Opinion ID: 1323498
Heading Depth: 1
Heading Rank: 1

Heading: the act's unequal treatment of religious organizations

Text: With these principles in mind, we note that section 75.7(a)(1) of the Act grants an exemption from the licensing and reporting requirements to a broadly defined class of religious organizations. The very indefiniteness of the exemption guarantees that its scope is wide; indeed, it is difficult to imagine how any organization with a colorable claim to bona fide religious purposes or activities would not fall within one or another of the exemption's classifications. [5] The proviso, however, which immediately follows in the same section denies the benefits of the exemption to those religious organizations which derive their financial support primarily from contributions solicited from persons other than [their] own members. The Court of Appeals held that this qualification to the general exemption works an impermissible establishment of religion. We agree. Although member is nowhere defined in the Act, section 75.3(12) does define membership as a status . . . which provides services and confers a bona fide right, privilege, professional standing, honor or other direct benefit, in addition to the right to vote, elect officers, or hold office. Assuming arguendo that the term member as used in section 75.7(a)(1)'s proviso connotes someone with membership status, and considering the spirit of the Act and the purposes which it seeks to accomplish, see, e. g., Stevenson v. City of Durham, 281 N.C. 300, 303, 188 S.E.2d 281, 283 (1972), we presume the intent of the proviso is (1) to distinguish between religious organizations presumably somehow accountable to persons providing financial support, i. e., their members, and those religious organizations which are not presumably so accountable because their financial support is largely provided by non-members, and (2) to insure that only the latter are subject to the Act's accountability requirements. The intended purpose of the proviso may thus be secular in nature, in that it seeks to promote the Act's policy to require full public disclosure of facts relating to . . . organizations [which] solicit funds from the public for charitable purposes . . . G.S. 108-75.2. (Emphasis supplied.) Nevertheless, the effect of the proviso is to alter the original exemption's religious neutrality. The result is a qualified exemption which favors only those religious organizations which solicit primarily from their own members. The inescapable impact is to accord benign neglect to the more orthodox, denominational, and congregational religions while subjecting to regulation those religions which spread their beliefs in more evangelical, less traditional ways. This the state may not do. The burden imposed by the Act's reporting requirements are in no wise de minimis. To note but one, section 75.6(6) requires as a condition of licensing that an applicant organization furnish the state with a detailed financial statement, independently audited according to nationally accepted accounting and reporting procedures. However commendable as a sound business practice, such an audit does not spring full blown without considerable expense and administrative coordination. The primary effect of the proviso is to place the full range of burdens attendant to the licensing procedure, including the audit requirement, solely upon those religious organizations which primarily go to the public with their religious messages and requests for the financial support needed to propagate them. The result is an inhibition by the state of a specific mode of religious practicethat of spreading one's religious beliefs via personal visitations, use of the news media, and distribution of literature among the public at large. Yet such an age-old type of evangelism, whether carried out in the public streets or over the public media, has as high a claim to constitutional protection as the more orthodox types of congregational practices. Murdock v. Pennsylvania, supra, 319 U.S. at 110, 63 S.Ct. at 873. The state argues that when a religious organization solicits primarily from non-members, the state's interest in regulating the accountability of public solicitation thereby increases. There is no showing in the record, however, that member or membership status in a religious organization ipso facto carries with it a legally enforceable right to demand and receive an accounting of the organization's fund-raising and solicitation activities. Nor is there the slightest suggestion that member funded religious organizations do in fact regularly account to their members with the same degree of specificity and audit safeguards as that which the Act requires of non-member funded organizations. Thus the conclusion is unavoidable that the proviso works to place member funded and public funded religious organizations on an unequal footing in the marketplace of religious ideas. Moreover, even if it could be shown that member funded religious groups were accountable to their members with the same kind of specificity required in the Act, this would not provide support for making only non-member funded religious groups so accountable to the state. The state concedes that the acts of soliciting monies for the support of religious organizations, including those in this case, and the giving of those monies, are expressions of religious faith. These acts are seen by those who engage in them as the soliciting for, and the giving to, God that which is God's. Some religious organizations, such as plaintiffs' here, as we have noted, see their mission as being to evangelize and solicit from the public at large. They eschew the membership form of organization. Others receive support from both members and non-members in varying degrees. Still others rely solely on members. All do so on the basis of their religious tenets. A statute which on its face seeks to regulate all of the first kind of religious organization, only some of the second, and none of the third must, finally, make its classification on the basis of religious test. The clear import of the Establishment Clause is, therefore, that a statute cannot on its face subject some religious organizations to state regulation and at the same time exempt others on the basis of the percentage of members which contribute, respectively, to their support. We note that two recent federal district court decisions have reached similar conclusions in dealing with the partiality of exemptions granted religious organizations. In Valente v. Larson, Civil No. 4-78-453 (D.Minn., prelim. inj. granted July 5, 1979), U.S. District Court Judge Miles Lord granted a preliminary injunction barring state officials from requiring plaintiff Holy Spirit Association for the Unification of World Christianity to comply with the provisions of the Minnesota Charitable Solicitations Act, Minn.Stat. §§ 309.50 et seq., Substantially equivalent to the Act challenged in the instant case, the Minnesota statute exempts from its reporting requirements those religious organizations which receive more than one-half of their contributions from members. Minn.Stat. § 309.515. Judge Lord's order upheld the Report and Recommendation made by United States Magistrate Robert Renner, which pointed out, id. at 19, that: Members of the public who contribute to a church which solicits 49% of its contributions from the public have no more contact with it, nor is that church any more answerable to them, than if the church solicited 51% of its contributions from the public. Yet, in both instances, good faith solicitors, as well as the public, have the same interest to be protected by the State. Clearly, whatever its legislative purpose, the [Minnesota] Act has the immediate effect of subjecting some churches to far more rigorous requirements than others. (Emphasis supplied.) In Bob Jones University v. United States, 468 F.Supp. 890 (D.S.C.1978), the court rejected the government's contention that the exemption from federal taxes generally granted to charitable organizations by I.R.C. § 501(c)(3) should be applied only to those organizations which operate in harmony with federal desegregation policies. Noting that [c]onflict with the Establishment Clause lurks within the [government's] construction of the exemption provision, the court concluded that: The construction of § 501(c)(3) argued by the government would do away with the general grant of tax exemptions to all religious organizations, which was found in Walz to constitute an act of benevolent neutrality, and, in effect, transforms the statute into a law that provides a special tax benefit, because favorable tax status will be accorded only to some, not all, religious organizations. Since only selected religious institutions would receive exemption under defendant's interpretation of the law, tax exemption provided by the section no longer manifests neutrality towards all religions but, rather, favors some over others. The effect is to strengthen those religious organizations whose religious practices do not conflict with federal public policy and to discriminate against those religious groups whose convictions violate these secular principles. The unavoidable effect is the law's tending toward the establishment of the approved religions. 468 F.Supp. at 900-901. (Emphasis supplied.) Our decision today accords with the Establishment Clause principles affirmed in these cases. Neither the First Amendment nor Article I, Sections 13 and 19, of the State Constitution permit the state to aid some religions by burdening others.