Connecticut ranks among the least friendly states for faith-based nonprofit organizations, largely due to restrictive regulatory and tax policies. These rules not only limit religious expression and charitable outreach but also mirror a national trend: as civic associations shutter, governments expand — shifting more costs onto inflating state budgets and, thus, taxpayers.
In Napa Legal Institute’s 2025 Faith & Freedom Index, Connecticut ranked 37th overall. The report cited “burdensome” policies, including a “state sales tax with limited exemptions for religious organizations’ and no legal protection for religious exercise during a state of emergency.”
At the same time, the index noted how the Constitution State was the first to enact a Religious Freedom Restoration Act (RFRA), which “prohibits the government from substantially burdening a person’s exercise of religion.”
Overall, the top U.S. jurisdictions in promoting religious and regulatory freedom protections were Alabama, Kansas, Indiana, Texas, and Mississippi, while Maryland, West Virginia, Massachusetts, Washington, and Michigan rounded out the bottom.
According to Frank DeVito, Senior Counsel and Director of Content for Napa Legal Institute, the regulatory environment surrounding faith-based nonprofits directly affects both civic engagement and government spending.
“Churches and religious organizations have traditionally played a major role in feeding the poor, housing the homeless, caring for the sick, helping orphans, assisting struggling families, educating children and youth, and so much more,” DeVito told Yankee Institute. “When government steps into these roles, it creates competition from agencies that are often less personal, more expensive, less efficient, and less caring for the individual — not to mention extremely costly to taxpayers.”
With the next legislative session beginning on Feb. 4, 2026, fiscal discipline and affordability are expected to be central themes, particularly as secular nonprofits advocate for increased funding. This raises an important policy question: could reforming regulations around faith-based organizations strengthen community engagement while easing pressure on state budgets?
Religious Engagement and Civic Health
Connecticut is one of the least religious states in the nation, ranking 41st in a September 2025 Pew Research Center study. Only 23% of those surveyed are considered highly religious. In related measures, importance of religion, attendance at services, daily prayer, and belief in God, Connecticut ranked 34th, 44th, 34th, and 43rd, nationally.
Despite this, Connecticut remains the most religious state in New England. Rhode Island, Massachusetts, Maine, New Hampshire, and Vermont all ranked lower.
Historically, New England was a hub of religious and civic life; today, levels of religious involvement have declined substantially. DeVito suggests that political ideology has replaced Christianity and/or traditional religion. In terms of policy, this reality has a “huge impact on how a country is governed, what its laws prioritize, and the respect that political actors will have for religious freedom.”
This shift has practical consequences. The Faith & Freedom Index argues that states legal and regulatory environment can even disincentive residents from forming new organizations to meet a community’s needs. Worse, DeVito stressed this can create a “bad cultural tendency” for people to be “less charitable in their financial giving, volunteering, etc. because they assume it is the government’s place to fill these roles rather than the citizen’s.”
Reconsidering regulations, then, would strengthen Connecticut’s religious nonprofits, DeVito stated. To start, he suggested that state policymakers should broaden religious exemptions from public programming and employment laws; enact protections for religious exercise during a state of emergency; and amend the nonprofit code to “provide protections in cases where internal governance or operations of a religious organization deserve/require particular consideration.”
Doing so may increase civic engagement since an individual’s religious zeal and volunteerism are linked, according to a 2024 Pew report.
And the time may be ripe for regulatory reform. Religious attendance has recently rebounded in Connecticut, especially across the Catholic dioceses. The Diocese of Bridgeport reports a 22% increase since 2022, with Bishop Frank Caggiano reflecting that the state and nation are in the “beginning of a spiritual re-awakening.” A June 2025 report, published in conjunction with the Hartford Institute for Religion Research, found that volunteerism has recovered among churchgoers since the pandemic, with more than half volunteering monthly.
Connecticut also ranks highly in charitable activity. In the most recent WalletHub report, the state placed 13th overall in charitable giving indicators. While the state ranked 28th in giving as a percentage of income (1.26%), nearly 9% of Connecticut taxpayers contribute to charity, among the highest participation rates nationally. This “combination of high charity density and relatively high donor participation suggests a strong charitable infrastructure and community engagement,” Diana Polk, communications manager at WalletHub, told Yankee Institute.
With a confluence of increased religious enthusiasm, volunteerism, and formidable charitable giving, state lawmakers should consider tapping into the percolating trends, providing the means to not only allow faith-based nonprofits to grow — but thrive.
The Fiscal Stakes for Connecticut
Strengthened faith-based nonprofits would not merely improve community life: it could also ease long-term fiscal pressures. When civic organizations play a robust role in providing social services, state and municipal budgets face less demand for new or expanded government programs.
However, Connecticut is moving in the opposite direction. In the past year, nonprofits have spearheaded the calls for Gov. Ned Lamont and lawmakers to increase government funding for their endeavors by loosening the state’s fiscal guardrails — a set of spending constraints that reversed decades of pension underfunding, improved the state’s creditworthiness, and saved the state more than $170 million annually in reduced pension debt costs.
In early 2025, Connecticut allocated nearly $3 million to nonprofits facing potential federal funding cuts, with most of the money supporting Planned Parenthood, LGBTQ organizations, and illegal immigration services. Fast forward to late fall: Planned Parenthood of Southern New England, once again, may receive state funding through the $500 million contingency passed by the General Assembly during the special session, Nov. 12-13.
However, the contingency fund was originally presented — and approved — to cover SNAP benefit shortfalls due to the federal government shutdown. Planned Parenthood’s funding was not discussed as a justification.
Not only does this possibly mislead the public, but it begs the question of how involved the government should be financially supporting nonprofits. After all, taxpayer money, entrusted to lawmakers, should benefit all residents through neutral public goods such as roads, sewers, or parks, not divisive causes. Nonprofits, by design, advance specific missions, so ideologically charged ones should rely on voluntary donations, not mandatory taxes.
Nevertheless, nonprofits are clamoring for more in the upcoming 2026 legislative session. Meanwhile, lawmakers exceeded the constitutional spending cap for the first time in almost twenty years, citing Medicaid shortfalls, and shifted $1.2 billion into off-budget accounts — enabling roughly $2.4 billion more in spending than the guardrails would normally allow. Weakening fiscal discipline risks undermining the economic stability Connecticut has spent years rebuilding.
This context creates an opportunity to rethink the relationship between government and civil society. The Brookings Institute has emphasized that church-affiliated organizations once formed the “backbone of civil society in America, involving almost half the population.” Yet, since the start of the new millennium, civic associations are disappearing; and the ramifications are felt even with an apathy toward the local democratic process.
Connecticut faces intertwined challenges of affordability, fiscal pressure, and declining civic participation. Regulations that burden faith-based nonprofits inadvertently shift more responsibility onto government, increasing costs and reducing community-driven solutions.
Modernizing these regulations provides a unique opportunity: by bolstering protections for religious exercise, easing unnecessary regulatory barriers, and empowering the private charitable sector, Connecticut can revive the institutions that made communities strong and government budgets light.
A renewed commitment to civil society, rooted in voluntary association rather than government expansion, would not only respect constitutional freedoms, but restore affordability, fiscal discipline, and participation in local life.
The trends in religious attendance, volunteerism, and charitable giving suggest that Connecticut is ready for such a shift. The question now is whether policymakers will recognize the opportunity.
