I would have less of a problem (mind you, not no problem) if "Faith-Based Initiatives" didn't actually mean "Christian-Based Initiatives".

I still think that excluding explicitly religious organizations from the handouts is the appropriate thing. The US Government has always given money to charities that have a religious affiliation; it's just that they were required to abide by some rules that basically prevented them from proselytizing. This whole notion of "Faith-Based Initiatives" is really just a way to undermine those restrictions. (It does also allow a more widespread distribution of that money, since most neighborhood churches probably don't have the time to deal with those sorts of regulations, even if they're happy to comply with the restrictions in general, but I don't think that that sort of distribution is necessarily more effective.)