Out of 51 U.S. jurisdictions, North Dakota ranks #38 overall for its friendliness towards faith-based nonprofit organizations. North Dakota 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 and no audit requirement to solicit donations in the state. North Dakota, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a Blaine Amendment and laws regarding public accommodations that include no meaningful exemptions for religious organizations.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The North Dakota 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
North Dakota 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, North Dakota does not receive the highest score for this factor.
Religious Freedom for Nonprofits with Public Programming:
-5
/5
North Dakota’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
Religious Freedom for Faith-Based Employers:
-3
/5
North Dakota’s nondiscrimination laws related to employment have only narrow exemptions.
Protections for Religious Exercise in State of Emergency:
3
/5
North Dakota law provides that religious worship can only be prohibited or restricted by an emergency order that: (a) applies equally to all “essential” secular entities in the jurisdiction, (b) serves a compelling governmental interest, and (c) is narrowly tailored.
Blaine Amendment:
-3
/5
The North Dakota 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:
-3
/5
North Dakota’s nonprofit corporation law lacks: (a) specific provisions permitting the formation of nonprofit religious corporations; (b) specific protections for religious exercise at faith-based organizations, and (c) express acknowledgement of an option for nonprofits to incorporate for religious purposes.
Standards of Conduct for Directors of Religious Organizations:
3
/5
North Dakota 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.
Charitable Registration Law:
0
/5
North Dakota generally requires charitable solicitation registration and only exempts entities that are not required to file Form 990, such as organizations classified as churches, religious orders, etc.
Audit Requirements Pursuant to Charitable Registration:
5
/5
North Dakota does not require the submission of reviewed or audited financials as a condition of maintaining authorization to fundraise in the state.
Corporate Income Tax:
5
/5
North Dakota imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
3
/5
North Dakota imposes a sales and use tax on religious organizations’ sales but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ sales upon application, provided the sales are related to a nonprofit’s charitable, religious, or educational activities, all revenue from the sales is used for the nonprofit’s exempt purposes, and the sales are not in competition with retailers.
Sales and Use Tax, Purchases:
-3
/5
North Dakota imposes a sales and use tax on religious organizations’ purchases and only provides limited exemptions for certain items.
Property Tax:
3
/5
North Dakota imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
