How #Obamacare Hurts Philanthropy

Since the plan was announced, #Obamacare has raised debate over whether it hurts constitutional rights, freedom of religion and numerous other issues. But what you might not understand is how Obamacare hurts philanthropy — deeply, truly, in the most threatening of manners. Political posts are not for everyone. But if you have heart and a soul and have at one point donated to a charity, or known someone who has benefited from a charity, then you may want to keep reading.

The contraception mandate requires non-grandfathered health plans to cover contraceptive services for women without cost-share — in other words, free birth control and coverage for other contraceptive measures including Plan B and abortion services (though those do not have to be free). I am assuming that any living, breathing human is aware of the uproar that followed this mandate. But if you’re not, here is the argument: for some, providing birth control goes against core religious beliefs or strongly held moral convictions, which are protected under the First Amendment. So, affront to religious freedom aside, what does contraception have to do with philanthropy?

After a lot of rallies, a lot of protests and a whole lot of nuns, the Obama administration announced that all faith-based nonprofits would be exempt. However, what they did not advertise was the requirements for being categorized as an exempt faith-based nonprofit. In order to be exempt, the nonprofit must:

  1. Has the inculcation of religious values as its purpose
  2. Primarily employs persons who share its religious tenets
  3. Primarily serves persons who share its religious tenets
  4. Is a non-profit organization under Internal Revenue Code section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii)*

What’s the problem?

First off, one problem is that this exemption redefines what it means to be a faith-based nonprofit — a definition that is different than the one the IRS uses to qualify faith-based nonprofits (FBOs) for tax purposes (wouldn’t it be helpful to have matching definitions within our government?). This definition limits FBO to churches or other houses of worship, church associations, or exclusively religious activities or any religious order. This will disqualify the majority of FBOs, who do not fall under this strict definition. 

In addition, if they do make it past the definition, this mandate does not cover faith-based organizations who primarily serve clients outside their own faithThis affects the majority of faith-based nonprofits. The majority of faith-based nonprofits make their services available to everyone (this was a mandate passed by Bush in 2002 if FBOs wanted to compete for government grants). There are a number of nonprofits that were funded by a specific religious organization or by founders of a specific denomination, but they will offer their services to anyone and everyone regardless of the client’s faith orientation. Not only is that a law if they want to be eligible for government grants, it’s also the Christian thing to do. Many did this before it was even a law because they believe in following the teachings of Jesus Christ, which emphasize service and compassion and inclusion. 

Therefore, relatively few faith-based nonprofits qualify for the contraception mandate exemption simply due to the fact that they are helping those outside of their own faith. Or, in other words (my words), they’re being penalized for acting according to their religious beliefs and helping serve everyone.

What’s the fallout?

So we have ourselves a problem. What’s the fallout? If employers do not provide plans which cover contraception, they will face a fine of $2,000 per employee. If we take a faith-based nonprofit such as Catholic Charities of West Michigan, with 265 employees, that’s a total yearly fine of $530,000. That’s $530,000 that should be being spent on continuing their work of helping people. Faith based organizations are some of the primary providers of foster care, adoption services, education, health care, homeless shelters, food banks, housing assistance, job development…just to name a few. They are everywhere, and the majority of their work goes unnoticed.

Simply put, the majority of these faith-based organizations will not be able to afford the fines leveraged on them by Obamacare, and they will end up closing. And what happens to all their clients then? When the nonprofits shut down, where will all those who need help go? You better believe that if you hadn’t noticed problems of homelessness, illiteracy, mental illness and poor health in your city yet, you will. Because those people are going to be forced out of the nonprofits and back onto the streets.

How much is your free birth control worth? Thought Catalog Logo Mark

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