BSA made a decision at the beginning of this year to end its ban on gay members, but still bars gay adults from taking on leadership roles.
McGrath, believed to be the first Scoutmaster ousted over his sexuality, was banned by the Scouts last month when a story by NBC on his troop's inclusiveness publicly outed the Scoutmaster, despite his having been up front about his sexuality with parents and the church who hosts the troop.
But Rainier Beach Methodist stood behind McGrath.
BSA spokesman Deron Smith said, “Because the church no longer agrees to the terms of the BSA chartered organization agreement, which includes following BSA policies, it is no longer authorized to offer the Scouting program."
In a statement to Scouts for Equality, Reverend Monica Corsaro said, “Based on our religious principles, we will continue to act as an autonomous church that does not discriminate. We will continue to have our troop meetings here, every Thursday night, with business as usual.”
McGrath echoed Monday that even if it can't use the Boy Scouts name, he will continue to participate in the church's youth program.
“The Boy Scouts’ decisions only serve to hurt a group of boys who need the values and leadership of someone like Scoutmaster McGrath,” Zach Wahls, Executive Director of Scouts for Equality, said in a statement to the Huffington Post. “Unfortunately, the BSA’s decision calls into question its commitment to leadership and values by perpetuating an outmoded policy rooted in fear and discrimination. History will show that today’s announcement is a self-inflicted wound.”