The concrete occasion for the distinction between the latent and the manifest church comes with the encounter of groups outside the organized churches who show the power of the New Being in an impressive way. There are youth alliances, friendship groups, educational, artistic, and political movements, and, even more obviously, individuals without any visible relation to each other in whom the Spiritual Presence's impact is felt, although they are indifferent or hostile to all overt expressions of religion.By distinguishing between the latent and manifest church (and this is not to be confused with the visible and invisible church), Tillich makes it possible to acknowledge the infinite width of human efforts for the good. In groups where the New Being is present - any group - the church is present, even if only in a latent way. It is latent because such a group is not consciously aware of expressing the love and faith of Jesus as the Christ. It is expressing that love, but it is not yet aware that such love is rooted in Christ.
Systematic Theology III, 153.
Of course this notion also becomes the ground for a re-evaluation of all religions. As far as they express the presence of the New Being they are part of the Church.
This also does mean that although the Spiritual Presence is manifest in the the Christian churches, if a Church community does not express the New being, it is not in the proper sense of the word church, even latently.