A Georgia program that uses tax credits to fund private-school scholarships is benefiting scores of parochial academies that prohibit gay, lesbian, and bisexual students from attending, according to The New York Times.

The Southern Education Foundation, which issued a report on the matter last month, said as many as a third of the schools in the scholarship program explicitly bar gays or hold that homosexuality is immoral or a sin. State funds are being used to “punish, denounce and even demonize students in the name of religion,” said Steve Suitts, the foundation’s vice president.

The program allows individuals and corporations to claim tax breaks on donations to nonprofit organizations that in turn give the money to private schools. Supporters say it offers poor children an opportunity to attend private institutions, but critics maintain it masks the use of government money to support religious and other schools whose policies diverge from state standards.