Out of 51 U.S. jurisdictions, California ranks #30 overall for its friendliness towards faith-based nonprofit organizations. California has several laws that facilitate the contributions of faith-based nonprofits, including strong protections for directors to rely on guidance from religious figures, as well as the most comprehensive and protective nonprofit religious corporation laws in the nation. California, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a broad Blaine Amendment, a lack of a RFRA, and nondiscrimination laws regarding public accommodations that include no meaningful exemptions for religious organizations.
The California Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment (as currently interpreted by the US Supreme Court).
California’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
California’s nondiscrimination laws related to employment protect religious freedom by excluding religious organizations from the definition of “employer.”
The California Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current U.S. Supreme Court precedent has rendered this language ineffective in many cases, but it could become effective in the future if Court precedent changes.
California nonprofit corporation law includes a designated law governing the formation and operations of nonprofit religious corporations and provisions to protect their right to self-government in internal affairs.
California law permits a director of a nonprofit religious corporation to rely on guidance from religious figures within his or her faith tradition in the fulfillment of the director’s fiduciary duties. For religious organizations that are not incorporated as nonprofit religious corporations, California law allows directors to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition.
California generally requires charitable solicitation registration, but California domestic nonprofit religious corporations receive an automatic exemption. Out-of-state religious organizations may apply for an exemption, which is granted at the attorney general’s discretion.
As a condition of maintaining authorization to fundraise in the state, California requires the submission of reviewed or audited financials for organizations with annual revenue of $2 million or more. California nonprofit religious corporations are exempt from charitable solicitation registration and audit requirements.
California imposes a corporate income tax but offers an exemption to organizations organized and operated exclusively for exempt purposes only upon application.
California imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
