Charitable Choice originated with the introduction of Sec. 104 in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, H.R. 3734. The section 104 Charitable Choice rules are intended to provide a framework and, indeed, to encourage states to contract with charitable, religious or private organizations for the provision of federally-funded social services and community initiatives.
Past rules often required service providers to be secularized and, therefore, often excluded many faith-based organizations from participating. The section 104 Charitable Choice rules permit faith-based providers of social services and community initiatives to compete for and obtain government funding, while simultaneously protecting the principles and beliefs of those organizations against government intrusion.