Klan Shelter Hypo

I agree that under the facts Rob has proposed, the Klan shelter should probably be eligible for funding, since it is providing the services and is considering employees based not directly on their race, but rather on their ideological beliefs (in this case in racism), just as other ideological organizations seek employees of their ideology -- including religious organizations when they consider religion in hiring.  However, I think there is an argument for allowing the government to treat the religious-belief and racist-belief criteria differently; the right of religion-based hiring does not stand or fall with an asserted right of racism-based hiring.  Religious beliefs as a category have a positive constitutional protection that racist beliefs do not.  The government should be at least neutral toward religious beliefs and arguably must give them as much solicitude as it gives to any other ideology that it protects (a line of free exercise cases, several from Judge Alito when he was on the 3d Circuit, suggest this principle).  Racist beliefs don't have that kind of solicitude, although they of course enjoy basic free speech and expressive associational protections; i.e. they have a right to be free from impositions, but not a right to neutral treatment in funding.  So, since the government allows various funded organizations to consider ideology in their hiring, there is a strong argument that it must do the same for religious organizations' religion-based hiring, but a much less strong argument that it must do so for racism-based hiring.  The distinction between religious exercise as a positive constitutional value and racial bias as a tolerated position, but without such value, is emphasized in Norwood v. Harrison, 413 U.S. 455, 468-70 (1973) (striking down textbook loans to families at racially discriminatory schools five years after upholding textbook loans to families at schools that considered religion in hiring etc.).  It's true that the "segregation academies" in that case discriminated based actually on race, not just on racist ideology; but the broader distinction between religion and racism also seems part of the argument.