to do, we have been receptive to meeting with 
them and discussing differences.
    I think that we have found a great level of receptivity 
among some of the larger organizations to what we are basically 
trying to do in terms of creating a level playing field. To 
date, I have made with representatives at one level or another 
of many of the organizations that you have met, either in our 
offices or when we have been traveling, and have found that 
whatever differences there might be with respect to specific 
policy proposals that the administration might be forwarding, 
that the general spirit and direction of the Faith-Based 
Initiative is something that they support.
    Mr. Dent. Thank you. And how has your office and your 
efforts progressed since your first time after its 
establishment in 2001?
    Mr. Streeter. I think we have made good progress. Since its 
establishment in 2001, the office, like all the other offices 
across the Federal Government have been focused on a couple of 
very large objectives. One is leveling the playing field and 
making sure that faith-based groups and other smaller 
grassroots organizations are treated equally and fairly in the 
Federal grants application process and in Federal programs.
    So we have made quite a lot of progress in changing our 
regulations. You might be aware that HUD has had a history of 
relatively prohibitive regulations with regard to primarily 
religious organizations, and through a couple of waves of 
regulatory reform we have made sure that the entire set of 
programs at HUD are covered by equal treatment provisions in 
our regulations.
    We have also addressed another major objective of the 
initiative, which is to make sure that organizations that have 
not been exposed to Federal programming and have not played a 
role in Federal programming to date have had an opportunity to 
learn from Federal professionals on how these programs work and 
how to access the funds. So as I mentioned in my prepared 
remarks, we have done lots of grant writing training and 
technical assistance workshops around the country, 180 last 
year, which reaches 16,000 people.
    And what I would also like to point out about that training 
is that these organizations were, by and large, very small; 
about a third of them had budgets under $100,000 and fewer than 
three staff. So we think we are really reaching these 
organizations that are doing the kinds of things the Federal 
Government pays for, but have not been included to date.
    Mr. Dent. A followup on that question really to both of 
you. Again, as you mentioned in your testimony, HUD and 
Governor Riley's FBCI office hold conferences that do instruct 
small faith-based organizations on writing these grants, as 
just mentioned. Has the number of first-time HUD grantees 
increased as a result of this? And how effectively are faith-
based organizations getting the Federal dollars they need to 
help disadvantaged Americans?
    Mr. Streeter. For starters, I will say that as we have been 
tracking them the last couple of grant cycles, first-time 
grantees, being those grantees that have not previously been 
awarded funds under a program at HUD, have increased about 100 
percent in the last 2 years. So we see that as a good first 
step. The data requires a lot of mining to come up with those 
numbers, and we have confidence that in the last couple of 
years we have seen the numbers increase by that amount, 100 
percent from 2002 to 2004.
    Ms. Hasdorff. And I would have to echo that. We have seen a 
definite increase in the State of Alabama with the partnerships 
that are being formed with faith-based organizations and the 
number that are getting the grants. There are still some 
barriers in place, and I think that is something that we are 
working to address through more education and training, 
especially with the local governments, of what the initiative 
is and the nuances of working with faith-based organizations.
    Mr. Dent. And again a question to both of you. After the 
establishment of the FBCI offices and the changes in 
regulation, what more could be done to assist the smaller 
faith-based groups across the country that focus on community 
development?
    Ms. Hasdorff. I will start. The offices I believe have a 
great need for more capacity-building resources. That is one of 
the biggest things that I face. On a weekly basis I am 
contacted by a number of faith-based organizations that are 
looking to partner. I know that our State Department of 
Economic and Community Affairs is contacted quite frequently as 
well. They are the agency in our State that handles all of the 
community development funds.
    And there is definitely a tremendous increase in interest. 
It is just a matter of providing the organizations with the 
training that they need to be strong enough to compete for 
those funds and properly administer them, and then also the 
capacity-building resources for the organizations.
    Mr. Streeter. Mr. Congressman, I will add to that and just 
say that I think the President has spoken very clearly about 
getting charitable choice provisions throughout all Federal 
statutes, and I think that is particularly important in this 
particular instance. I think that Federal resources that 
support community and economic development ought to have a 
clear statement within them, provisional clause that basically 
protects their equal rights in terms of their ability to 
participate in the Federal programs much like we have in the 
charitable choice provisions, and I think expanding those 
throughout Federal programs is definitely a step that we need 
to take.
    Mr. Dent. Mr. Streeter, I have another question. How many 
not-for-profit organizations have you recruited so far to help 
them become HUD-approved housing counseling agencies?
    Mr. Streeter. I don't have exact numbers on the ones we 
have directly assisted. We have done a lot of outreach around 
the country on that particular issue. We have had several 
hundred of them consult with HUD about the requirements that 
they need to start building up in their portfolio. But as you 
may be aware, it takes some time to become a HUD-approved 
housing counseling agency; there are certain things that you 
have to be doing, like providing those services for a year and 
reaching so many people. I do know that we have provided 
assistance in one form or another to more than 500 
organizations over the last 3 years to get them the educational 
resources they need about becoming HUD-approved.
    Mr. Dent. And does HUD intend to make any further 
regulatory changes to assist religious grassroots organizations 
involved in community development?
    Mr. Streeter. At this point, we don't have any regulatory 
reform proposals on the docket. We have done the first wave of 
reform in 2003. We changed eight programs within the Office of 
Community Planning and Development that had explicit, we 
thought, outdated provisions on religious organizations in 
eight programs. We changed those. We created a general rule 
extending those basic provisions to all HUD programs in 2004, 
and then we also did a separate rule for HUD's Indian programs, 
since those required a separate rulemaking process. So to date 
we have made the regulatory changes that we have needed to make 
to ensure that all of HUD's programs are covered.
    Mr. Dent. And again, Mr. Streeter, how does your office 
facilitate cooperation between faith-based organizations and 
State and local government offices? What type of cooperation 
has there been and have you helped facilitate that cooperation 
with these private groups and organizations?
    Mr. Streeter. We do it through direct contact with 
organizations like Terri's on an as-needed basis when there is 
an organization in her jurisdiction that has HUD-related 
issues. We also have faith-based and community liaisons in all 
of HUD's 81 regional and field offices, which is just a 
tremendous asset for this initiative. I think that we have done 
a good thing by appointing those liaisons and creating this 
outreach structure. So our local liaisons play a major role in 
facilitation. They have been building solid relationships with 
a wide swath of faith-based and community groups in their 
communities, and they often take the lead on ensuring that 
those faith-based organizations are connected with the local 
unit of government that they need to be to get their needs 
addressed and their questions answered.
    Mr. Dent. And again, Mr. Streeter, which State FBCI office 
would you grade the highest and why?
    Mr. Streeter. State FBCI office?
    Mr. Dent. Correct.
    Mr. Streeter. We have several that are high performers. It 
would be difficult for me at this point to say which ones are 
performing better than others. One stated objective of the 
President's initiative over the next couple of years is to 
increase our cooperation and coordination with the State 
offices. So we are, internally, right now consulting with the 
White House Office of Faith-Based and Community Initiatives 
developing a basic State checklist that we want States to take 
a look at, that they would be able to measure themselves 
against. And when that work is done, we will be more than happy 
to share it with you. Until we have that work done, I would be 
hesitant to say which offices I thought were performing better 
than others.
    Mr. Dent. OK. And before I turn the gavel back to the 
chairman, I would just like to ask Ms. Hasdorff does Alabama 
give out State grants to faith-based groups that are involved 
in community development?
    Ms. Hasdorff. We do. They are given out through the local 
governments and the HUD funds that come to the faith-based 
groups. We are not presently tracking, but we are working with 
the State agencies within Alabama to put in measures in place 
so that we can begin to track that. And as soon as that data is 
available, I would be happy to share that with the committee.
    Mr. Dent. Thank you. We would appreciate that.
    With that, I will return the gavel to the chairman.
    Mr. Turner [presiding]. Pardon me for not only exiting, but 
also not having been present for your answers to the previous 
questions. I am certain there is going to be some redundancy 
here. But I want to go to the issue with faith-based groups, as 
they start to get capacity and expertise in working in areas 
where either before they had been prohibited or before had not 
targeted for receiving funding for social service efforts, I 
wonder to what extent if people raised the issue of measures of 
success, that they are either going to be impacted because they 
are startups or if we already are hearing some anecdotal 
information about their level of success compared to other 
programs. Could you talk a moment, both of you, about what you 
are seeing either in discussions of measurements of success 
that might be applied; the impact of the fact that these 
organizations are going to, in part, be startups and how it 
might impact, they might need some lead-time to be able to show 
significant success; or, three, if you already have some 
evidence or anecdotal data that shows the success of these 
organizations? Mr. Streeter.
    Mr. Streeter. Thank you, Mr. Chairman. I am happy to 
respond to that. We have been noticing a level of growth in 
both interest and ability among smaller organizations, 
grassroots groups, faith-based and otherwise, that haven't been 
involved in our programs until now. We will be, in conjunction 
with the White House Office of Faith-Based and Community 
Initiatives, over the next year, collecting even more of these 
anecdotal pictures of that success, because we are starting to 
see some penetration by groups that were not formally involved 
in Federal programs.
    What I would like to point to is that in the grant writing 
training that we conducted through HUD around the Nation, 180 
2-day sessions which were free to the public last year--and we 
are doing more of those this year--we did a participant survey 
and we looked at what that survey showed us, and we saw that we 
were definitely reaching a small organization with not a lot of 
experience. I think one in four of the faith-based 
organizations in that training had not ever applied for a 
Federal grant before, and one-third of those organizations were 
smaller than $100,000 a year in terms of their overall budget. 
So we had a large representation from smaller organizations. We 
also had larger, very experienced organizations there as well.
    After that was completed last year, we did a rough survey 
of participants that had been involved, and there were 
thousands of organizations involved around the country. But we 
were able to track down nearly 100 organizations last year that 
had received funding that they attributed to something that 
they had taken away from the training, that built a capacity 
within them to successfully complete. Together, that total of 
funding was nearly $45 million; not just HUD funding, but a 
variety of sources of funding, other Federal agencies, some 
private sector funding, as well as State agencies. That, to us, 
was a signifier that we are headed in the right direction.
    I think we are seeing organizations that did not have the 
knowledge and, in some cases, the confidence to partner with 
other organizations in their community to approach either the 
Federal Government or a State or local office that managed 
Federal funding to get in the game, so to speak. We think those 
are initial signifiers of success, and we look forward to 
producing similar results as we move forward.
    Ms. Hasdorff. Mr. Chairman, one of the things that we have 
been working on in Alabama is looking at a performance outcome 
driven aspect to our office and to working with faith-based 
organizations. We are very fortunate in Alabama that we have a 
team of internationally known experts on return on investment 
[ROI]. They work in the corporate world but also have been 
applying what they do to the public sector as well. We have 
contacted them and they have committed to work with our office 
on implementing outcome measures for all of our programs. We 
are also developing outcome measures that can be used for 
faith-based organizations.
    And as I go out and speak across the State to faith-based 
organizations that are training for capacity-building 
resources, one of the first things that I always encourage them 
to do is implement outcome measures from the ground up as they 
are starting these programs, to start them with that in place 
so that they have some system in place to measure what their 
successes are. We have found that is very important and 
critical to the work that we are doing, and we are also putting 
surveys and data collection in place so that can be measured 
more effectively in Alabama.
    Mr. Turner. Well, it would seem, certainly as many of the 
faith-based organizations have a theological basis for wanting 
to engage in the very types of outreach and social services 
that many of the grant programs are trying to direct, you are 
harnessing a level of energy and commitment that would 
certainly seem to add to the likelihood of success, or at least 
certainly the energy and enthusiasm.
    Let us say there is a faith-based organization out there 
who has not yet participated in the programs that HUD has had 
on grant writing sessions, who sees a need in their community 
and wants to begin the process of looking at how their 
organization can participate in receiving funding to assist in 
social services outreach. What advice would you have for them 
today as they begin to look out in their community and then 
look to both the Federal Government and the State and local 
governments for assistance? Mr. Streeter.
    Mr. Streeter. That is a good question, Mr. Chairman. I 
would begin by first of all saying that you want to make sure 
your mission is clearly defined and you are true to that 
mission. The most successful organizations all say the same 
thing: ``we never change our mission to pursue the dollars; we 
pursue dollars to the extent that it buttresses and supports 
our mission.'' That is the first thing. The second thing would 
be to make sure that your community partnerships are solid and 
strong, that you partner judiciously with other organizations 
that have certain contributions to make to your mission-
critical aspects of your organization.
    After you have done that, I think you are in a good 
position to start consulting around the community on what the 
best opportunities are for you in terms of funding.
    As it relates to HUD, when an organization has an interest 
in HUD-related activities and HUD funding, the first thing that 
I would advise them to do is to be in touch with one of our 
local liaisons. As I mentioned earlier, we have liaisons for 
the Faith-Based and Community Initiative in each of HUD's 81 
regional and field offices. We think that is a great asset to 
our organization. It certainly gives people a point of contact 
very close to home. And our HUD offices are also very well 
connected and known by the local agencies, either the city or 
State agencies that manage HUD funding. They are the first 
point of contact and will always be able to meet with an 
organization to help them identify where they have particular 
needs and what types of HUD opportunities might support those 
needs. That is the best place to start.
    When an organization runs into some particular problem and 
they need some headquarters mediation, then they always call 
us. But our liaisons have been a great front line of activity 
for us. They achieve a lot. They meet with organizations, and 
the portfolio of organizations they are working with really 
grows every day.
    Ms. Hasdorff. I would echo that. Basically what we have is 
quite a few of those types of groups that come to our office on 
a regular basis, and one of the first things that I say to them 
is to not be the Wal-Mart of social services, to isolate one or 
two areas of focus, make those an area that you have a passion 
for, that you would do whether or not you had any kind of 
government assistance in doing them or not. And then we have 
three Cs that we encourage them to keep in mind: capacity 
building, which is obviously one of the most important, making 
sure that they have the right board structure, the right 
501(c)(3) setup, all of that; making sure that they have 
collaboration, partners that they can work with who can help 
them not reinvent the wheel, that they can work with to build 
those types of programs they are looking to develop without 
duplicating services. Then the third thing that we try and make 
them understand is that the government can fund compassion, but 
not conversion, and to keep that aspect structured properly 
from the beginning in how they are building their programs so 
that you can isolate out certain portions for Federal fundings 
if that is what you are looking to do.
    Mr. Turner. As you are looking to assist faith-based 
organizations, are you finding that there are still impediments 
either within HUD or within other organizations or agencies in 
rules and regulations that HUD must deal with that are outside 
of your control that provide an impediment for faith-based 
organizations to access funding and partner?
    Mr. Streeter. One thing, Mr. Chairman, that comes to mind 
is that an organization will sometimes find that its local unit 
of government has particular procedures and practices which are 
at odds with what we are doing, our particular local ordinances 
or other rules that are in conflict with the principles that we 
have articulated in our regulations. And when we come across a 
situation like that, we deal with that on a case-by-case basis. 
We try to be as responsive as we can. We involve our counsel's 
office and build a relationship with the local unit of 
government, if we need to, to intervene in that way. So that is 
one thing that organizations may run into.
    I think that increasingly the impediments are less having 
to do with our regulations, since we have changed those. I 
think they are finding a greater receptivity in HUD-funded 
programs because of what we have done with the regulations, and 
more simply the need to build their knowledge base of how to 
access those funds. So I think ongoing education, a stronger 
relationship with Governors' offices like the one that Terri 
runs, and a continuing role for our liaisons in the field is 
the best way to overcome that knowledge gap.
    Ms. Hasdorff. And I would agree with that and basically 
just add that I think a lot of times in local governments, 
especially, there is a fear of partnering with faith-based 
because they don't understand how the initiative is structured, 
and sort of the separation of church and State concern. Once we 
sit down with them and explain a lot of times how the 
initiative actually works, that alleviates a lot of that 
concern. But it is something that there is a real need. That, I 
guess, is probably one of the largest impediments. And what we 
have said earlier about the capacity-building side of things. 
The organizations a lot of times have a passion for what they 
want to do, but they have not been working in this long enough 
to have the proper structure in place. So making sure that they 
are a little bit more sophisticated and able to compete before 
they approach a funder like that for a grant is typically the 
two largest impediments that we have found.
    Mr. Turner. In my next question I want to acknowledge my 
predecessor, Tony Hall, who was the Congressman from the Third 
District of Ohio, who now is the U.S. Ambassador to the U.N. 
Food Program, who in 2001 was the co-author and co-sponsor of 
H.R. 7, that was an attempt to legislatively expand the 
opportunities in this area for faith-based groups and 
organizations. And recognizing that we are currently operating 
under Executive order, I wanted your thoughts, Mr. Streeter and 
Ms. Hasdorff, as to our needs to make certain that, as we begin 
this process, that we have one that can have longevity. As we 
look to the investment that we are making in capacity building 
for faith-based organizations, I know many are concerned that 
if there is a change of administrations that does not have the 
same view on this issue, that faith-based organizations might 
have the rug pulled out from them. I would like your thoughts 
as to how we might proceed and what needs there might be in 
that area.
    Mr. Streeter. Thank you for the question, Mr. Chairman. I 
think that, for starters, making sure that charitable choice 
provisions and equal treatment language, statutorily speaking, 
are adopted in as many programs as possible. The President has 
made a commitment to making sure we have charitable choice 
legislation that guarantees the equal treatment of faith-based 
organizations, and I think that is a top priority of this 
administration. I think, as well, the continuing capacity-
building. Resources is a real need in the Compassion Capitol 
Fund. It would be better if it were fully funded, and the work 
that it is doing is great and provides resources to grassroots 
organizations all around the country to help them get their 
organizations up to speed, and a continuing commitment there I 
think is also essential.
    I also would say that the goal of our center is to make 
sure that as many of HUD's program offices as possible are 
operating with proper guidance on how to implement our 
regulations, and we have produced guidance to that effect. I am 
confident that, with the ongoing adoption of the guidance that 
we have provided throughout our offices, that our program 
offices themselves will operate in a way that is truly fair and 
equitable to faith-based groups and other inexperienced 
grassroots organizations.
    Ms. Hasdorff. And I know that for myself personally--and I 
would say that this would probably be true of many of my 
colleagues in other States that have Offices of Faith-Based and 
Community Initiatives--if there weren't these types of offices 
on the Federal level or in the White House, I think that there 
would be a real deficit, because you have so many groups that 
come to you and many times have questions that they need 
clarification on or that you are looking for assistance in 
locating specific grants that they want information on. Having 
someone who is a liaison within the agencies to be able to call 
is invaluable.
    The other thing, if you weren't to have an Office of Faith-
Based and Community Initiatives in the White House or in the 
agencies, you would still have the charitable choice laws in 
place, but you just wouldn't have quite as much of a mechanism 
for education and training for the faith-based organizations on 
how to properly implement that. So I would strongly urge 
legislation to try and move that forward.
    And I have to echo what Ryan said about the CCF, the 
Compassion Capitol Fund. I think that is so critical to this 
initiative, because there really is a need for that to be fully 
funded. That is one of the largest needs that our office has as 
a State faith-based office.
    Mr. Turner. I have one more question before we turn to my 
colleague, Mr. Clay, for his questions. In all of the 
presentations that we have today, even the testimony that is 
coming in the second panel, there is a great deal of effort and 
focus on the issue of funding faith-based organizations, social 
service activities is not funding religious activities. And I 
think, Ms. Hasdorff, you made the issue of we are not funding 
activities of conversion. And I applaud the White House's 
efforts and HUD's efforts and the faith-based groups and 
organizations that have tried to make certain that the 
sensitivity of providing social services to individuals, versus 
providing religious instruction or other activities not be 
funded.
    But there is the reverse of this also, which I would like 
for you to talk about for a moment, and that is the issue that 
was somewhat prevalent in the situation we were in before the 
efforts to include faith-based organizations, and that is the 
conversion of religious organizations to non-religious 
organizations, the actual constraining or restricting religious 
organizations in, for example, the presentation of religious 
symbols, limiting the types of activities that can occur in 
various spaces and places. That balance is, of course, 
obviously very important, because as we try to harness that 
love for trying to provide social services to others through a 
religious or a theological view, you don't want to suppress 
that ability for a religious organization to identify itself as 
a religious organization.
    Could you speak to that for a moment and your efforts to 
ensure that this is not a burdensome restriction on religious 
organizations as we encourage them to undertake this process?
    Mr. Streeter. Yes. We have made it very clear in our 
regulatory language that faith-based organizations retain their 
independence as faith-based organizations. If you take the 
faith out, they are no longer faith-based and they lose a 
critical part of who they are. There are certain things that 
are important to maintaining their level of commitment to their 
faith and being able to operate with government funds: one, 
they want to make sure that they are able to look and feel like 
the faith-based organization that they are. Many of them want 
to be able to hire people who share their fundamental religious 
views. Many of them want to make sure that the motivation that 
is provided, that it gives the impetus to their staff is 
something that is able to be maintained. We have made it very 
clear that independence is protected. And the view of this 
administration is that the religious nature of an organization 
ought not be compromised.
    At the same time, we have made it very clear that they need 
to be able to conduct their religious activities in a way that 
is separate from the government-funded activities; needs to be 
separate in time or location, those activities need to be 
voluntary for anyone assisted with the Federal funds. And I 
think we have been clearer than previous rules and regulations 
have been. There is a myth out there that we are blurring the 
line between church and State. In fact, I think we have made 
the line much clearer. I think that in our regulatory language 
we have spoken very clearly about what constitutes inherently 
religious activities.
    And I would also like to say that the many hundreds and 
thousands of faith-based organizations that we have dealt with 
in conferences and in workshops, that have dealt with our 
liaisons or visited us in our office, are very comfortable with 
those changes. Many of them are very well educated about what 
they can and cannot do, and none of them have the intent of 
using government funds to promote their religious mission. It 
is ultimately up to them. They need to be able to decide 
whether or not it is worth it to take the strings that are 
attached to Federal funds to be able to carry out their 
mission. We just think there should be a level playing field. 
And we found a great receptivity to the nature of the changes 
that we have made and a great appreciation for the degree we 
have gone to protect the religious identity of the 
organizations involved.
    Mr. Turner. Ms. Hasdorff.
    Ms. Hasdorff. This has been an issue that has come up a lot 
on the State level as well, and I think that one of the things 
that I have encouraged the different State agency folks that 
have talked to me about this is to understand that we are 
looking for the best providers of social services across the 
board. If faith-based organizations can compete for that and 
are given a seat at the table, and they come in as the top 
provider for that social service under the grant guidelines, 
then they need to be the one who is considered being awarded 
that. But, on the same token, we try and structure things in 
such a way so that they are not being unfairly burdened to try 
and change their program so much that it is not going to be the 
same program once you get through with the funding being given 
to them.
    I think one area to really consider looking at, though, 
more in depth on this is the voucher issue. I know the 
President's Access to Recovery Grant has been something that 
our State has applied for and did not receive this last go-
round, but we hope that there will be additional opportunities 
to apply for grants like that, because I see that as a real way 
to effectively address this issue and protect both interests.
    Mr. Clay. Thank you, Mr. Chairman. Let me also thank you 
for conducting this hearing on such an important subject.
    I will be brief, since we are in the middle of votes on the 
floor.
    For Mr. Streeter, since the implementation of the Executive 
order in 2002, has HUD been forced to address cases of 
employment discrimination or instances where beneficiaries felt 
they were forced to play a role in religious activities from 
faith-based organizations?
    Mr. Streeter. It is a great question, Congressman Clay. 
Thank you for the question. I am happy to respond. We have had 
surprisingly little activity in this area. We have, in a case-
by-case basis, addressed certain complaints that might arise, 
either through a grantee or through a local State office where 
they feel as though there is a problem in one of those areas. 
To date, we have not had any particular situations where the 
employment discrimination issue has involved our involvement. 
There have been a couple of instances where we have received 
calls from a local grantee that believes that some faith-based 
organization is upholding some type of religious foil in terms 
of how it serves its beneficiaries, and we have intervened and 
usually made sure there is clarity on that. And in each case it 
has been resolved to the satisfaction of all involved, 
including our general counsel's office.
    Mr. Clay. So you address the issue as it comes up.
    Mr. Streeter. Right. We address this on a case-by-case 
basis as these complaints and questions come to us about issues 
related to either the nature and condition of employment of a 
faith-based organization or the requirements placed upon the 
people being served.
    I should say we have found really virtually no problems, 
though, with respect to faith-based organizations placing 
religious conditions on the people that they serve. They are 
there to serve their communities, and it doesn't matter to 
them. And those who receive HUD funds especially it does not 
matter to them what the religious persuasion, or lack thereof, 
is on the people that they are serving.
    Mr. Clay. Would it be possible for you to provide this 
committee with some kind of data on how many complaints and 
what types?
    Mr. Streeter. I would be happy to do that.
    Mr. Clay. Thank you very much.
    And my last question, Mr. Chairman, to Ms. Hasdorff, is 
since the Executive order was issued, can you indicate whether 
there has been an increase or decrease in the number of faith-
based providers in your State, and if there has been an 
increase, has the sharp increase in Federal funds under this 
administration allowed for more participation by faith-based 
groups in your State?
    Ms. Hasdorff. Yes, sir, I would say that there has been an 
increase, and I believe that the President's emphasis on this 
initiative and the charitable choice legislation has paved the 
way for that to be something that is infiltrating into the 
faith-based community. I think that more and more are becoming 
aware of the opportunities that are now available to them. It 
is amazing how every time this is mentioned in a speech or 
something like that, our office is continuously contacted after 
that. So, yes, I would say there is a definite increase in 
faith-based organizations.
    Mr. Clay. Do you see the government depending more on 
faith-based organizations to do the work that was traditionally 
done by the government?
    Ms. Hasdorff. I see the government picking partners who can 
most effectively deliver those social services in the best way 
possible. And I think that there is an increase in 
partnerships. In some ways that may shift to more work being 
spread around, but I think that what it is is looking for the 
most tailored solutions to communities. And this seems to be an 
initiative that is a catalyst for building a lot of energy into 
communities that may not have looked to those resources in the 
past.
    Mr. Clay. Well, thank you for your response.
    Mr. Turner. Thank you. They have called a vote, so that is 
why you see the Members leaving. So we are going to recess for 
the Members to vote. We are finished with panel one. I want to 
thank you for your time here. And if there is anything else 
that you would like to add in your testimony as a result of 
what you have heard today, feel free to present that to the 
committee and we will add it and supplement the record with 
your additional comments.
    So we will recess this portion. When we come back, we will 
convene the business meeting to handle legislation, and then we 
will reconvene for panel two.
    Thank you all for being here today.
    Mr. Streeter. Thank you, Mr. Chairman.
    Ms. Hasdorff. Thank you.
    [Recess.]
    Mr. Turner. I would like to bring to order the Subcommittee 
on Federalism and the Census and reconvene our hearing on 
``Revitalizing Communities: Are Faith-Based Organizations 
Getting the Federal Assistance They Need?''
    We are now going to introduce our second panel. But before 
we do so, I would like to ask you all to rise to be sworn in.
    [Witnesses sworn.]
    Mr. Turner. Let the record show that all witnesses have 
responded in the affirmative. Our four panelists for this panel 
are Mr. Thomas Knox, chairman of the board of We Care America; 
Sister Rose Wilenhaus, St. Mary Development Corp.; Mr. Mark 
Howard, senior vice president for World Vision; and Reverend 
Michael Jones, Friendly Temple Missionary Baptist Church, in 
cooperation with Robert Fulton Development, Inc.
    I would like to now turn to Mr. Clay for a statement.
    Mr. Clay. Thank you, Mr. Chairman.
    I want to say I am proud to welcome a constituent, Pastor 
Michael Jones of Friendly Temple Missionary Baptist Church of 
St. Louis. I have had the pleasure of visiting Friendly Temple 
and am very impressed with the work that congregation does in 
St. Louis. Pastor Jones leads an organization that is based in 
the heart of the inner city of St. Louis, serving an area with 
the highest incidence of poverty throughout the region. Some of 
the major issues Pastor Jones and his members seek to remedy on 
a daily basis include high unemployment, reducing the number of 
children living in poverty, poor housing quality, and the 
extensive needs of the elderly and the infirm.
    It gives me great pleasure to welcome him before our panel, 
and thank you for yielding.
    [The prepared statement of Hon. Wm. Lacy Clay follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Turner. Thank you, Mr. Clay.
    This committee looks forward to receiving your testimony.
    We will begin with Mr. Knox.

   STATEMENTS OF THOMAS KNOX, CHAIRMAN OF THE BOARD, WE CARE 
  AMERICA; SISTER ROSE WILENHAUS, ST. MARY DEVELOPMENT CORP.; 
MARK HOWARD, SENIOR VICE PRESIDENT, WORLD VISION; AND REVEREND 
 MICHAEL JONES, FRIENDLY TEMPLE MISSIONARY BAPTIST CHURCH, IN 
      COOPERATION WITH THE ROBERT FULTON DEVELOPMENT, INC.

                    STATEMENT OF THOMAS KNOX

    Mr. Knox. Thank you very much, Mr. Chairman. And I thank 
you for the privilege of testifying today before the committee. 
My name is Tom Knox. I am chairman of the board of We Care 
America, a faith-based nonprofit, and I am bringing you 
greetings from the entire leadership team who is actually in 
California right now, all of them providing technical 
assistance to 115 different community and faith-based groups as 
part of the Compassion Capitol Fund Grant.
    Dave Donaldson was the founder of this organization. He 
started it in 2001. And he started it because of a personal 
experience where his father was killed by a drunk driver and 
his mother was badly injured, and Dave and his family had to 
rely on the compassion of the government, local churches, 
community groups, and even corporations that provided 
everything from food, clothing, companionship, and even 
mentoring Dave and his family.
    Dave's goal in starting We Care America was to provide 
guidance and expertise to similar organizations that helped 
him, who were small, didn't have the capacity and ability to do 
things on a large scale, but were extremely influential in his 
own life. And our continuing mission at We Care America is to 
unite the efforts of leaders, churches, organizations, 
government, and corporations to provide effective solutions and 
bring lasting change to spiritual and social crises that affect 
so many.
    We Care America continues to be a strong supporter of the 
administration's Faith-Based and Community Initiative. We see 
this initiative as taking a step to the ``Shining City on a 
Hill'' so eloquently described by President Reagan. And it is a 
combination of public resources with the love and compassion of 
faith-based and community organizations, and it is powerful and 
transformative. And we have been able already, in just a short 
time, to help more than 140 non-profits garner first-time 
funding from the Federal Government and have disbursed more 
than $10 million to these groups. In southern California, our 
region for the Compassion Capitol Fund, we have more than 40 
ministries we are helping and have trained more than 4,000 
groups to date on capacity-building to drastically increase 
their reach and scope.
    One transformative agency partnering with We Care America 
is Templo Calvario, the largest Hispanic church in America. It 
is located right next to an empowerment zone in Santa Ana, CA, 
an area which 80 percent of the residents are foreign-born and 
live in poverty. And when you go out there, you just see them 
as an oasis in this chaotic area. To answer some of the needs 
of its neighbors, Reverend Dan DeLeon started Obras De Amor, 
Works of Love, a benevolence program which each week provides 
groceries, clothing, furniture, counseling, referrals, and 
emergency assistance to 250 families. In addition, Works of 
Love operates after-school centers for elementary school 
children, sponsors teenagers at summer camp, donates backpacks 
loaded with school supplies, and distributes Christmas toys to 
4,000 children.
    Works of Love, of course, cannot meet every need and, as a 
result, must leverage itself with other organizations. In 
addition to delivering its own services, it provides groceries, 
clothing, furniture, and occasional funding to a network of now 
60 other churches and community-based organizations called the 
Kingdom Coalition. In turn, those members extend from Los 
Angeles to San Diego and are now providing food, counseling, 
after-school centers, and furniture to more than 80,000 people 
a month. And when you see their operation, extremely 
sophisticated in what it does.
    Food and shelter, of course, are essential for sustaining 
life, but they are not the only essential elements. Shelter is 
necessary. And here is where the partnership of Templo 
Calvario, We Care America, and now the Federal Government is 
bearing much fruit. The Church, aided by Federal dollars 
through the Compassion Capitol Fund, in 2002 started Templo 
Calvario Community Development Corp. This community development 
corporation [CDC] focuses on six core things: affordable 
housing; business and job creation; education; youth programs; 
a Senior Service Enterprise that provides home care, 
transportation, and other services to seniors; and a community 
fair for more than 100 community organizations.
    We Care America provides technical assistance to the CDC 
through a 3-year Compassion Capitol Fund grant, Templo has 
about 20 organizations that it, in turn, is helping to grow 
with We Care's help.
    Although the administration has at least temporarily 
removed many barriers to public funding of faith-based and 
community organizations, some barriers still remain. Just this 
past week, Reverend DeLeon, when he was in town, recounted to 
one of our staffers that he faces barriers frequently at the 
State and local level. Reverend DeLeon said he needs to educate 
the State and local officials regularly that it is OK for them 
to partner with a 501(c)(3) and provide services to the most 
vulnerable in his community.
    Even locally there is an organization called Beach Care 
within the last 2 years is providing soup kitchens, thrift 
shops, counseling centers, and after-school programs, and I 
watch with the $35,000 capacity building grant they have 
created a board and gotten their budgets in place and are now 
able to increase what they are doing, but spend their time on 
fundraising instead of having the funds allocated to do more 
good work.
    At We Care, we are proud to partner with ministries and 
community organizations that do a lot to provide solutions in 
their neighborhood. Barriers, however, still remain. The simple 
fact that we can't rattle off at this point hundreds of 
examples is an example of detractors that have had a chilling 
effect on providing a level playing field for the faith-based 
organizations to provide social services.
    Through the Compassion Capitol Fund, the capacity of many 
charities on the front lines has been raised, and the charities 
are delivering more aid, with more accountability, to our 
Nation's poor and needy. As their capacity increases, these 
neighborhood charities will increase the competition for public 
funds, which should help the taxpayer in the long run, in 
addition to the poor and needy.
    However, whether it is in the housing market, providing 
substance abuse treatment, or even after-school programs, there 
must be a concerted effort to communicate the principles of the 
faith and community-based initiative down to the State and 
local level without the fear of litigation that stops providers 
from being successful. And that hiring rights are long-held 
historic traditions in all faith communities in this Nation and 
that voucherizing social services may be the most effective way 
to navigate the current landscape.
    Thank you again for the opportunity to address the 
committee.
    [The prepared statement of Mr. Knox follows:]

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    Mr. Turner. Thank you, Mr. Knox.
    Sister Wilenhaus.

               STATEMENT OF SISTER ROSE WILENHAUS

    Sister Wilenhaus. Good morning. St. Mary Development Corp. 
was started in 1989 in Dayton, OH, in Montgomery County. Our 
mission is to provide community development and provide housing 
and holistic services to low-income residents.
    We began our work when we were prompted by seeing the look 
of hopelessness in the eyes of the residents in a depressed 
neighborhood in East Dayton. We try to bring hope to the 
declining neighborhoods by empowering people to do all that 
they are capable of doing, and to create an environment where 
all things are possible.
    We focus our efforts around these guiding principles: faith 
in God, firm commitment to the community, development and 
empowerment of the people, and persistence in purpose.
    Throughout our 15 year history, we have expanded our 
programming to include Southeast Dayton Housing to serve as a 
general contractor to provide single-family homes and rehab 
homes, specifically, many times for senior citizens.
    Another one of our primary goals is the creation of 
affordable housing as a catalyst for neighborhood development. 
We currently have five senior buildings that is home to over 
600 independent living seniors of low to moderate-income. We 
provide a unique quality of life at an affordable price for low 
and moderate-income seniors.
    St. Mary Development places a high priority on 
collaboration with other non-profits with the city, State, 
Federal Governments. We rely on partners for assistance with 
transportation, health care services, nutritional counseling, 
and senior fitness programs. One of our senior buildings even 
has an in-house grocery store for the convenience of in-bound 
residents.
    We partner with colleges, the transportation agency, 
NeighborWorks of America, Ohio Capital Corp. for Housing, and 
we do all of this in complete partnership; otherwise, our 
organization would be able to do very little. The local 
churches provide residents with spiritual needs. We have 
neighborhood prayer breakfasts, gospel choirs, weekly visits 
from ministers, and residents' Bible study groups, that nourish 
not only the body, but the soul and keep hope and love alive in 
our residents.
    St. Mary's has also created a Home Ownership Center of 
Greater Dayton. Its mission is to educate and empower residents 
of Greater Dayton area to achieve and sustain home ownership 
and financial success. We provide training in many areas, 
particularly right now we are focusing on assistance to victims 
of predatory lending.
    St. Mary's has also been committed to the education not 
only of children, but adults. We began with the GED program 
with the Dayton public schools. We have Head Start programs 
with Miami Valley Child Development, and we are also partnering 
with Richard Allen Academy Charter School areas. Children in 
poor areas and parents need education in order to achieve what 
they always wanted.
    In spite of these achievements, we know we have lots to do. 
Cities don't deteriorate over night, and rebuilding 
neighborhoods and restoring hope to their people is a lengthy 
process. SMDC has barely scratched the surface, and the 
resources are not available to address all of the present 
needs. We continue to search for funding to help achieve our 
mission.
    Federal grants to faith-based organizations like St. Mary 
are essential if we are to continue our work. Unfortunately, 
Federal grants are often intimidating and create impossible 
barriers for small organizations. We just finished a 202 
project that took four people 5 weeks to do, and all of the 
other work that they would have done had to be put on hold. We 
would like to see that changed. We would like to have Federal 
agencies help with grants to underwrite performance-driven 
programs that deliver positive, measurable effects. Faith-based 
organizations are usually grassroots and are close to and 
trusted by the neighborhood organizations and residents. They 
have the advantage of knowing first-hand the needs and 
priorities of the communities they serve.
    We really appreciate this opportunity to share our 
experience with you. We are fortunate to have developed into a 
vital, resourceful organization that is now large enough to 
deal with significant programs that will favorably impact the 
people we serve. We are looking forward to continuing to 
practice our mission and serving a diverse population in a 
caring and dignified manner.
    We thank you.
    [The prepared statement of Sister Wilenhaus follows:]

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    Mr. Turner. Mr. Howard.

                    STATEMENT OF MARK HOWARD

    Mr. Howard. Good morning. Thank you, Mr. Chairman. Thank 
you, Member Clay and other members of the committee, for 
inviting World Vision to testify before your committee today. 
My name is Mark Howard, and I serve as the general counsel for 
World Vision, and I have served in this role for the past 15 
years.
    World Vision is a Christian relief and development 
organization operating in nearly 100 countries, with an overall 
budget worldwide of about $1\1/2\ billion. In 2004, World 
Vision in the United States contributed $800 million to this 
total, of which $285 million came from the U.S. Government. 
World Vision has over 1 million private donors from every State 
and congressional district in the United States.
    Motivated by our faith in Jesus, World Vision serves the 
poor, regardless of a person's religion, race, ethnicity, or 
gender, as a demonstration of God's unconditional love for all 
people. We understand and respect the cultures in which we 
work, and we do not proselytize.
    Within the United States, World Vision works in 
collaboration with thousands of local faith and community-based 
organizations. In 2004, World Vision assisted more than 1\1/2\ 
million American children and adults. Here in Washington, DC, 
World Vision is working with at-risk youth on the streets and 
in the schools in Wards 7, 8, and in Prince George's County. 
World Vision is working on a cutting edge program in northern 
Virginia to break the vicious cycle of gang violence.
    And World Vision is one of the largest non-commercial 
providers of school supplies both here in Washington, DC, and 
across the Nation through our gifts-in-kind program.
    While the majority of World Vision's grants from the U.S. 
Government are for international programs, we have been growing 
our domestic programs with both private and public resources. 
The domestic portfolio currently includes funding from the 
Department of Health and Human Services, the Department of 
Justice, the D.C. Appropriations bill, and the Department of 
Housing and Urban Development. World Vision has applied for and 
won two HUD rural capacity building grants for a combined total 
of $600,000 to be disbursed over the next 5 years.
    World Vision would like to thank President Bush and the 
U.S. Congress for its support of the many faith-based and 
community initiatives. These numerous efforts have begun to 
reduce the barriers for faith-based organizations, with the 
goal of bringing a level playing field for all organizations, 
both faith-based and secular. However, for World Vision and 
other faith-based organizations, the reforms have not gone far 
enough. While we are invited to participate and apply for all 
programs, in many cases the price of participation, especially 
on U.S. domestic programs, is too high. We are asked to forfeit 
our right to hire staff that share our faith, which we refuse 
to do.
    Religious staffing is essential to the character of our 
organization, and is protected by the exemptions set out in 
Section 702 of the Civil Rights Act of 1964.
    Some of the programs World Vision and other faith-based 
organizations are being invited to participate in do not 
recognize this key religious staffing freedom. The Youthbuild 
and Youth Offender Re-entry opportunities are two such 
programs. Both of these programs carry Workforce Investment Act 
stipulations that roll in at the local level. These 
stipulations would require World Vision to forfeit our 
religious hiring requirement in order to participate. Each 
program is from an agency World Vision has accepted funds from 
in the past without any restrictions in religious hiring.
    In particular, Section 188(a), subparagraph (2) of the 
Workforce Investment Act prohibits organizations from hiring 
employees based on religion. While the funding for Youthbuild 
programs comes directly from HUD, the fact that any Youthbuild 
grantee must be a mandatory partner in a One-Stop Center pulls 
over the Workforce Investment Act requirement and effectively 
prevents World Vision from accessing such funding, since World 
Vision will not forego our hiring based on religion.
    In evaluating this grant opportunity, World Vision's 
ability to engage in a timely conversation with the faith-based 
office of HUD was essential. The faith-based office assisted in 
detailed fact-checking of our internal legal review. The 
knowledgeable input we received from the HUD faith-based office 
confirmed our own legal review and reinforced that the 
appropriate decision for World Vision was not to submit a 
proposal. The faith-based offices are aware of these issues and 
World Vision hopes Congress will change these statutory 
restrictions to conform to the exemption containing the Civil 
Rights Act of 1964.
    World Vision strongly supports H.R. 1054. Not only should 
the Office of Faith-Based and Community Initiatives be 
codified, but also expanded so that organizations, particularly 
those without the resources and staff of World Vision, can get 
the guidance and assistance that they need.
    World Vision believes that religious staffing is essential 
to the religious integrity and autonomy of faith-based 
organizations. The White House Faith-Based and Community 
Initiative Offices have played an integral role over the past 
few years in educating and advising grassroots faith-based and 
community organizations. Although the playing field is far from 
level, the ability to access these offices ensures that issues 
of concern to organizations like World Vision will receive the 
attention they deserve.
    I would be glad to entertain any questions you have. Thank 
you for allowing us to testify.
    [The prepared statement of Mr. Howard follows:]

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    Mr. Turner. Thank you.
    Pastor Jones.

              STATEMENT OF REVEREND MICHAEL JONES

    Reverend Jones. Thank you, Chairman Turner, Ranking Member 
Clay, and other subcommittee members, for this opportunity to 
share with you Friendly Temple's accomplishment with community 
revitalization.
    Friendly Temple Church, also known as FTMBC, is a faith-
based organization committed to leveraging its resources and 
building relationships to revitalize its community surrounding. 
With the establishment of nonprofit corporations, development 
of several properties, coordination of congregational members, 
and the collaboration with various community partners, FTMBC 
has been able to make a significant impact on the community it 
serves.
    Friendly, also known as FTMBC, is located in the heart of 
the inner city of St. Louis, MO. Our surrounding area is 
characterized as one of the areas in the city of St. Louis with 
the highest incident of poverty. We have, for example, one of 
the highest incidents of unemployment; census tracts with the 
highest proportion of persons living in poverty; highest 
percentage of children living in poverty; poor housing; many 
tracks of vacant, abandoned, and boarded up homes; also a high 
incident of crime.
    We are located in an area that many of you are all too 
familiar with, that represents America's disinvested community.
    Because of the needs, our congregation wanted to make a 
difference in the lives of people around FTMBC, so we created a 
nonprofit organization called Robert Fulton Development, Inc. 
Many of FTMBC's outreach efforts are managed through Robert 
Fulton, established in 1996, named in honor of our founding 
pastor, Robert Fulton Davis. The mission of Robert Fulton is to 
revitalize the community by maximizing the potential of all 
community members through a holistic approach, focusing on six 
areas: one is children and youth development; education; health 
services; counseling; food and clothing; and affordable 
housing. Through these six focus areas, with the dedication of 
a strong volunteer base, Robert Fulton has been able to serve 
the community with a number of initiatives from feeding the 
hungry to tutoring school-aged children. These services operate 
through and from FTMBC facilities and depend strongly on the 
dedication of its members. FTMBC invests in the world of Robert 
Fulton Inc.
    The members of our church have contributed various skills 
and talents to serve the needs of the community. There are a 
number of individuals gifted with skills in areas like 
organizational development, management, food preparation, 
carpentry, general maintenance, and child care, key skills 
needed in the delivery of the many outreach services offered 
through the church. With just as much commitment there are also 
a number of professionals who donate so much of their time and 
efforts toward fulfilling the church's outreach mission. They 
represent professionals such as education, counseling, law, 
accounting, social work, computer science, engineering, and 
architecture.
    In addition to utilizing the skills and talents available 
through the congregation, our church has also been successful 
at building community partnerships with government entities, 
Federal and local, corporations, other churches, colleges, 
universities, and other community organizations. These 
partnerships have enabled Friendly Temple to increase the 
impact of its work by serving more people and developing 
projects at a larger scope. Through the leveraging of resources 
and building of relationships, we have been able to do much. 
For example, we serve at least 4,000 individuals annually 
through our various outreach programs; we have been able to 
also develop 10 housing units for low to moderate-income 
families through the renovation of decaying properties; develop 
our first senior housing project; we also renovated a 40,000 
square foot building, now known as our Family Life Center; we 
have been given, granted, awarded, a 202 project and now the 
second one is in the works; we also operate a VITA project as 
well; and through the development of our corporation in the 
last 5 years, we have been able to produce projects totaling at 
least $15 million in gross abilities.
    And because of the Executive Order 13279, many of our 
faith-based organizations were pleased to hear that this 
opportunity was made affordable unto us, and I will say that 
our opportunity to share and to serve with HUD has been a 
wonderful relationship with us, not only with our initial 202 
program, but we have the second one coming, and they have 
provided wonderful resources in support of our 202 programs as 
well.
    I think my time is up.
    [The prepared statement of Reverend Jones follows:]

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    Mr. Turner. Well, first off, I want to thank each of you 
for participating today. I know it took a tremendous amount of 
time for your participation and for your attendance. But also I 
want to thank you for your dedication to your communities and 
to the people whose lives you are trying to impact, because as 
part of your ministry, this is certainly a giving effort, and 
it is one that makes a big difference to our country and to our 
neighborhoods. When we look at issues of community development 
and community capacity building, we always find people who are 
giving, taking time away from their professions or the lives of 
their families, and I know with each of you that this is a love 
that can be transforming for communities.
    It is great to have a hearing where people talk, in terms 
of social services, in the context of love, because so many 
times the issues of outcomes can overshadow the most effective 
delivery system we have, which is, of course, through love.
    As you heard from the beginning panel that we had, panel 
one, we focused on the changes that occurred that allowed 
greater entry and access for faith-based organizations. We also 
discussed a little bit the issue of the ease of access and what 
needs to happen in capacity-building, and then we also talked 
about whether there needs to be changes in the current 
structure or status with need for legislation either to lower 
additional impediments that may be present or to codify what 
currently is there so that groups and organizations like yours 
do not have your rug pulled out from underneath you. And then 
also we talked about the issue of the reverse conversion of the 
fear of government imposing upon you the conversion from 
religious organizations, religious-focused organizations to 
secular organizations.
    I would like to start our discussion really focusing on 
those four things, but with the first question of looking at 
faith-based organizations and the access to Federal funds, both 
from your own perspective and what you see from assisting other 
faith-based organizations, what help do you or they need 
currently in facilitating the access to these Federal funds? 
Mr. Knox.
    Mr. Knox. Well, I appreciate the question. I think in We 
Care's case, the greatest impact it has made, even today 
training 115 organizations, is the technical training to 
understand how to access the funds. I think a couple years ago, 
when this all came about, there was a great groundswell in 
interest, and at the We Care offices the phone was ringing off 
the hook: how do I access it; what do I do? People thought the 
floodgates were going to open. They quickly realized two 
things: No. 1, there was a fear developed about taking the 
money, which is a good thing. People ought to know it is the 
right thing for their organization. But, second, like the 
distinguished lady next to me said, people spend months working 
on grants; they take existing staff, because they can't afford 
new staff, and pull them away from current projects to work on 
different grants.
    And I think that making the funds available for training 
and also equipping organizations like We Care and other faith-
based organizations who are helping educate the ability to have 
technical training on call to increase their Web tools, to 
increase allow the smaller organizations--a lot of them are 
budgets of $100,000, $200,000 $300,000, maybe even less--to 
access technology to be able to increase their capabilities to 
access the funds. And I think the education, the technical 
assistance is extremely important in that regard. Otherwise, 
people get frustrated 3 or 4 months in and stop, and will never 
ever attempt to access it again.
    Mr. Turner. Sister Rose.
    Sister Wilenhaus. He said it perfectly. It is the technical 
training and the ability to hire staff that can carry that out.
    Mr. Turner. Mr. Howard.
    Mr. Howard. I think a common theme you have heard, both in 
the earlier testimony and in what you are hearing here, is 
capacity-building is a huge issue for smaller grassroots 
organizations, something World Vision has been working on as 
well. As Pastor DeLeon was referenced in the earlier testimony 
from Mr. Knox, the other issue is the education of State and 
local officials about the faith-based initiative and the impact 
of the imposition of local ordinances and regulations on faith-
based organizations when it is tied to the use of Federal 
funds. I think that would be of huge assistance.
    Mr. Turner. Reverend Jones.
    Reverend Jones. Thank you, Mr. Chairman. I also agree with 
capacity-building. Our organization has really been working for 
a number of years in this area and has also talented and gifted 
people who volunteer much of their time and services to our 
work. If we had the ability to bring those people on, it could 
really increase our opportunities of expansion, and growth as 
well. Second, I would also mention that I think it would be 
helpful, as we have had, an entry point of contact within the 
organization such as HUD. We have always had someone to 
facilitate us, to oversee us, and to really support our work as 
well, and I think that point of contact is critical as well.
    Mr. Turner. Very good.
    At this point I am going to defer to Mr. Clay.
    Mr. Clay. Thank you very much, Mr. Chairman.
    Let me start with Sister Wilenhaus.
    Sister Wilenhaus. Yes.
    Mr. Clay. Welcome.
    Sister Wilenhaus. Thank you.
    Mr. Clay. Let me say, as a faith-based nonprofit 
organization, how have the recent charitable choice rules 
improved the climate for St. Mary's to provide social services? 
Specifically, Catholic Charities has been utilizing government 
funds for years, so how have these changes improved your 
ability to provide services?
    Sister Wilenhaus. Thank you. We probably would have never 
thought to apply for a Federal grant if this change had not 
come about. So that was a big start for our organization. We 
have also been able to think about partnering with other 
agencies that we didn't believe we would be able to do. So that 
is extremely important to a small nonprofit, to be able to hold 
hands with a bigger organization.
    Mr. Clay. Thank you for that response.
    Mr. Howard, in your experience, has the self-imposed 
restriction on religious hiring requirements limited the number 
of persons qualified to work for World Vision? Do you find a 
shortage of qualified workers with restrictions such as this? 
And wouldn't religious restrictions hinder the quality of work, 
since you don't always have the best people to provide 
services?
    Mr. Howard. Thank you, Mr. Clay. We haven't had that 
experience to be true in the United States. We have always been 
able to find highly qualified people who are willing to make a 
change in their lifestyle to come to work for a nonprofit 
organization, even one that imposes the kind of faith 
restrictions that we have. We have not found that to be 
difficult.
    Mr. Clay. OK. You mentioned Youthbuild, which I am very 
high on; I think it is a great program that helps young people 
transition to world of work.
    Mr. Howard. Absolutely.
    Mr. Clay. What is the difference in having someone with a 
religious affiliation or with a nonsectarian affiliation teach 
those kids?
    Mr. Howard. For us it goes to the fundamental issue of 
people who share our concerns and our mission. It is not so 
much the technical capabilities that drives the issue around 
religious hiring restrictions, it is those who share our 
passion, who share our faith, who shares what drives us. We do 
what we do because of who we are. We don't do what we do 
because we can do it, we do it because of who we are as 
Christians.
    Mr. Clay. OK. Well, thank you for that response.
    Pastor Jones, welcome. Generally speaking, Pastor, what are 
the areas of greatest need in the St. Louis community, are they 
housing related or are there other pressing needs, such as 
social services, emergency shelter, day care programs, that 
need to be addressed? What do you see as the greatest need?
    Reverend Jones. Congressman, I see probably all of the 
above. We try and reach out in many areas of the mentioned 
areas that you have listed there, and housing is critical, 
especially in our area. Outreach services, once a person lives 
and moves within a community, they then will need additional 
resources to work and additional resources for their children, 
additional resources for other capacities as well. So I see a 
combination of all the above as we try and reach the entire 
individual as well.
    Mr. Clay. Having visited your offices in November of last 
year, I saw first-hand that you are a well deserved recipient 
of the 2003 HUD St. Louis Field Office Shining Star Award. You 
obviously know how to design and implement a program from its 
creation to completion. As you work with other faith-based and 
nonprofit social service groups, what practices can you share 
to help them become more effective and efficient in their 
operations, and are there universal managerial practices that 
you consider key to fulfilling a project's goal?
    Reverend Jones. Yes. Thank you, Congressman. We have, in 
our area, established a coalition of churches, religious 
leaders who are working together to try and achieve similar 
goals, and in and with this organization we think that there 
are skills and talents within the framework of the organization 
where we can share with each other strengths and weaknesses, 
and try and improve upon the weaknesses and share the strengths 
within, which creates an opportunity for effective service to 
the community and effective application of resources, a 
disbursement of resources efficiently within the community as 
well.
    Our experience within this organization, there are some 
smaller churches who have not the experience that maybe we 
have, and we have an opportunity to share with them, to help 
educate them, to train them within and enable them to put them 
in position to do work as we do it as well.
    Mr. Clay. Someone like mentoring.
    And my final question, Mr. Chairman, as a faith-based 
community development organization, have you encountered 
resistance from other foundations or private funding sources to 
partner with because of your religious affiliation?
    Reverend Jones. I can't say directly that we have. We have 
been blessed with many opportunities, but I will tell you that 
primarily our organization and our church has really funded 
itself through its own resources. We have been assisted greatly 
by the resources that the Federal Government has given us, but 
we always would like to be partners, bringing our portion to 
the table and working with individuals. So since we have 
something to bring to the table, we typically are not rejected, 
often, when we are applying.
    Mr. Clay. Thank you. Thank you for your responses.
    I thank the entire table for their responses. I appreciate 
it, Mr. Chairman. Thank you.
    Mr. Turner. Pastor Jones, I would love to hear your 
thoughts on the issue of being a faith-based organization, 
being required to hire those individuals who have no faith, or 
even individuals who might be antagonistic to faith, what 
impact, if any, that might have on your faith-based 
organization.
    Reverend Jones. Well, interesting for us, we are in a 
unique position. Our membership totals over 4,000, and we have 
a great wealth of talented pool of people who are qualified and 
would love to share in our work and in our ministry as well. 
But even when we have had the opportunity to hire from without, 
we typically don't see any problems, if you will, with hiring 
individuals such as those who may not share the same faith or 
the same religious commitment that we have. We have done it. We 
have partnerships, we have relationships with them and it has 
worked well.
    Mr. Turner. I want to congratulate you on your success. Mr. 
Clay was commenting on the size of your organization and your 
effective outreach program. So that is certainly a sign of 
excellent success, and the numbers of people that you are 
reaching.
    I want to turn back to the topics that we had in the first 
panel, and if you could talk about current restrictions that 
still might be an impediment. We have talked about local 
ordinances. If there are others that you know of that we need 
to take into consideration, it would be great to hear those 
from you.
    Mr. Knox. Well, I think one of the things I notice from a 
little bit more of a global board perspective of working with 
We Care America is the perception and the fear of organizations 
who could leverage faith-based organizations to a new level, a 
fear of getting involved. For instance, I feel like the 
corporate sector, which traditionally gives a larger amount of 
money, only maybe 2 to 3 percent of that money goes to faith-
based organizations because there is a perception of what that 
may entail. And I think the education of the corporate 
community, understanding what the Federal Government is doing 
to bring down those walls, can leverage, maybe even double some 
of the funds that are coming into these organizations.
    The second thing that I think is more of a knowledge basis 
across the country of best practices, and I think that one of 
the things that needs to be done, if possible, is to track the 
performance of organizations that have received funds, how they 
have done it professionally, how the accountability brought on 
by receiving Federal funds has helped in their growth, and 
allow other organizations to grow in that.
    So they can probably answer a little more directly on some 
of the restrictions. Again, we train people on what those 
restrictions are, but I think that a lot of it also is in the 
perception and allowing others to get involved.
    Mr. Turner. Sister Rose.
    Sister Wilenhaus. I also agree that it is the perception of 
what a not-for-profit faith-based organization is doing that 
sometimes causes other groups not to want to fund or to give 
you the assistance that you might need. Maybe some of that is 
our own fault, as faith-based organizations, that we don't 
speak to what we really do strong enough and loud enough in the 
community.
    Mr. Turner. Mr. Howard.
    Mr. Howard. We have already spoken to the regulations. I 
think to go through and look at all the various programs that 
faith-based organizations could quality for domestically and 
just ensure the charitable choice and all the provisions of the 
faith-based initiatives are instituted in all those programs 
across, the stipulations are removed from the restrictions. As 
I stated earlier, I think the next big issue that we are going 
to be facing is the implementation at the State and local level 
of Federal block grant funds, and working with local and State 
officials like the lady from Alabama who shared this morning, a 
great example of a State that is taking a proactive stance, 
trying to facilitate that. Not all States are doing that, and 
certainly very few municipalities and localities.
    Mr. Turner. Pastor Jones.
    Reverend Jones. Thank you, Chairman. As we stated earlier, 
I think the restrictions or the limitations are with the 
capacity-building and some of the other supportive areas that 
we could benefit from. I also think that communication within 
not only our circle, but from the government's point of view. 
Often, I think that when people hear faith-based initiative or 
faith-based, they think immediately money, they think that 
there are dollars that are going to just be freely given. And I 
think that in the training and in the dialog, it is critical to 
communicate clearly the qualifications and what is expected of 
each organization as we apply and pursue these kinds of deals 
or opportunities.
    Mr. Turner. I have a couple more questions that are not 
necessarily for the whole panel, so I am just going to break 
for a moment and call this the commercial section of the 
testimony. You all have had the opportunity to talk about what 
you have done in the past, and I would like for you for a 
moment, if you will, to just tell me for the record some of the 
things that you have on the board, some of the things that you 
foresee that you want to accomplish, your dream and vision of 
where you are going as we partner together in the faith-based 
initiative.
    Pastor Jones, you are smiling the biggest, so I will let 
you start.
    Reverend Jones. Well, I smiled first, chairman, because I 
am a preacher and we have limited time. But we are encouraged 
by our community work and our partnerships within our 
community. We mentioned earlier our second 202 project which 
has been funded will have over 100 units within this community; 
and we are looking to build market rate homes. We are acquiring 
apartments to provide housing for individuals in our community; 
youth worship center, youth recreational centers; strip mall, 
which would also demand commercial development as well within 
our organization, we are looking to do that; an additional 
school that we are hoping to do as well.
    So we have a variety, a myriad of things that we are 
looking forward to doing. And the support that we receive, we 
must admit and I must admit, enables us to really pool our 
resources in a different way in order that we can maximize our 
resources. So we have a lot we are doing, and this has just 
provided those kind of opportunities for us.
    Mr. Howard. World Vision is working presently in about 
eight metropolitan areas in the inner city. Our focus is mostly 
on at-risk youth and on substandard housing. We would like to 
expand that to more cities. We would like to be able to expand 
our ability to help develop capacity for other organizations. 
When you say what would you like to do in the future, what we 
really need is have one of our program folks here who can talk 
to when you see a kid who has been in and out of the juvenile 
justice system, and you see the change that you can make by 
getting them out of that system and giving them positive role 
models, and putting them together with people in his community 
or her community that make a difference, and you have the 
opportunity to expand that across a broader area, you would 
grab every chance you could.
    So those are the three principal areas we work in, is 
trying to build capacity, working with at-risk youth, and then 
making contributions of both gifts-in-kind from the 
corporations, but also from the U.S. Government, available on 
as broad a basis as possible.
    Sister Wilenhaus. St. Mary Development is, of course, 
working hard on that 202 project that we want to do. 
Specifically, we would like to do the housing on the Veterans 
Administration grounds, and we would hope that many of our 
future residents would be veterans ourselves. We have partnered 
and done tax credits, single-family homes, and now our part of 
the work begins, and that is the education of the families who 
will be moving in. St. Mary's says a lot of people can put a 
roof over someone's house. We say we want to keep the people in 
that house. And we intend to do that through education, and we 
will also do that through hand-holding, which takes a lot of 
staff and a lot of special time.
    We would like to work with Trotwood, OH and their grandiose 
plan of changing the Salem Dayton Mall into a new face and a 
new use, and that will be a new venture for us. We are going to 
open early childhood classes in the fall, and this will be 
working with children 3, 4, and 5, because, again, we believe 
that the sooner you can educate someone, the better chance they 
have. So we want to work not only with the children, but with 
their parents.
    Dayton is also experiencing a strong influx of Hispanic 
families, so since I know nothing in Spanish, you know there is 
something I have to learn and our staff will have to learn, 
because we believe that we are there to help them become 
acclimated to Dayton and make Dayton a better place.
    Mr. Knox. I think a couple of things that We Care America 
will be focusing on is one I touched on earlier, is as this 
whole process evolves and money is being accessed and faith-
based organizations are growing and it is becoming more 
commonplace, we are seeing a greater interest in the corporate 
community, so what we are trying to do is create a new thrust 
within the organization to meet with the corporate community 
organizations and large Fortune 500 companies who have never 
given to faith-based organizations.
    And with the credibility of also working and receiving 
funds from the Federal Government, coming to them and saying 
why don't we leverage this money together in your community, 
and we are getting great feedback on that. So what we are 
seeing is kind of a coalition of the government, faith-based 
organizations, and the corporate community.
    Second is centers in major cities, and actually the CCF, 
which is the Capitol Fund, is also starting the process of 
starting centers in individual cities where we can bring 
together the best practices. We Care America doesn't actually 
perform the work on the ground, it empowers and helps other 
organizations to do it. And if there were centers where local 
smaller, non-profit, faith-based organizations come to and 
receive information on the best practices, what is working for 
after-school programs, mentoring programs, drug rehab programs, 
to bring it into practice in your own organization, and maybe 
receiving money from the Federal Government and from 
corporations, but to have a local entity that can do that.
    And I think the third thing is to help these 
organizations--I had mentioned earlier in my testimony, just a 
local organization I am not affiliated with in southeastern 
Virginia, received $38,000, but what it did was, as part of 
that grant process, it professionalized their organization; it 
made them hire a real board, it got their budgets together, 
they hired key personnel. And they grew from $100,000 to 
$300,000, $350,000 just by making those changes, without 
receiving further money. But now they have the capacity for 
more. So I think accessing whatever can be done for those 
organizations to help them grow.
    And the last thing is when you go to these training 
programs, people are seeing a new faith in their government, I 
think, because they are there and the government is paying them 
to train how to professionalize their organization, but not 
only that, training them on how to access funds, their tax 
dollars. And that is an empowering thought. And I think by 
changing this from an Executive order and creating legislation, 
hopefully that will continue the faith in that process and 
people will feel like they should continue to invest in 
learning how to do it, because it is not going to go away.
    Mr. Turner. Mr. Howard, next I have a question that is 
exclusively for you, and before I ask it I want to make a note 
for the record that the entire membership of panel two are 
individuals who are individuals of faith, representing faith-
based organizations, and Mr. Howard being general counsel, as 
an attorney, is certainly an example that the legal profession 
and people of faith are not mutually exclusive.
    Mr. Howard. Thank you, Mr. Chairman.
    Mr. Turner. And being a lawyer, that is an important 
distinction for me to make. But the question that I want to 
return to from the first panel is that there is a concern, 
obviously, about the issue of faith-based organizations 
advancing faith versus advancing social services, and there is 
a tremendous effort, both through the regulations and through 
the actual practice, to ensure that what the Federal Government 
is funding is social service provision and not religious 
provision. On the converse side, there is also a significant 
amount of concern from faith-based organizations that by 
entering this realm, they may be subjecting themselves to 
regulation or rules and laws that diminish their ability to 
operate as religious or faith-based organizations.
    My staff gave me a copy of a case, Catholic Charities of 
Sacramento v. Department of Managed Health Care in California, 
where the Catholic Charities sought relief from a law that they 
believed would cause them to have to operate in a way that 
violated their religious principles or philosophy. And the 
court applied from that law a four-part test to determine 
whether or not they should be excluded from it as a religious 
group or not, and the four-part test was: was the corporate 
purpose the direct inculcation of religious values; does it 
primarily employ persons of its religious beliefs; does it 
serve people of all faiths and backgrounds; and is it a 
501(c)(3), all of which are tests many times that you are 
required to be able to pass in order to receiving funding.
    So you are both setting up a test and requiring people to 
satisfy it to access funding, and then using the same test to 
determine that you are no longer a religious organization; 
therefore, we can fully and completely regulate you without any 
restriction that might impact your religious beliefs or faith's 
operation. Would you want to comment on that?
    Mr. Howard. Well, I would be curious to know if that is 
California State court or if that is a Federal court. That does 
make a little bit different----
    Mr. Turner. It is California.
    Mr. Howard. It is California courts?
    Mr. Turner. Yes. California Supreme Court, I believe. Yes, 
Supreme Court of California.
    Mr. Howard. Supreme Court of California. I have not read 
that case, but based on the four tests that you have set out, 
World Vision wouldn't have any difficulty meeting those four 
tests. We do work with churches, we do work with pastors in our 
programming, and we do what we do because of our faith, and 
that is our motivation. You can't separate that out. The reason 
we do something, you can't separate it out from the actual 
provision of the service.
    We would never say in order to receive this benefit, this 
support that is federally funded, that you have to sit through 
a sermon or participate in a Bible study or convert to a 
different religion. That is not what we do. We don't 
proselytize. When we do work with churches and local pastors--
for instance, when we want to raise the capacity of local 
pastors to minister to their community, so we might put 
together a pastor's resource center--we make sure that is 
funded with private funds, separate in time and location from 
the work that we do that is federally funded. We have been 
doing that for 30 years on the international side. When we work 
with local missionaries and local pastors to help build their 
capacities in the country, we make sure that is funded 
separately from any funds that we receive from the U.S. Agency 
for International Development.
    We do give the benefit of what we do to everybody who 
comes. In fact, the majority of our beneficiaries around the 
world are not Christians, they are mostly Muslims and Buddhists 
and Agamous. So we don't make that kind of discrimination, so 
we wouldn't have any difficulty with that.
    Mr. Turner. Mr. Howard, I want you to comment, though, on 
is the reverse of your concerns of once you're complying with 
the----
    Mr. Howard. Once we receive the funds?
    Mr. Turner. Yes. You are complying by not crossing the line 
to providing religious services versus social services.
    Mr. Howard. Right.
    Mr. Turner. But now you may have opened yourself to 
regulation and the impact of laws that might go to the issue of 
impacting your religious beliefs or your operations violate 
those tenets. Do you, as I have heard from others, as faith-
based organizations, have a concern that process might result 
in a back door, if you will, of regulating practices of faith?
    Mr. Howard. Well, that risk always exists. You know, the 
old song is the ability to tax is the ability to destroy, and 
the ability to withdraw funds or to compel funds or to compel 
complaints with that is always a risk for anyone who receives 
Federal funding. We look for each program that we are going to 
propose for our grant very carefully, and if we were concerned 
that we thought there might be a creeping imposition on us, we 
would choose not to. Our Board of Directors, which comes from 
all works of life from all over the United States, has made it 
very clear that if at any point in time Federal funding would 
restrict our ability to maintain our religious activities, we 
would stop taking Federal funds, plain and simple.
    Mr. Turner. At this point I would like to open it for any 
closing comments that you might have as a result of having 
heard others or other thoughts that you might want to include 
in the record before we conclude.
    Mr. Knox. Sister Rose.
    Sister Wilenhaus. I would certainly like to partner with 
everybody at the table. I am in Dayton, OH. Be sure you look at 
that.
    Mr. Turner. I was going to suggest that everyone exchange 
cards before this is over.
    Mr. Howard. One other thought. One of the programs--the 
Empowerment Zone--is one other issue where there are 
restrictions on religious staffing issues that you might have 
your staff look into. One of the issues facing the inner city, 
of course, is incredible poverty, and what we can do, what we 
can't to help facilitate the growth of local and small business 
through Empowerment Zone funding. We would love to participate 
in that, but have been precluded from doing so so far.
    Mr. Turner. Anyone else? If not, I want to thank you all 
for participating. I appreciate the time that you have spent in 
preparing. It is certainly important to recognize the 
compassionate work and praiseworthy results achieved by faith-
based organizations. Regardless of religious affiliation, these 
organizations strengthen American families and neighborhoods. I 
am pleased to hear of the efforts underway at HUD to assist 
these groups, and I hope that Congress will continue to support 
the President's initiative in community development efforts 
carried out by faith-based organizations.
    In the event there are any additional questions that we did 
not have time for today, the record shall remain open for 2 
weeks for the submission of questions and answers. Thank you 
all.
    We will be adjourned.
    [Whereupon, at 12:35 p.m., the subcommittee was adjourned.]

                                 
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