Out of 51 U.S. jurisdictions, Delaware ranks #42 overall for its friendliness towards faith-based nonprofit organizations, making it one of the worst places to operate a faith-based nonprofit in the United States. Delaware has some policies that facilitate the contributions of faith-based nonprofits, including an automatic exemption from state corporate income tax for religious organizations that have 501(c)(3) status. Delaware, however, has several laws that are burdensome to faith-based nonprofits operating in the state, such as a Blaine Amendment, nondiscrimination laws regarding public accommodations that include no meaningful exemptions for religious organizations, and a lack of a RFRA.
The Delaware 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).
Delaware’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
Delaware’s nondiscrimination laws related to employment provide exemptions that protect the religious liberty of religious organizations in some but not all employment situations.
The Delaware Constitution contains a Blaine Amendment that could prevent the participation of faith-based schools in generally available public benefit programs on the same terms as similarly situated secular schools. This is not as broad as a general Blaine Amendment, which prohibits all aid to faith-based institutions, but is still detrimental to the work of faith-based 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.
Delaware corporation law does not have any law deferring to religious beliefs and structures in governance matters and does not have any special provisions specific to the internal governance or operations of religious organizations.
Delaware law permits a director, in the fulfillment of the director’s fiduciary duties, 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.
Delaware imposes property tax and provides only fragmented property tax exemptions that include only a narrow subset of religious organizations or that apply only to a narrow category of religious and/or charitable property uses, such as property used for religious worship.
