As you have probably heard, President George W. Bush has budgeted money for federal grants to religious charities. I believe it's being called "faith based initiatives." And while I don't doubt that many who administrate such charities are thrilled with the thought of being given huge increases to their budgets, I cannot help but think that it is a very bad idea.
For starters, it is closer than I like to be to federal establishment of religion. We still have a great depth of religious conviction here in America precisely BECAUSE we have kept spiritual and temporal authority separated. It was the commingling of spiritual and temporal authority which led to the huge religious conflicts that have left Europeans largely disenchanted with faith.
Also, with federal money comes federal strings and federal hoops. The reason that religious charities are so much more effective than welfare agencies is because they are able to operate as they see fit. That autonomy will disappear once they have accepted federal aid. Perhaps not overnight, but it will go, along with any religious guidance, which will be overruled by federal regulation. Nor will it matter how much or how little aid any charity accepts. Hillsdale College has had to turn away not merely federal aid to the school itself, but also any STUDENTS who receive federal aid, in order to avoid the burdens imposed by federal regulation.
But the most important reasons are moral, particularly for Christians.
Consider Christ's teachings on taxes. "Render therefore to Caesar the things that are Caesar's, and to God the things that are God's." (Mat 22:21) The two are obviously meant to be very much separate. Any charity applying for a federal grant would be asking Caesar to render that which is Caesar's unto God.
Christians should not expect those who are not saved to live up to our standards. But taxes are collected from everyone, so we would, in essence, be using the law to force everyone to live up to a Christian standard of charity.
Then consider how taxes are collected. Very few people pay taxes in order to promote a higher good. No, nearly everyone pays taxes because if we do not, men with guns will come after us and DEMAND the taxes. And if we do not comply, those men with guns will use whatever coercion they must to force compliance, even to taking all that we own, or even killing us.
Finally, if the agencies disbursing such grants are as efficient as, say, WIC or Food Stamps, then it is safe to assume that about 2/3 of the budget will go to overhead, and 1/3 will actually be paid out as grants. Any private charity with such overhead would be castigated for its outrageous wastefulness.
In sum, if a Christian charity accepts a federal grant, it is the moral equivalent of your Church hiring a mugger who steals equally from believers of all faiths (and none!), and keeps 2/3 for himself before he passes the rest to the pastor. Any Christian minister who suggested such a course of action would deserve to be fired and defrocked. Unfortunately, it will be accepted when the mugger is the taxman.