This illustrates one of the program's problems. Splitting up funding among federal, state, local, and private agencies makes every activity seem artificially cheap to everyone, though collectively they may be spending far more than any benefits. The expense doesn't diminish if charitable groups support the program. Of course Habitat for Humanity backs AmeriCorps. That doesn't justify AmeriCorps, however.
Organizations are likely to value less and consequently use less well largely free labor.
People naturally prize most what they must pay for. Moreover, AmeriCorps doesn't create resources. It reallocates them. Those same 1,000 Habitat volunteers could have been funded by a private foundation, single wealthy benefactor, or broad public appeal. The fact that it is easier to file a grant proposal with one tax-supported agency than to raise the money from more numerous private sources doesn't mean that it is better to do so.