"Free Inquiry" on "Separation of Church and State"

From the same page:

"Separation of church and state. The United States needs to adhere to the First Amendment. We call upon President Obama to rise above his campaign rhetoric on this issue and end public support for faith-based charities as a violation of the First Amendment."

I had no clue that this was that widespread of a misconception.  Anyone want to explain to me how supporting a 'faith-based charity' 'prohibits the free exercise of [religion]'?  I'd also like to see what organizations the government is supporting, and how they are doing that.  I suppose they have ground if they're supported in a tax law of some sort, although that's stretching the definition of 'Congress shall make no law respecting an establishment of religion'. 

Unfortunately, most people just have a vague idea of what the First Amendment really says, and what it relates to.  And most of these vague ideas are influenced by people who are saying that 'separation of church and state' is in the Constitution.  If the blind lead the blind, will they not both fall into a ditch?

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