The Safeguarding Charity Act: What It Means for Your Ministry

Does tax exemption for churches and ministries constitute federal financial assistance?

No — and it shouldn’t.

But in recent years ministries have found themselves in court over this exact question. In fact, a district court ruled in one case that tax exemption does count as federal financial assistance. Thankfully, a higher court reversed that decision. But the fact that this question even had to be litigated is troubling — and that’s why the Safeguarding Charity Act, recently reintroduced in Congress, is so important.  

This bill brings clarity consistent with common sense. If passed, it unequivocally establishes that “‘Federal financial assistance,’ or any other term referring to assistance provided by the Federal government, shall not include any exemption from Federal income tax” for organizations exempt under certain provisions in the Internal Revenue Code, including 501(c) and 501(d).  

Why does this matter for ministries?

When ministries receive actual federal grants or funding, they involve strings attached – responsibilities that can be complex, burdensome, and expensive to comply with, particularly for smaller ministries and Christian schools. Choosing whether to accept that kind of funding is a significant decision that ministries must prayerfully and carefully make.

But tax exemption is not a handout. It’s not a grant or a favor from the government. It’s a recognition that ministries operate differently from other organizations — and that they serve the public good in unique, often irreplaceable ways. Blurring that understanding leads to problems. It invites confusion now, and could lead to other, perhaps more troubling challenges, in the future.

The Safeguarding Charity Act does just as the name suggests: it safeguards a more appropriate understanding of tax exemption from present and future misappropriation and misconstruction. By doing so, it helps preserve the ability of churches and ministries to remain focused on their mission — free to serve, lead, and live out their faith without unnecessary legal confusion or government overreach.