Does Tax-Exempt Status Without More Create Title IX Obligations?

Compliance with Title IX Obligations for Educational Institutions

With the recent release of the 2024 Final Title IX regulations that must be implemented by August 1st of this year, one of the first questions that must be asked is whether a school, college, or university must comply with the obligations set forth under Title IX.  For public educational entities, the answer more often than not is a resounding yes because they are recipients of federal funding.  For private schools, the determination turns on whether the school accepts federal funding.  When the federal government provides money directly to a school, the answer is easily ascertainable.  The more nuanced question is whether a school becomes obligated to adhere to Title IX merely because of its tax-exempt status.    

Impact of Tax-Exempt Status on Title IX Compliance

Does tax-exempt status alone require a private, nonprofit school, college, or university to adhere to and comply with Title IX obligations?  There are differences of opinion in our federal courts.

In July 2022, a federal district court in the Central District of California held that a religious-based school’s tax exemption constituted “federal financial assistance” within the meaning of Title IX As a result, a female public high school football player could bring a Title IX claim against a private religious school that barred her from playing in games on its premises against its football team.  E.H. v. Valley Christian Academy, 616 F. Supp. 3d 1040, 1050 (C.D. Cal. 2022).

On March 27, 2024, the Fourth Circuit Court of Appeals, the first federal appellate court in the nation to address this issue, reached a different conclusion and reversed a Maryland district court decision that echoed the rationale in the Valley Christian Academy case.  In Buettner-Hartsoe v. Baltimore Lutheran High School Association, 96 F.4th 707, 710 (4th Cir. 2024), the Fourth Circuit Court of Appeals held that organizations with tax-exempt status do not receive federal financial assistance for Title IX purposes.  Less than a month after this case was decided, the Department of Education (the “Department”) issued its 2024 Final Title IX Regulations on April 19, 2024.  The Department did not change its definition of “federal financial assistance” in the new regulation but the Department did address  the split in federal decisions concerning the definition.  Specifically, in its comments, the Department provided, “[g]enerally, tax benefits, tax exemptions, tax deductions, and most tax credits are not included in the statutory or regulatory definitions of Federal financial assistance.”  The Department further explained that “even if tax-exempt status is considered a form of Federal financial assistance by some courts, not all educational institutions that have tax-exempt status are subject to the Department’s Title IX regulations because the Department’s Title IX regulations only cover educational institutions that receive funds from the Department.” (Emphasis added.)

While the Department’s comments about its regulations are not binding law, its interpretation of its regulations is given deference.  Here, the Department’s analysis, particularly when read in conjunction with the Fourth Circuit decision referenced above, can lead one to reasonably conclude that we will see a growing trend where Title IX is found not to apply to private, nonprofit schools, colleges, or universities merely because of their tax-exempt status.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

© 2024 Atkinson, Andelson, Loya, Ruud & Romo

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 16: Peace, Justice, and Strong Institutions

The issues highlighted in the article are connected to SDG 4 as it discusses educational institutions’ obligations under Title IX. SDG 5 is also relevant as it addresses gender equality, which is a central concern in the article. Additionally, SDG 16 is connected as it focuses on ensuring peace, justice, and strong institutions, which includes the legal interpretation of Title IX.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 4.7: By 2030, ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including, among others, through education for sustainable development and sustainable lifestyles.
• SDG 5.1: End all forms of discrimination against all women and girls everywhere.
• SDG 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

The specific targets identified based on the article’s content are related to promoting sustainable development through education (SDG 4.7), ending discrimination against women and girls (SDG 5.1), and ensuring equal access to justice (SDG 16.3).

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for SDG 4.7: Proportion of schools with policies and programs that promote sustainable development.
• Indicator for SDG 5.1: Proportion of women and girls subjected to sexual harassment or violence in the previous 12 months.
• Indicator for SDG 16.3: Proportion of population who have experienced a dispute in the past two years and who accessed a formal or informal dispute resolution mechanism, by type of mechanism.

The article does not explicitly mention indicators, but based on the identified targets, these indicators can be used to measure progress towards the targets. The mentioned indicators reflect the need to assess the presence of policies promoting sustainable development in schools (SDG 4.7), the prevalence of sexual harassment or violence against women and girls (SDG 5.1), and the accessibility of dispute resolution mechanisms (SDG 16.3).

Table: SDGs, Targets, and Indicators

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