Five American states now forbid discrimination on the grounds of sexual orientation, leading to the closure of a Catholic adoption agency after its board's decision that they could not square same-sex parenting with the teaching of Rome. Is there a way forward?

It's just five months since Catholic Charities of Boston, one of America's largest diocesan welfare agencies, finally brought a century-old chapter in its history to an end when it closed its adoption service, forced to do so, it said, because of a clash of Church and State.

The charity was responding to new laws passed in Massachusetts against discrimination on the grounds of sexual orientation, and their conflict with the Church's teaching on homosexuality. Yet in August, its sister agency in San Francisco claimed to have found a way to find adoptive parents, gay or heterosexual, for hard-to-place children without violating the Church's teaching on homosexuality.

The approach of government to adoption by same-sex couples has proved difficult for several Catholic agencies in the United States. In Boston, Governor Mitt Romney, a Mormon, and Cardinal Sean O'Malley sought an exemption that would have allowed Boston to exclude gay people as adoptive parents. But Bryan Hehir, chief executive of Catholic Charities of Boston, says that an exemption bill, "An Act protecting Religious Freedom", was "dead in the water" once the president and speaker of the Massachusetts legislature stated that there was no way that it would reach the statute books.

"For us," said Fr Hehir, "adoption, in terms of resources and money, was only a very small part of our work. But it was a very important, symbolic and highly visible part of our work."

For Fr Hehir, who will not be drawn on the policies of other agencies, the argument for withdrawing from the service is straightforward. "It's a basic question where you have to choose - on the one hand there is the language of the Vatican and [on the other] the language of the state, with us in the middle, and you have a head-on collision given the size of this agency and the role we play."

While the Boston agency will continue to offer some counselling to birth parents and carry out adoption follow-up assessments, in California things are very different. Although the San Francisco adoption office has also been closed, three staff members are being assigned to work with another charity, California Kids Connection, to help all potential adopters, including gay couples.

Brian Cahill, executive director of Catholic Charities of San Francisco, says that if this work eventually leads to a match between child and gay parent, "that is fine". His understanding of Vatican policy is that the agency cannot be "directly" involved in a placement involving same-sex couples and so San Francisco will not complete proceedings but refer parents to another agency to do that.

According to Archbishop George Niederauer of San Francisco, "remote cooperation" does not conflict with Church teaching. Some gay advocacy groups have praised San Francisco's new direction, even claiming that the number of children placed will be increased.

For 20 years Catholic Charities of Boston had been a contractor of adoption services for the Massachusetts authorities, but in that time it has placed just 13 children with same-sex couples, out of a total 720 placed. By comparison, Catholic Charities of San Francisco has placed five of the 136 children it has handled since 2000 with same-sex parents.

The Boston charity's expenditure budget is some US$38 million (£20.2m), of which $1m, reimbursed by the Massachusetts authorities, went on adoption. Just 15 of its 800 staff were engaged in adoption work, even though it placed 25 per cent of the state's children who were available for adoption. This compares with the charity in the Archdiocese of Chicago, which has an annual expenditure of more than $167m with $1.75m going on its adoption programme, and the one in San Francisco, which has a budget similar to that of Boston although it spends only $450,000 on adoption.

In 2005 Fr Hehir himself said that he believed that the Boston charity's policy was in accordance with Catholic moral teaching because of "material cooperation" whereby a greater good is served by a proportionate gain elsewhere. In December last year the 42-strong board of directors of the charity unanimously reaffirmed its policy. But by last March, the agency, as Fr Hehir said at the time, had "encountered a dilemma we cannot resolve".

The decision to end the adoption service has caused ructions within Catholic Charities itself: eight members of the Boston board resigned, stating that the decision "undermines our moral priority of helping vulnerable children find loving homes".

The decisions by the Boston and San Francisco charities can be traced to the statement in 2003 by the then Cardinal Ratzinger in his role as head of the Congregation for the Doctrine of the Faith. This stated that the adoption of children by gay people was against the Church's teaching and to allow it was to do

"violence" to those children "in the sense that their condition of dependency would be used to place them in an environment that is not conducive to human development".

In Boston's neighbour, Worcester, the admittedly far smaller Catholic Charities there has a different policy: it refers back same-sex potential adopters to the Commonwealth of Massachusetts' Department of Social Services with the suggestion that they be referred to a "more appropriate" agency.

Catherine Loeffler, the Worcester charity's executive director, talks of "discretion in carrying out our service in harmony with the Church's teaching". She adds: "People were not being discriminated against but referred back so that they could pursue their legal right [to adopt]. Thus, in this triad - the agency, the state and the would-be adopters - everyone would work toward their goals. We interpreted the spirit, not the letter of the law and went about it quietly, not seeking political confrontation."

For Timothy Muldoon, a theologian and director of Boston College's Church in the 21st Century Center, arguments about human rights will have no bearing in the argument. "I am aware that discussion around gay adoption is sometimes part of our discourse on civil rights," he says. "I can understand why this is but I think that in order to be responsible our focus has to be on what is good for the child and, by extension, what contributes to the common good of society of which they are a part. The equal rights discourse is insufficient to address the complexity of the issue. That narrative will not influence the argument whatsoever because it does not address questions as the Church sees them."

Muldoon, who is himself the adoptive father of two children, goes on: "There are also empirical questions to be asked: is a child brought up by gay people harmed? Is it harmful to the family and society? This is something that warrants empirical evidence which at the moment is lacking. The Church holds the position it does based on its understanding of the family from its biblical evidence.

"It would be a mistake to get lost in the question of gay adoption. What we should be talking about is what is less terrible for the child? Is it more terrible for a child, say, to live in an orphanage or to be raised in a family of, say, parents of a different race or who are gay? What is in the child's best interests? I don't see that this is something which we are addressing.

"Might our reflection on gay adoption be considered similarly to the Church's earlier acceptance of marriage, that is, as a pastoral necessity based on the overwhelming demand for homes that are better than those provided by institutions or, worse, the streets? Since there are gay parents it is better to learn from them than to ignore them a priori.

"Should teaching be influenced by experience of families with gay parents? The answer is ‘yes', it should be. This is when there is a need of empirical evidence. The more difficult question is, should this empirical evidence trump biblical and theological reflection? The answer here is ‘no'. I can't think of a situation where that has happened but I could see how such evidence should help to nuance biblical and theological reflection because that is what it has done in the past."

However, the Child Welfare League of America, the advocacy umbrella group representing 900 children's charities that opposes the Church's stance, has (as have other opponents) quoted several studies. It also quotes the fact that between 200,000 and 400,000 children are brought up by same-sex couples in the United States. The research appears to show that children growing up in same-sex households fare as well emotionally, cognitively, socially and sexually as do those whose parents are heterosexual.

Fr Hehir contends, though, that these studies remain open to argument and, anyway, when his agency made use of gay adopters the studies did not influence it. "Decisions were made on a case-to-case basis with the interests of each child in mind," he says.

Timothy Muldoon also raises his doubts: "What we are talking about are sociological studies and as everyone knows they are always open to interpretation. They are never free from error. So when I say that such evidence should not trump biblical and theological reflection it is because [these studies] do not have the weight of evidence you find in the ‘hard' sciences."

The Church's teaching may be unequivocal but the experience of Boston and San Francisco, at least, shows that its interpretation need not be.

* Terry Philpot is editor (with Anthony Douglas) of Changing Families, Changing Times: Adoption Today.