Does Opportunity Knock?

Tom Flynn

A few issues back, I proposed a possible longer-term goal for the secular humanist/atheist/freethought movement (“A Modest Proposal: Get Religion Out of the Charity Business,” FI, December 2017/January 2018). I admitted that seeking to end religion’s role in providing social services was a long shot, perhaps “unattainable.” In this op-ed, I’d like to propose a more practical medium-term objective that might truly be achievable on a timeframe of a decade or two. Or rather, it might be attainable if well-meaning activists in a closely adjacent movement don’t sabotage it first.

I’m talking about putting an end to one of the unfair privileges enjoyed by America’s religions. No (sigh), not the nested federal, state, and local tax exemptions enjoyed by churches and other ecclesiastical institutions—notwithstanding the fact that the last time anyone tried to tally it up, those exemptions cost all levels of government about $71 billion per year. (And that was six years ago.)1 Hopes to out-and-out “tax the churches” are probably futile. But I think it might be practical to target a single aspect of tax favoritism toward religions. If I’m reading the zeitgeistcorrectly, we might hope to end just one special privilege that religious institutions enjoy but is denied to nonprofit organizations of other types.

The good news is that it’s one of the more important ones.

My Proposal and Some Background

I have in mind the privilege enjoyed by religious nonprofits, and them only, not to report their financial activities. Bear with me while I wax slightly technical.

Nonprofit organizations (in the sense that, among other things, gifts to them are clearly tax-deductible) are corporations recognized as not-for-profit by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code. Nonprofits come in several types, such as:

  • Fraternal (think the Rotary Club);
  • Scientific (think the AAAS);
  • Educational (think, hmm, let me think—oh yeah, the Center for Inquiry [CFI]!); and
  • Religious.

There are others, but this captures the gist. All 501(c)(3) nonprofits are exempt from federal income tax. Gifts to them are federally tax-deductible for donors who itemize. Depending on state laws, they may also be exempt from state income taxes, state or local sales taxes, and/or property taxes.

One thing that most of these nonprofits are not exempt from is filing the equivalent of federal taxes. Though they do not pay the taxes, they must nonetheless file an annual IRS report, called a Form 990, which requires the same bookkeeping mechanisms and about the same accounting burdens involved in completing a corporate tax return. In this way, standardized annual financial reports for most IRS-recognized nonprofits become part of the public record. We the people get a chance to see what use most of the institutions we’ve spared from taxation are doing with this very significant benefit.

Most. But not all.

Among nonprofits whose receipts exceed $5,000 per year—which is to say, most of the important ones—religious organizations alone are exempt from this requirement. They alone needn’t file Form 990. This has two consequences:

  • Consequence Number 1 (moderately important): Each religious nonprofit is spared the costs associated with doing solid internal accounting and completing the fairly complex Form 990. The cost savings can be significant, especially for smaller organizations.
  • Consequence Number 2 (immensely important): No religious nonprofit has to report its financial activities to … well, anyone, actually.

Let that second consequence sink in. Want to know how much the five highest-paid employees of the ACLU earned in year x? Want to know what fraction of its contribution income Habitat for Humanity spends on administration and fundraising? Want to know how much the Center for Inquiry made from magazine subscriptions in year y? It’s public record. You can look up any U.S. nonprofit’s Form 990 online. (Fair warning, the most recent one available may be a couple of years old.) Those with a need to know can access 990s from the previous tax year without too much difficulty.

Unless, of course, you’re curious about a religious nonprofit. In that case, try not to leave a mark when you hit the stone wall.

Religious nonprofits have no obligation to share their financial records—or even to keep such records. Make no mistake, many religious organizations do maintain robust accounting controls. They do so voluntarily to detect fraud and waste, to permit informed executive control of their operations, to satisfy the demands of their donors or lenders, and so on. But unlike other nonprofits, they don’t have to. And they can keep whatever information they do develop as private as they please. Finally, they needn’t compile and submit their data in a standardized form.

The upshot: Religious organizations can save, if they choose to, by forgoing internal accounting that other nonprofits must carry out. And some of them can save big (or unjustly enrich select insiders) by doing only limited or secretive bookkeeping that makes malfeasance difficult to spot. Why? Solely because they’re religious.

Why? And Why Not for Much Longer?

How did this extra layer of privilege for religious nonprofits originate? It grew out of legitimate concerns that smaller churches might find Form 990’s accounting and filing burdens overwhelming. Additionally, it reflected perhaps-overblown concerns that for the government to compel religious groups to disclose financial information might breach the wall of separation between church and state and might penalize “unpopular” religious groups.

Why do I think the zeitgeist may at last come to favor eliminating this unfair advantage? First, I see a growing public appetite for accountability and fairness. From Black Lives Matter and #MeToo to growing disgust with shady dealings among public officials, the body politic seems ripe for a requirement that all organizations benefiting from the public subsidy of tax exemption—even religious ones—should face identical public-disclosure requirements. Second, ever-growing numbers of Americans tell pollsters that they identify with no religious denomination or do not consider themselves religious. That makes me hopeful that public resistance to proposals to reduce religious institutions’ privilege is diminishing and may continue to do so. (Of course, if greater transparency is demanded of all religious nonprofits, that goes some way to settle concerns that marginal or reviled religious organizations might be singled out.)

Put those two trends together, and it seems reasonable that American opinion might soon welcome revocation of that historic privilege of religious organizations that advantages them unfairly vis-à-vis other nonprofits and degrades their accountability.

Such a move would have other consequences. Law and regulation are sprinkled with special privileges for religion. To name just two, many states empower clergy members to perform binding marriages while denying that power to others. It’s also common for state penal systems to empower religious organizations to establish inmate groups in ways other organizations cannot.

Removing religion’s immunity to nonprofit reporting requirements wouldn’t automatically overturn these unfair preferences, but it might add weight to calls for their reversal.

About That Sabotage …

But it’s not a sure thing. Above, I warned that all this might come to naught “if well-meaning activists in a closely adjacent movement sabotage it first.” I refer to some humanist (though not secular humanist) activists and organizations eager to blur the distinction between secular humanism and religion. Generally, this is done well-meaningly. Some seek to claim for humanist celebrants the same power to solemnize marriages as clergy members—instead of challenging that power and seeking to establish a truly secular equivalent. Others wish to wrap humanist prison initiatives in the mantle of religion (falsely, but never mind) to take advantage of rules that promote the creation of religious groups for inmates. Some even seek to promote so broadening the definition of the word religion as to negate the traditional requirement that religious worldviews must incorporate a supernatural component, with the result that anything from unyphenated humanism to, oh hell, Justin Bieber fandom might be properly described as religious.

The danger these efforts pose should be clear. Instead of challenging an odious religious privilege, they seek a loophole through which to step up to the trough and illicitly gorge alongside the churches. This undermines the moral standing of humanists and other nonreligious people who properly stand outside this zone of illicit privilege and call for its elimination. (It’s worth noting that in CFI’s recent successful legal actions in Illinois and Indiana, which won recognition for the right of CFI-certified Secular Celebrants to perform binding marriage ceremonies in those states, it was always made clear that this power was not being sought by seeking an expansion of clergy privileges. It’s further worth noting that CFI has argued that nonbelievers are protected by the First Amendment’s free exercise of religion clause, as well as by protections against religious discrimination in federal and state law. Nonbelievers qualify for these constitutional and civil rights because rejection of religion is a minority position on religion. In these cases, it is the religious motivation of those who seek to exclude others, not whether those others are or are not themselves religious, that matters most.)

Here’s one example. In the past few years, our friends at the American Humanist Association (AHA) have built legal momentum seeking to establish prison humanist groups on the same basis as religious groups. Recently a federal judge ruled that North Carolina’s prison system had erred in declining to recognize humanism as a religion and in barring an inmate from starting a humanist study group.2 This follows on a 2014 case, American Humanist Association v. United States, which led to a truly absurd result: in a case brought by an unhyphenated-humanist organization in aid of a religious-Humanist inmate plaintiff, the court wound up ruling gratuitously that secular humanism is a religion for Establishment Clause purposes—when secular humanism wasn’t even under discussion! This was sufficiently egregious that then-CFI CEO Ronald A. Lindsay, CFI Legal Director Nick Little, and I issued a joint statement of protest.3

It’s worth noting that AHA has a spotty record on the religious exemption. Originally founded in 1941 as an educational organization, AHA adopted a religious exemption in the 1960s so that its quasi-clergy, then known as Humanist Counselors, could perform binding marriages in all fifty states.4 Faced with rising criticism that its religious status was hypocritical, the AHA board voted in 1989 to absorb the Humanist Society of Friends (HSOF), a Quaker religious humanist organization, so that it could provide continuing clergy status for the Counselors. AHA then announced in its member newsletter that AHA itself would relinquish its religious status and revert to being educational.5 It never happened. “The decision not to proceed was based in pure pragmatism,” admitted then-AHA Executive Director Tony Hileman in a 2002 interview.6

Only with the rise of online reference sources such as GuideStar in the 1990s did it become clear that AHA had never relinquished its religious exemption. (I even know one mid-1990s AHA board member who thought the change had gone through!) Criticism, some of it from Free Inquiry, rose again. Vague promises to jettison the religious exemption were repeated in the early 2000s, again without apparent result. In spring 2006, the AHA board resolved once and for all to drop the religious exemption and seek to re-establish its educational status. Months later the IRS agreed, declaring the AHA educationally exempt in early 2007 making the status change retroactive to January 1, 2003.7 (Apparently the abortive early-2000s effort to seek the status change had had some result.)

To AHA’s credit, it duly filed Form 990s going clear back to 2003 through 2006, which must have been a daunting process given that the organization was operating under religious-organization rules during those years.8

Another area of concern should be familiar to Free Inquiry readers: the informal campaign to press for a strongly broadened definition of religion that does not demand supernatural beliefs. Unhyphenated-humanist activists Jeff T. Haley and Dale McGowan have advocated exactly this in a recent article (“Nudge Religions Toward Reality,” FI, February/March 2018) and in a new book, Sharing Reality: How to Bring Secularism and Science to an Evolving Religious World (Pitchstone Publishing, 2017), which received a penetrating review by Ronald A. Lindsay in our April/May 2018 issue. (Controversy over the review extends to a point-counterpoint in this issue.)

I’ll be blunt: efforts such as Haley’s and McGowan’s may be favorable to religious Humanism or to unhyphenated humanism (to the degree that the meaning of a term so broad as humanismwithout a modifier can even be nailed down). But if successful, the consequences for secular humanism would be dire. Remember, secular humanism doesn’t just understand itself as a nonreligious worldview; it takes pride in not being religious. It views itself as an alternative to allreligions (that is, lifestances that rely on supernatural components) at the same time that it encodes a rejection of religion as a category. Efforts to diffuse religion’s meaning are erosive, from the secular humanist perspective; efforts that result in absurdities such as court decisions declaring secular humanism a religion are simply perverse.

At stake, among many other things, is whether the secular humanist movement will retain the moral standing to press credibly for goals such as overturning religious nonprofits’ unfair freedom from the reporting requirements all other U.S. nonprofits face.

If our compatriots from the “next movement over” can be prevented from unduly complicating matters, this is a medium-term reform to which I think we can legitimately look forward.



  1. Ryan Cragun, Stephanie Yeager, and Desmond Vega, “How Secular Humanists (and Everyone Else) Subsidize Religion in the United States,” FI, June/July 2012. Despite some objections to its methodology, statistics from this article became widely quoted; that $71 billion figure continues to recur online and in mainstream media.
  2. American Humanist Association and Kwame Jamal Teague v. Frank L. Perry, et. al.
  3. Tom Flynn, Ronald A. Lindsay, and Nicholas J. Little, “Secular Humanism: Not a Religion,” FI, February/March 2015.
  4. It is unclear how this was done; IRS rules provide no simple mechanism for switching an exempt organization’s status from educational to religious, nor did they in the 1960s.
  5. Edd Doerr, “Chairperson of the AHA Board Responds,” Free Mind, March-April 1990, p. 11.
  6. Telephone interview with Tom Flynn, originally published in Flynn, “A Secular Humanist Definition: Setting the Record Straight,” Free Inquiry, Fall 2002.
  7. Roy Speckhardt, “The Humanist Tax Exemption,” Humanist Network News, February 7, 2007. Speckhardt described the process as “very unusual (perhaps one of a kind),” underscoring how little precedent there is for a nonprofit switching from one class of exemption to another. Oddly, this article is no longer available on AHA’s site; I found it archived at
  8. AHA’s Form 990s beginning with 2003 can be downloaded at

Tom Flynn

Tom Flynn is editor of Free Inquiry, executive director of the Council for Secular Humanism, director of the Robert Green Ingersoll Birthplace Museum, and editor of The New Encyclopedia of Unbelief (2007).