Out of 51 U.S. jurisdictions, South Carolina ranks #23 overall for its friendliness towards faith-based nonprofit organizations. South Carolina has several laws 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 beneficial nonprofit religious corporation laws. Additionally, South Carolina has no audit requirements for religious organizations to solicit donations in the state. South Carolina, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a Blaine Amendment and nondiscrimination laws regarding public accommodations that include no meaningful religious exemptions.
The South Carolina 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).
South Carolina 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 the RFRA is a statute rather than a state constitutional provision, South Carolina does not receive the highest score for this factor.
South Carolina’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
South Carolina law provides that the conduct of religious organizations 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.
The South Carolina 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.
South Carolina nonprofit corporation law includes certain provisions to protect religious nonprofits’ right to self-government in internal affairs in some situations, including a provision that defers to ecclesiastical law or religious doctrine in the event that the religious law or doctrine conflicts with the nonprofit corporation law to the extent required by the Constitution of the United States or the South Carolina constitution.
South Carolina law permits a director to rely on guidance from religious figures within his or her faith tradition in the fulfillment of the director’s fiduciary duties.
South Carolina charitable solicitation law contains exemptions only for entities that are not required to file Form 990, such as organizations classified as churches, religious orders, etc.
South Carolina does not require the submission of reviewed or audited financials as a condition of maintaining authorization to fundraise in the state.
South Carolina 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.
