Out of 51 U.S. jurisdictions, Washington ranks #50 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. Washington has some policies that facilitate the contributions of faith-based nonprofits, including specific provisions in the nonprofit corporation laws to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs. Washington, however, has several laws that are burdensome to faith-based nonprofits operating in the state, such as severely limited religious freedom for employers, very limited exemptions from state sales taxes on religious organizations’ sales and purchases, and a broad Blaine Amendment.
The Washington Constitution has been interpreted by the Washington Supreme Court to provide stronger protections for religious free exercise or worship than the federal First Amendment (as currently interpreted by the US Supreme Court).
Washington’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide accommodations or exemptions but only for a narrow spectrum of religious organizations, such as educational facilities operated by a religious institution.
Washington’s nondiscrimination laws related to employment include no meaningful accommodations or exemptions to protect the autonomy of religious employers, because the Washington Supreme Court has severely limited the statutory exclusion of religious organizations.
The Washington 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.
Washington 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 Washington constitution.
Washington law permits a director, in the fulfillment of the director’s fiduciary duties, to rely only on the opinions of individuals retained by the corporation and does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition.
Washington 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.
As a condition of maintaining authorization to fundraise in the state, Washington requires the submission of reviewed or audited financials for organizations with annual gross revenue greater than $3 million.
Washington 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.
