Even if Constitutional, direct government funding can threaten the integrity and effectiveness of faith-based organizations. The potential hazards are manifold, including organizational dependency, loss of mission focus, and watered-down programs stripped of essential religious content.
Tax credits are another approach worthy of consideration.
A charitable tax credit would make it easier for people to give money to private charities. As the federal government reduces its involvement in welfare policy, it is important that the number of volunteers actively serving charitable organizations increase. While policy makers should lead by example, volunteering their own time and lending their own prestige to effective private charities, there are two additional ways in which public policy reforms would enable people to more actively participate in the good work going on in their own communities. Volunteer tax credits would recognize the de facto staff of private charitable organizations who provide essential service to the nation's nonprofits. Businesses could afford to give time off to employees for volunteer work and to count the wages paid for that time against their own tax liability.