Federal Grants: Local Churches Must Review and Understand Requirements

On July 31, 2025, the Office of General Counsel shared via email certain information relating to federal grants with Conference Ministers, so that they could encourage their Local Churches to review and understand the terms of federal grants Local Churches may be considering. The email was shared with some Local Churches, and subsequently the text of the email was reproduced on social media and shared widely by people. Some folk questioned the authenticity of the text due to the lack of original source link; accordingly, the Office of General Counsel is providing similar information in this space. As always, the Office of General Counsel does not advise Local Churches of the United Church of Christ; however, it does provide information that Local Churches may find useful in determining their own next steps with the guidance of their own attorneys. Local Churches are encouraged to avail themselves of resources their Conferences may have and to be in touch with their Conferences on these matters.

The federal government has recently changed the terms and conditions of certain grants. Some Local Churches have received and relied upon HHS grants, FEMA grants, and other types of federal grants to support their ministries. Some Local Churches are planning to apply for federal grants under the Nonprofit Security Grant Program. The Notice of Funding Opportunity indicates the standard Department of Homeland Security terms and conditions will apply to subrecipients of the grants. Churches should carefully review the terms and conditions of any federal grant they are choosing to apply for with their own legal counsel. The standard terms and conditions for any DHS grant, including the Nonprofit Security Grant Program, now require recipients and subrecipients of the funding, among other things, to cooperate with immigration officials, not engage in or promote programs that engage in DEI, DEIA, or “discriminatory equity ideology” within the meaning of the Executive Order, in violation of anti-discrimination laws, and not participate in discriminatory prohibited boycotts relating to Israel. HHS is also requiring certification of compliance with not engaging in DEI activity. The terms and conditions of ANY federal funding MUST be carefully examined to ensure that accepting a grant does not make the church’s ministry an instrument of the state by dictating what religious activities the church can engage in and with whom the church can associate.

Whether Local Churches should accept the terms and conditions of these grants, what will happen if they are accused of violating them, and whether First Amendment defenses exist are issues and risks churches should raise with their legal counsel.  

The General Synod of the United Church of Christ, various settings of the UCC, and its predecessor denominations, have a rich heritage of promoting religious freedom and tolerance. Believing that churches are strengthened, not weakened, by the principle of the separation of church and state, the UCC has long acknowledged its responsibility to protect the right of all to believe and worship voluntarily as conscience dictates, and to oppose efforts to have government at any level support or promote the views of one faith community more than another. At its twentieth gathering, the General Synod continued this legacy by encouraging the involvement of the United Church of Christ in a national campaign to promote the principle of the separation of church and state and the proper role of religion in society. The UCC has a long history of advocating against the establishment of religion by the government, and has taken public positions supporting the separation of church and state, including positions that argue against churches being eligible for public funding, such as the position that it took in the amicus brief it joined inTrinity Lutheran v. Comer. Each Local Church of the United Church of Christ can decide for itself whether to pursue funds from the government.

The information provided in this article is not legal advice.  If you need legal advice, please consult with an attorney.