This United States Supreme Court decision struck down a provision of the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003, which required organizations to adopt a policy explicitly opposing "prostitution" in order to receive funding to combat HIV, as a violation of the First Amendment. A group of fund-seeking organizations that wished to remain neutral regarding sex work challenged the provision, referred to as the Policy Requirement, fearing that adopting such a policy would alienate some international host governments, diminish the effectiveness of some programs by making it more difficult to work with sex workers, and require the organizations to censor privately funded discussions and publications regarding sex work in order to safeguard public funding.
The Court acknowledged that Congress may impose some restrictions on its funding of private programs, and that would-be recipients could decline the funding if they do not wish to comply with the restrictions. However, it emphasized that such restrictions cannot violate organizations' right to free speech in the First Amendment. Such violations occur when Congress seeks to improperly leverage funding to regulate speech outside the contours of the federal program rather than define the limits of the program. Here, the Policy Requirement forced organizations to denounce prostitution in arenas unrelated to the funding they receive for HIV prevention, and therefore violated the First Amendment.
Another provision of the Act specified that "no funds made available by the Act 'may be used to promote or advocate the legalization or practice of prostitution or sex trafficking' §7631(e)," which permissibly sought to define the limits of the program. The Court concluded that the addition of the Policy Requirement could not have served the same, redundant purpose, and thus impermissibly sought to regulate speech using the program's funding as an incentive.