Religious nonprofits won a partial victory – but the restrictions may surprise you
A federal appeals court just gave religious nonprofits a roadmap for hiring selectively while taking government money – as long as they keep programs properly separated.
On November 26, 2025, the Ninth Circuit Court of Appeals amended a decision that fundamentally reshapes how faith-based organizations can manage hiring when they accept public funding. The ruling in Youth 71Five Ministries v. Williams, originally filed on August 18, 2025, offers what amounts to a permission slip for religious nonprofits: you can maintain strict religious hiring standards, just not for the programs the government is paying for.
Here's what happened. Youth 71Five Ministries, a Christian youth organization in Oregon, had received state grants for years with minimal friction. But in 2023, Oregon's Department of Education added a new requirement to its grant program. Any organization accepting state money had to certify it did not discriminate in hiring based on religion, among other protected characteristics. The catch for 71Five was that the organization requires all its employees and volunteers to affirm a Christian statement of faith and maintain involvement in a local church.
When the state discovered this practice and withdrew a conditional award of $410,000, 71Five sued. A district court initially sided with the state, but 71Five appealed to the Ninth Circuit, which issued this amended ruling on November...
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