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The President's Advisory Council on Faith-based and Neighborhood Partnerships voted in February on whether the government should require houses of worship to form separate corporations to receive direct federal social-service funds. Thirteen members voted yes; twelve, including most evangelicals on the council, voted no.

"The government regulates what it funds. If it funds church activities, it will regulate them. But if churches form separate corporations to receive federal funds, this will help ensure that congregations will be free from government subsidies and corresponding government oversight. The formation of a separate corporation helps to shield a church from liability. It also avoids intrusion into core bodies, maintains a clear distinction between the institutions of church and state, and avoids some of the most difficult church-state conflicts."

"The state may wish for collateral, and it may want the church's other affairs to be investigated. This is a practice I would work to avoid, as the risks may outweigh the benefits. Furthermore, there may be a few members opposing the program. As a church program, their opposition can be detrimental and cause a rift; [whereas] a program carried out by an nonprofit organization that is aligned with the church does not need such unanimous approval and may prevent internal conflicts and avoid staff hiring conflicts."

"Establishing nonprofits is a 21st century expression of the Wesleyan legacy. Wesley believed the world was his parish and operated accordingly in starting social ministries. In today's society, one of the most effective ways to minister to the world is to establish a 501(c)3. If today's church were the Acts church, there would be no need for the department of health ...

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Should Churches Incorporate?
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April 2010

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