Author: LegalEase Solutions

QUESTION(S) PRESENTED

What are the viable causes of action against a federally funded NGO that serves only specific race and religion?

SHORT ANSWER(S)

Possible causes of action against an NGO that aides only a specific race or religion are under violations of 42 U.S.C. § 2000d, violation of MCL 37.2302(a) and violation of 26 U.S.C. § 501(c).

RESEARCH FINDINGS

Following are the possible causes of actions against a federally funded NGO that serves a particular race or religious group: 

1. Violation of 42 U.S.C. § 2000d

• 2000d. Prohibition against exclusion from participation in, denial of benefits of, and discrimination under Federally assisted programs on ground of race, color, or national origin

No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.

42 U.S.C. § 2000d 

“The applicable provisions of the Fourteenth Amendment extend protection to ‘all persons,’ and therefore include aliens.” Leger v. Sailer, 321 F. Supp. 250, 251 (E.D. Pa. 1970) aff’d sub nom. Graham v. Richardson, 403 U.S. 365, 91 S. Ct. 1848, 29 L. Ed. 2d 534 (1971). Thus, 42 U.S.C. § 2000d prohibits discrimination based on race, color, or national origin to all persons, including aliens. In the instant case, the grievance is that the NGO that benefits Federal financial assistance favors or serves only Jewish refugees. Thus, there can be a possible claim of racial discrimination by other refugees, other than Jews.

Violation under 42 U.S.C. § 2000d can be pursued as an individual action or a class action. Zarate v. State Dep’t of Health & Rehabilitative Servs., 347 F. Supp. 1004, 1006-07 (S.D. Fla. 1971) aff’d sub nom. State Dep’t of Health & Rehabilitative Servs. of Florida v. Zarate, 407 U.S. 918, 92 S. Ct. 2462, 32 L. Ed. 2d 803 (1972). The suing party should meet the prerequisites of Rule 23(a) Fed.R.Civ.; they “fairly and adequately” represent and protect the interests of the class. Id.

“[D]iscrimination that violates the Equal Protection Clause of the Fourteenth Amendment committed by an institution that accepts federal funds also constitutes a violation of Title VI.” Gratz v. Bollinger, 539 U.S. 244, 305, 123 S. Ct. 2411, 2446, 156 L. Ed. 2d 257 (2003) (citing Alexander v. Sandoval, 532 U.S. 275, 281, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001); United States v. Fordice, 505 U.S. 717, 732, n. 7, 112 S.Ct. 2727, 120 L.Ed.2d 575 (1992); Alexander v. Choate, 469 U.S. 287, 293, 105 S.Ct. 712, 83 L.Ed.2d 661 (1985)).

37. Violation of MCL 37.2302(a) 

37.2302. Public accommodations; prohibited practices

Sec. 302. Except where permitted by law, a person shall not:

(a) Deny an individual the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation or public service because of religion, race, color, national origin, age, sex, or marital status.

MCL 37.2302(a).

“In order to state a claim under MCL 37.2302(a), plaintiff must establish four elements: (1) discrimination based on a protected characteristic (2) by a person, (3) resulting in the denial of the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations (4) of a place of public accommodation.” Haynes v. Neshewat, 477 Mich. 29, 35, 729 N.W.2d 488, 492 (2007). “The public accommodations provision of the CRA, MCL 37.2302, does not limit its prohibition against discrimination to members of the public. Rather, § 302(a) prohibits unlawful discrimination against any individual’s full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation.” Haynes v. Neshewat, 477 Mich. 29, 40, 729 N.W.2d 488, 495 (2007).

“Place of public accommodation” means a . . . institution of any kind, whether licensed or not, whose . . . services, facilities, privileges, advantages, or accommodations are extended, offered, sold, or otherwise made available to the public.

MCL 37.2301(a).

“Public service” means . . . a tax exempt private agency established to provide service to the public, except that public service does not include a state or county correctional facility with respect to actions and decisions regarding an individual serving a sentence of imprisonment.

MCL 37.2301(b).

Thus, public service means a tax exempt private agency established to provide service to the public. Thus, in the instant case, if the NGO is a non-profit organization that operates exclusively for the promotion of social welfare, and has tax exemption under federal or state laws, then it is obligated to provide equal accommodation under MCL 37.2302(a). 

• Violation of 26 U.S.C. § 501(c)

In Bob Jones Univ. v. United States, 461 U.S. 574, 577, 103 S. Ct. 2017, 2021, 76 L. Ed. 2d 157 (U.S.S.C. 1983), the United States Supreme Court has held that nonprofit private schools that prescribe and enforce racially discriminatory admission standards on the basis of religious doctrine do not qualify as tax-exempt organizations under the Internal Revenue Code, nor are contributions to such schools deductible as charitable contributions. 26 U.S.C. §§ 170, 501(c)(3).

The Supreme Court went on to hold that “to warrant exemption under § 501(c)(3), an institution must fall within a category specified in that section and must demonstrably serve and be in harmony with the public interest. The institution’s purpose must not be so at odds with the common community conscience as to undermine any public benefit that might otherwise be conferred.” Bob Jones Univ. v. United States, 461 U.S. 574, 592, 103 S. Ct. 2017, 2028-29, 76 L. Ed. 2d 157 (U.S.S.C. 1983).

Going by the above principle, then the Bob Jones decision extends to any organization claiming exempt status under section 501(c)(3) and to any activity violating a clear public policy. Thus, if the NGO is a 501c organization, and if it is acts discriminatory in violation of public policy, then there is a claim to revoke its 501c status.

CONCLUSIONS

Not all NGOs in the United States are incorporated. It is remarkably easy to form a charitable entity in the United States. A person can create a charitable trust simply by executing and delivering a deed, contract, or other instrument conveying the trust property to another person (or even to herself) in trust for the charitable purpose. No government approval is required to form the trust beyond the standard requirements for signing a contract or deed conveying property, however many U.S. states require all NGOs formed for religious, educational or other charitable purposes to register with a state charity official, particularly if it will be soliciting funds from the public.[1]

In Michigan, Charitable Organizations and Solicitations Act regulate the registration of charitable organizations and prescribe the standards of conduct and administration and prohibit certain actions in connection with charitable solicitations and provide remedies and penalties for violations. M.C.L 400.271. et seq.

42 U.S.C. § 2000d provides prohibition against denial of benefits of and discrimination under Federally assisted programs on ground of race, color, or national origin. Likewise, MCL 37.2302, prohibits against discrimination to members of the public if the NGO is a non-profit organization that operates exclusively for the promotion of social welfare, and has tax exemption under federal or state laws. Further, when any organization claims exemption status under section 501(c)(3) but does any activity violating a clear public policy, such status can be revoked under the Bob Jones decision.

[1] http://www.humanrights.gov/fact-sheet-non-governmental-organizations-ngos-in-the-united-states.html#_ftn1