How SCOTUS decisions are used to fund a discriminatory nonprofit in Arizona

The court's rollback of LGBTQ+ rights are proving successful for certain businesses that receive taxpayer funds.

How SCOTUS decisions are used to fund a discriminatory nonprofit in Arizona
Photo credit: Adobe Illustrations

Despite an executive order from Gov. Katie Hobbs, federal court decisions have hampered local governments from enforcing their own nondiscrimination ordinances in relation to LGBTQ+ people. As a result, at least one current contractor that forces staff to sign a faith pledge claiming homosexuality is immoral and ignores trans people’s existence is still raking in taxpayer money. 

In October, LOOKOUT reported on how Phoenix Rescue Mission, a religious nonprofit that provides services to unhoused people, openly discriminates against LGBTQ+ people through a statement of faith pledge they require all employees and volunteers to sign

The agreement Phoenix Rescue Mission issues to employees states that God “immutably creates each person as male or female”; that marriage’s sole meaning is “the uniting of one man and one woman”; and that God “intends sexual intimacy to occur only between a man and a woman who are married.”

The religious nonprofit has received over $5.8 million in city, county and state funding since 2018, public records show. 

In the first week of Hobbs’s tenure, she signed an executive order that updated a 2009 fair employment order to bar state agencies and contractors from openly discriminating against LGBTQ+ people. But while Hobbs’s executive order didn’t directly include an exemption for religious organizations and practices, that exemption already exists in federal law and other parts of state law.

An analysis of Phoenix Rescue Mission’s tax records and payments made by government agencies show they have still received hundreds of thousands of taxpayer dollars since Hobbs signed her order in January, including almost a quarter million paid out by the state. 

County and city payment records also show various agencies paid Phoenix Rescue Mission more than a million dollars since Jan. 2023. 

There are multiple local and state regulations that prohibit such discrimination by government contractors, but those rules, spokespeople said, either aren’t retroactive or make significant exceptions for religious organizations, following the U.S. Supreme Court’s recent rulings that gave larger freedoms for how they hire people and engage with state contracts.   

What that comes down to: Phoenix Rescue Mission is able to continue discriminating against LGBTQ+ people without legal repercussions.

Federal Rulings vs. State Protections

Phoenix Rescue Mission likely isn’t the only one of its kind. Many faith-based organizations throughout the U.S., including schools, foster care agencies and housing nonprofits, require employees to sign religious agreements known as morality clauses. But those organizations often don’t advertise that, making it difficult to know which ones do.

Following LOOKOUT’s reporting, staff members of the Arizona Attorney General’s Office met with several Democratic state representatives to discuss how to address the issue.

Richie Taylor, a spokesperson for the office, said the meeting was “a productive conversation” but wouldn’t say what the next steps were or whether the office planned to officially investigate the issue.

Phoenix Rescue Mission did not respond to multiple requests for comment.

Attempts by federal, state and local government officials to outlaw discrimination based on gender identity and sexual orientation have come up short.

At the crux of the issue is the Supreme Court, which in recent years has set precedents limiting how jurisdictions can enforce hiring nondiscrimination laws.

In 2012, the Supreme Court carved out a “ministerial exception” that gave religious organizations the freedom to make faith-based decisions when hiring ministers, but the decision did not give clear guidance on how to define a minister, and if that could be a rank-and-file employee or a leading religious practitioner.

In 2020, the court extended that exception and clarified the definition to include anyone whose work supports the organization’s religious mission, such as teachers. And in 2021, the court said that if a government has a contract that prohibits discrimination but allows for some exemptions, it can’t refuse to provide the same for religious groups.

Despite that, Arizona recently attempted to put its own protections in place. In January 2023, on her very first day in office, Hobbs signed an executive order banning state agencies and state contractors from discriminating based on sexual orientation and gender identity. 

Christian Slater, Hobbs’s spokesperson, said in an email that the order doesn’t apply to active contracts, of which Phoenix Rescue Mission has two. Those expire in 2024 and 2027.

Phoenix Rescue Mission and its related entities received over $4 million in state funding since 2018, according to the Arizona Financial Transparency Portal. Over $250K of that was paid out after Hobbs’ executive order was signed.

“They entered into those contracts before the Governor’s executive order and it can’t be enforced on already signed contracts,” Slater said. 

But it’s unclear if Hobbs’s office would try to enforce a nondiscrimination agreement with the organization, given the Supreme Court rulings and existing protections for religious organizations in state law.

Seeing SCOTUS's effects

Maricopa County and a number of cities in the Valley have local ordinances banning their contractors from discriminating against LGBTQ+ people. But because of the federal court’s decisions expanding religious freedoms and discrimination, their rules make sweeping exceptions for religious organizations.

LOOKOUT dug into how much money Phoenix Rescue Mission—which also does business as Phoenix Gospel Mission—received from the most populous jurisdictions in the Valley. 

At least four cities in Maricopa county have contracts with Phoenix Rescue Mission, both currently or in the recent past. Altogether, the organization has received a combined $1.7 million in recent funding. 

In statements to LOOKOUT, Phoenix, Tempe and Scottsdale spokespeople all said there are religious exemptions for freedom of speech. Glendale, the fourth city, did not respond to questions from LOOKOUT.

In Scottsdale, the organization doesn’t have an active contract, but will be able to apply for money in the future, said city spokesperson Kelly Corsette.

“There is considerable case law allowing religious organizations certain leeway in hiring those who share the organization’s beliefs,” Corsette said in an email.

Maricopa County also has an ongoing relationship with the organization, according to contract and payment records. 

The county paid Phoenix Rescue Mission roughly $99K in the past two fiscal years and has a current contract with the organization that could be up to $248K, according to county records.

County contracts include a nondiscrimination clause that mirrors the state’s, county spokesperson Fields Moseley said.

Private donors stay silent

Though Phoenix Rescue Mission has received steady government funding in recent years, the overwhelming majority of its revenue comes from private donations, tax records show. 

Between July 2021 and June 2022, the organization received $1.5 million in government grants and nearly $29 million in other contributions.

LOOKOUT reached out to several businesses and nonprofits that have partnered with or donated to Phoenix Rescue Mission in recent years. They include:

  • Phoenix Mercury basketball player Brittney Griner, one of the most well-known, openly gay athletes in the world, whose annual shoe drive raises money for the organization; 
  • Thunderbirds Charities, the charitable giving arm of The Thunderbirds, which grants funds raised by the Waste Management Phoenix Open and gave $750K to Phoenix Rescue Mission in 2019;
  • M3F Festival, a nonprofit music festival that takes place in Downtown Phoenix, which lists Phoenix Rescue Mission as one of its community beneficiaries;
  • The Junior League of Phoenix, a nonprofit women’s organization, which gave the organization an $85K grant in 2020.

Those organizations did not respond to questions about how they decided to fund Phoenix Rescue Mission or whether they plan to continue to do so in the future, given its discriminatory hiring practices.

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