Why Religious Liberty Debates Are Really About Who Has Institutional Power

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Read the caption, not the sermon. In the religious liberty cases that reshape American law, the party invoking conscience is almost never a solitary believer. It is a school, a retail chain, a social services contractor, a diocese. The doctrine is written in the language of individual free exercise; the practice is institutional — budgets, property, personnel files, tax status, and contracts with the state. That gap between doctrine and docket is what I measure in the audits I run for this site, and it is measurable entirely in public records.

Define the term before arguing about it. Religious liberty debates, as covered here, are the body of litigation, legislation, and treaty-making through which religious organizations act as regulated political actors — claiming exemptions, subsidies, and immunities unavailable to comparable secular bodies. The semantic family — religious freedom, free exercise, church autonomy, institutional religious freedom, church-state disputes — points to the same underlying contest: who holds which powers. The answer sits in dockets, tax codes, and assessor rolls, and it does not require anyone’s testimony about belief.

The claimants are organizations, and the stakes are money

Start with the Supreme Court’s free exercise docket since 2012, all of it public. Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC (2012) was a parochial school defending a firing. Burwell v. Hobby Lobby Stores (2014) was a for-profit corporation contesting a contraceptive coverage mandate. Trinity Lutheran Church v. Comer (2017) was a church preschool competing for a state playground-resurfacing grant. Masterpiece Cakeshop (2018) was a bakery. Espinoza v. Montana Department of Revenue (2020) and Carson v. Makin (2022) concerned public tuition aid flowing to religious schools. Fulton v. City of Philadelphia (2021) was a child-placement contractor defending a municipal services contract. 303 Creative LLC v. Elenis (2023) was a web design business. Grants, contracts, mandates, payroll, tuition streams — the contested goods are fiscal.

The recurring individual claimants are prisoners invoking the Religious Land Use and Institutionalized Persons Act, as in Holt v. Hobbs (2015) and Ramirez v. Collier (2022). Those cases confirm the pattern rather than break it: RLUIPA is a statute that institutional coalitions pressed through Congress in 2000, passing the Senate without a recorded vote. When individuals win, they win under a framework that organizations built.

Tax status is the substrate

Institutional power begins as a line in the tax code. Churches are exempt from federal income tax under section 501(c)(3) and, unlike every other category of tax-exempt organization, are excused from filing IRS Form 990 — the disclosure form that lets the public inspect any other nonprofit’s balance sheet. The statutory basis is 26 U.S.C. § 6033, mirrored at the Legal Information Institute; the enforcement posture, including the special audit procedures that must precede a church examination, is set out in the IRS churches and religious organizations guidance.

Add the parsonage allowance under 26 U.S.C. § 107, which permits clergy to exclude housing costs from taxable income, and the state-level property tax exemptions that show up as flags on local assessor rolls, and the pattern is complete. The liberty at issue is a bundle of fiscal statuses held by corporate entities with balance sheets, not a state of mind. Our U.S. church tax privilege baseline tracks each provision to its statutory text.

Land and endowment: where the assets sit

Religious bodies are also major landholders and investors, and the records are public. Trinity Church Wall Street traces its Manhattan holdings to a 1705 land grant from Queen Anne; the parish still publishes financial statements. In February 2023 the Securities and Exchange Commission entered an order against Ensign Peak Advisors, the investment manager of the Church of Jesus Christ of Latter-day Saints, for filing securities disclosures through shell entities that concealed the size of a multibillion-dollar portfolio; the combined penalty was $5 million. The order is a public document. At the liability end, more than twenty U.S. Catholic dioceses have entered Chapter 11 since 2004, using bankruptcy — a corporate instrument — to pool assets and cap tort exposure in clergy abuse litigation. Every docket is on PACER.

Personnel: the ministerial exception as employer carve-out

The employment cases show the contested power plainly: control over staff. Under the ministerial exception recognized in Hosanna-Tabor and extended in Our Lady of Guadalupe School v. Morrissey-Berru (2020), employees whom a religious employer designates as ministers cannot bring discrimination claims — including under the Americans with Disabilities Act — that any other worker could file. In the 2020 case, the teachers performed largely secular duties; the designation, not the job description, controlled. The Court calls the doctrine church autonomy. On the docket it functions as an employer immunity, and its lower-court applications reach well beyond pulpits; our ministerial exception case file follows them.

Lobbying: the legislative layer

Religious bodies also help write the rules they are governed by. RLUIPA emerged from an institutional lobbying coalition and became law without a recorded vote. The Senate’s Lobbying Disclosure Act database shows religious entities filing quarterly reports alongside trade associations and pharmaceutical manufacturers; in 2023, the Church of Jesus Christ of Latter-day Saints appeared in that database with a federal lobbying registration. None of this is concealed. It is the ordinary machinery of political actors, and it is open to inspection.

Concordats: the treaty layer

Outside the United States, the same power is fixed in treaties. Italy’s Lateran Pacts of 1929, revised in 1984, ended Catholicism’s status as the state religion while preserving its institutional position in schooling and financing. Germany’s constitution, Article 140 incorporating Article 137 of the Weimar charter, authorizes state tax offices to collect an 8 to 9 percent church surcharge on behalf of the major churches; leaving a church requires a formal declaration at a civil registry office. Spain’s 1979 agreements with the Holy See permit taxpayers to assign 0.7 percent of their income tax to the Catholic Church. A concordat is signed between two corporate entities. Conscience never appears in the signature block. Our Lateran Pacts text and status file pairs each instrument with its implementing statutes.

How to audit the claim yourself

Nothing above requires insider access. PACER carries the federal dockets; the SEC’s enforcement database carries the Ensign Peak order; county assessor rolls carry the exempt parcels; the Senate’s LDA database carries the lobbying registrations; official gazettes carry the concordats and church tax statutes. Two hours with primary sources will outperform any amount of commentary, including this piece.

Frequently asked questions

Isn’t religious liberty fundamentally about individual conscience?

In doctrine, yes. On the docket since 2012, no. The recurring claimants are organizations, and where the named parties are parents, as in Espinoza and Carson, the operative beneficiaries are school systems. The contested goods are grants, contracts, tax treatment, and personnel authority. Individual claims succeed mainly under statutes that institutional coalitions helped enact.

What is the ministerial exception?

A judge-made doctrine, recognized by the Supreme Court in Hosanna-Tabor (2012) and broadened in Our Lady of Guadalupe School v. Morrissey-Berru (2020), that bars employees designated as ministers from bringing discrimination suits against religious employers — even where their duties are largely secular.

Do churches pay taxes in the United States?

Churches are exempt from federal income tax under 501(c)(3) and are excused from the Form 990 disclosure that binds other exempt organizations. Clergy may exclude housing costs from taxable income under 26 U.S.C. § 107. Property tax treatment varies by state and is visible on local assessor rolls.

What is a concordat?

A treaty between a state and a religious body — such as the Lateran Pacts with Italy (1929, revised 1984) or Spain’s 1979 agreements with the Holy See — that fixes the body’s legal status, financing, and privileges in binding international law.

Where can I verify the claims in this article?

In primary sources: PACER, the SEC enforcement database, the IRS churches guidance, the Senate LDA database, county assessor rolls, and official gazettes. The audit pages on this site link to the underlying records.

The paper trail is the argument

Call the values whatever you like; the records describe the same thing. Religious liberty debates are institutional power disputes because institutions file the cases, hold the exemptions, own the land, and sign the treaties. To find out who has power in any church-state conflict, read the docket, the tax code, and the deed — not the press release.

Dr. Yael Nussbaum audits religious bodies as regulated political actors for World Religion Watch. Every claim in this article is traceable to a public record; corrections with citations are welcome.