Category: Parachurch Organizations


Historically, it was not uncommon for church sponsored or operated orphanages and children’s homes to fill the gap between state facilities and the need.  It was also not uncommon for these parachurch organizations to accept state funding for state wards when the state had no available facilities in the locale.

In Doe v Archdiocese of St. Louis and Anderson, Memorandum and Order (ED Mo. 2022), the federal trial court dismissed the federal law claims with prejudice and dismissed the state law claims without prejudice.  (This is a standard federal trial court practice to allow state law claims to be pursued in state trial courts if the Plaintiff so desires, but it ends the federal law claims unless continued in an appeal.)  The Plaintiff alleged that he was sexually abused forty years ago at a children’s home operated by the Defendants in violation of a federal constitutional right.  Such a claim is brought to federal court under federal statutory authority:  42 USC §1983.  The Plaintiff after extensive discovery was never able to prove the Defendants as operators of the children’s home were “state actors” rather than private actors.  The Plaintiff argued that the children’s home accepted state reimbursement for holding wards for which the state had no other placement available in the locale.  According to the Plaintiff, taking the money converted the parachurch organization to a “state actor.”  The federal court held merely accepting funds from any level of government does not convert the private entity to a “state actor.”  The court cited Rendell-Baker v Kohn, 457 U. 830 (1982) in which the private school derived nearly all of its funding from state funds but was still held not to be a “state actor.”

In the reported case, there was no written contract between the parachurch organization and the state.  The payment of the funds indicated there was at least some form of oral contract.  A formal contract may have contained terms that altered the role of the parachurch organization.  The federal civil rights claims possible through §1983 might have been tempting to the plaintiff as an effort to escape Missouri’s two year statute of limitations or even the more specific ten year statute that applied to sexual abuse.


The First Amendment’s protection of church autonomy from government regulation is in federal courts implemented by balancing the need of society to regulate conduct against the need of the ecclesiastical need for independent church governance.  To that end, federal civil rights legislation usually contains an exception for religious entities and their employees.  Likewise, the First Amendment, and state constitution counterparts, limit exercise of governing power to secular matters.  To reach these legal conclusions, however, sometimes requires a court to require the parties in a lawsuit through discovery and their own investigations to create a factual record.  The cost of litigation resides mostly in the various pre-trial phases of a lawsuit, with discovery costs being the bulk of the costs.

In Tucker v Faith Bible Chapel, Slip Op. (10th Cir. 2022), the federal trial court had before it a high school teacher in a private church school that also served as a chaplain.  The teacher / chaplain developed a chapel service that the teacher called “a symposium” “on race and faith.”  Parental and student backlash may have led to the termination of Plaintiff from the duties of chaplain and a few weeks later termination from the teaching position.  The Plaintiff alleged the termination was based on discrimination illegal under federal and state law.  The Defendant moved to dismiss invoking the Ministerial Exception to the federal civil rights law.  The federal trial court ordered discovery conducted by the parties solely on the issue of whether Plaintiff’s claim was barred by the Ministerial Exception because Plaintiff held the title of “chaplain” and because he was a high school teacher in a private religious high school.  Upon the conclusion of discovery, the federal trial court overruled the Defendant’s motion for summary judgment based on the Ministerial Exception and held there was a question of fact for a jury to decide.  The United States Court of Appeals for the 10th Circuit, presented with an interlocutory appeal of the order overruling the motion for summary judgment, dismissed the appeal holding it did not have jurisdiction to hear an interlocutory appeal at this time in the case.

By treating the Ministerial Exception to the federal civil rights laws as an “affirmative defense,” a defense that must be factually proven and raised at trial, the cost of litigation must be endured in order to reach a ruling.  The 10th Circuit did not reach the issue of whether the proof placed in the record was sufficient to support or deny the Ministerial Exception.  The impact of the ruling will be that interlocutory appeals will be problematic if a federal trial court refuses to dismiss a case due to a question of fact about the Ministerial Exception affirmative defense.  The pragmatic impact will be that the cost of litigation through trial would become unavoidable.


As we have reported several times, after maintaining the governing documents themselves, maintaining valid membership lists at least annually is about survival.  The local church that does not do both courts expensive legal repairs or a raid on assets.  Membership rolls should annually be made a part of the minutes of the church governing board.  Membership rolls kept in digital formats should at least annually be hard copy printed, or saved to media separate from the computer on which it is routinely hosted, and either or both attached to the minutes of the governing board.

In Cohen v Berliner, Unpublished Opinion (NY Supp Kings County 2021), the trial court held that the two hundred signatures submitted by the petitioner were not the valid ten signatures needed to demand a congregational meeting or vote.  However, the court conducted evidentiary hearings in which thirteen witnesses were tendered for testimony.  The local church owned a church camp primarily used in the summer.  The local church also leased the church camp to a parachurch organization for a girl’s summer camp.  Other local churches in the same denomination contributed money to the parachurch organization that operated the girl’s summer camp and that entity in turn leased the camp from the local church.  At some point, a falling out resulted and the churches supporting the para-church organization sought control over the summer camp.  The local church refused to surrender control.  The churches supporting the para-church organization submitted a petition for a congregational meeting by the local church supported by two hundred signatures from members of those churches, but none of which were members of the local church that actually owned the camp.  The petitioner sued to obtain a court order for the congregational meeting but the court upon holding extensive evidentiary hearings determined none of the two hundred signatories were members of the local church that owned the camp, but rather were members of the other churches.  The court rejected the claim that membership in the denomination was the same as membership in the local church absent such language in the governing documents.  The lease payments made by the parachurch organization did not constitute financial support of the local church that owned the camp, even if the lease payments were substantial.

Because the local church did not appear to have an official membership roll, each witness tendered had a shot at qualifying.  The court in the case reported may have given the petitioner as many as thirteen tries.  An official membership roll would have reduced the number of tries to one; only signatories also on the official membership roll could have been considered as “qualified” to call a congregational meeting.  A joint denominational asset like a church camp should be placed in a corporate shell controlled by the member congregations or the denomination and not owned by one of the constituent churches of the denomination.  Otherwise, no one but the owner of the denominational asset will have any say over its management, operation, sale or use as collateral.


Churches and parachurch organization often struggle with representations regarding the funding needs of the moment followed by spending which might not exactly match the representations after the crisis has passed.  Also, using funds for “ministry” might mean one thing to a member and something different to the leader of a church or parachurch organization in the best of times much less in a crisis.  The level of disclosure regarding the use of donated funds might lack clarity because the purchase of a box of paper clips, much less salaries and benefits, might be viewed as a cost of “ministry” by some but not others.

In Dux v Bugarin, Slip. Op. (Mich. App. 2021), the trial court dismissed the lawsuit by a group of parishioners disgruntled because the denomination determined that a forty-year-old allegation of sexual misconduct by the church pastor was “credible,” removed the pastor, and published the allegation.  The allegation of sexual misconduct was investigated by law enforcement at the request of the church.  The Plaintiffs claimed the publication of the sexual misconduct claim was a tort of outrage.  The court held the Ecclesiastical Abstention Doctrine precluded the court from reviewing the denomination’s methodology in investigating and evaluation of the claim.  The court likewise held that the publication that the denomination found the allegation “credible” was also an ecclesiastical matter because the weight to give to the allegation, as well as the evaluation of the conduct in question, was as ecclesiastical as the choice of method to communicate with members.  The allegation that representations by the denomination’s parachurch organization that it would not use donations to pay settlements in sexual misconduct cases were false could not be evaluated by the court.  Some funds, and not necessarily those donated by the Plaintiffs, were used to pay for treatment of the alleged victim and to pay for the investigation.  The court held that only the church and its parachurch arm could determine whether the expenditures were “ministry” or some other similar use of funds.

Fraudulent donation claims will be effective against embezzlers and thieves.  However, such claims will not likely be useful to redirect the flow of funds from one seemingly legitimate use to another.  Only incredibly precise representations of the contemplated use of donated funds will make an inquiry possible but even then there will always be some reasonable discretion to use the funds otherwise.