It's so good to see this conversation has been so civil and not degraded into a racist bigoted free for all.
IMHO If an organization is a Catholic adoption agency then they should place the kids with Catholic's, if Muslim then the kid should be placed with Muslims, if public than the kids should be placed with whatever family they can get. Unfortunate fact is if it goes to the SCOTUS( and it probably will) it will most likely be labeled discrimination and therefore unconstitutional due to the current climate in the USA. This of course could lead to less adoptions and more welfare mothers. I can see where someone might not want to give up a daughter if they knew that the adoptive family might be Muslim and force her to cover herself from head to toe just because she's a woman. A Jew might not want a Muslim family or a Muslim might not want a Jewish family and a Christian might not want an atheist family. Hell a Christian baker can't even turn down making a gay wedding cake so I have little hope that religious adoption agency's will be able to continue unobstructed on the grounds of religious freedom.