Out of 51 U.S. jurisdictions, Illinois ranks #25 overall for its friendliness towards faith-based nonprofit organizations. Illinois 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. Illinois, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a sales tax with no meaningful exemptions for religious organizations’ sales and an audit requirement to maintain charitable solicitation registration.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The Illinois Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment.
State Religious Freedom Restoration Act:
3
/5
Illinois has enacted a RFRA that protects the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. Since these protections originate in a statute rather than the state constitution, Illinois does not receive the highest score for this factor.
Religious Freedom for Nonprofits with Public Programming:
-3
/5
Illinois’ nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide accommodations or exemptions but only for only a narrow spectrum of religious organizations, such as organizations classified as churches.
Religious Freedom for Faith-Based Employers:
3
/5
Illinois’ nondiscrimination laws related to employment are broad but provide strong accommodations or exemptions to generally protect the autonomy of the vast majority of religious organizations.
Protections for Religious Exercise in State of Emergency:
-3
/5
Illinois law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
-3
/5
The Illinois 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, but it could become effective in the future if Court precedent changes.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
0
/5
Illinois’ nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation.
Standards of Conduct for Directors of Religious Organizations:
-3
/5
Illinois law is silent as to whether a director, in the fulfillment of the director’s fiduciary duties, may rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, and the law does not expressly permit a director to rely on guidance from religious figures within his or her faith tradition.
Charitable Registration Law:
3
/5
Illinois generally requires charitable solicitation registration but, upon application, generally provides religious organizations with a registration exemption.
Audit Requirements Pursuant to Charitable Registration:
-5
/5
As a condition of maintaining authorization to fundraise in the state, Illinois requires the submission of reviewed or audited financials even for organizations with annual contributions less than $500,000.
Corporate Income Tax:
5
/5
Illinois imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
-5
/5
Illinois imposes a sales and use tax on religious organizations’ sales and provides no meaningful exemption.
Sales and Use Tax, Purchases:
3
/5
Illinois imposes a sales and use tax but a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases is generally available upon application.
Property Tax:
3
/5
Illinois imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
