News

Opinion released March 27, 2024 from the Fourth Circuit Court of Appeals. Available here: https://www.ca4.uscourts.gov/opinions/231453.P.pdf

A student and her mother sued a private religious school under Title IX. Generally, private schools are not required to comply with Title IX unless they receive “federal financial assistance”. Part of the student’s lawsuit asserted that the school’s status as a 501(c)(3) tax exempt organization constituted “federal financial assistance” which would mean the school must comply with Title IX.

The district court agreed with the student’s argument. The Fourth Circuit Court of Appeals reversed, concluding that 501(c)(3) status does not constitute receipt of federal financial assistance.  

Why is this important? 

Most directly, this decision is important for private schools organized as a 501(c)(3) that do not accept federal funding or financial assistance. Those schools continue to avoid the compliance obligations, costs, and requirements of Title IX. If the appellate court had upheld the district court decision, this would be a significant change.  

More broadly, this case is another data point in the ongoing national discussion about what it means to be “tax exempt” for religious and educational organizations – is it a form of government subsidy or a reflection that the government should not be entangled with religion?