Non-profit organizations that take federal or state funds usually must abide with governmental rules for use of the money, and sometimes other rules as well. Church schools are the most prone to government intrusion if their funding is in part or in whole from government sources. However, there are limits to the power of government money to compel submission by churches and denominations.
In Rutland v Nelson, Slip Op., Per Curiam (11th Cir. 2021), the federal appellate court affirmed dismissal of a case by a federal Florida trial court. The Plaintiff was by church and denominational disciplinary proceedings banned from all church property and from speaking to the denomination’s clergy. The federal trial court held that the Ecclesiastical Abstention Doctrine of the First Amendment barred judicial intrusion into church disciplinary proceedings and dismissed the case. On appeal, the Plaintiff argued that because the denomination accepted federal funds, it was subject to judicial review of his complaints discrimination based on “disability, veteran status, and religion.” The United States Court of Appeals for the 11th Circuit rejected that as a basis for shrinking or terminating First Amendment protection or expanding judicial authority.
At least for now, taking government money is not automatically a key to the church doors.