Florida Tax Review, Vol. 5, No. 9 (2002), pp. 779-849


This Article expands the discussion of whether tax-exempt charities, for constitutional law purposes, should be treated as government actors, as private actors or as something in between. While government actors are subject to constitutional law restrictions concerning discrimination and free speech, private non-government actors are not generally subject to these same restrictions. Although tax-exempt charities are often thought of as sovereigns and, thus, government-like, the fact remains that charities are private entities created to serve public purposes. As private entities, charities - like all other private entities - are not necessarily bound by constitutional law principles. Still, the many “public” aspects of charities seem to dictate allegiance to some higher principle than merely being permitted to do what every other private entity may do. Hence, the Supreme Court ruled that charities may not violate a principle called “established public policy.” But what does this mean? Surely it does not mean that charities, because of the public policy limitation, are somehow transformed into government actors limited by constitutional law principles. Nor does it mean that charities are completely “free” of societal responsibility in the same sense that other private entities are “free.” Thus, charities exist in an undefined space somewhere between government and private in which constitutional law principles do not directly apply, but something constitutional-like (i.e., the public policy limitation) surely does apply. The question is: how is it applied?