Law regulates adoption agencies and procedures. While religious organizations have been given (wrongly, IMO) the right to discriminate in hiring against those who don't share their religious beliefs (even when staffing publicly funded activities), it seems to me that allowing them to discriminate against a specific class of persons who seek those services is another matter. Would that not allow some white supremacy church group to accept federal funds to run a soup kitchen and then refuse to serve people of color?
In fact, as I understand it, they wouldn't be able to discriminate for any reason
as long as they receive public funds. However, private organizations not receiving tax monies are pretty much free to do as they please. Note well that private entities deemed to provide public services (as you mentioned, I think) also fall under the anti-discrimination laws (restaurants, hotels, transportation services, etc). Again, however, the RCC would seem to have a loophole here - if they are offering
private adoption services to church members only - then they can do pretty much whatever they want. They only ran afoul of the law if they supposedly provide services
to the general public. This also goes along with your "self-propagation" comment. Or at least, that's how I understand the situation. I have been known to be wrong, on occasion
, especially where legal issues are concerned.