The coalition, headed by the National Gay and Lesbian Task Force and the progressive Equal Partners in Faith, said it is concerned homosexuals and predominantly gay churches could be denied funding or services because of sexual orientation.
It also said it was concerned tax dollars could be used by religious-based programs that seek to change the sexual orientation of gays and lesbians.
``Could our tax dollars be used to fund and support the religious conversion therapy of groups like Exodus or Coral Ridge Ministries?'' asked Steven Baines, a gay Southern Baptist minister and executive coordinator of Equal Partners in Faith.
Sexual orientation and federal dollars have already clashed in the past. Last year, the Kentucky Baptist Children's Home fired a lesbian staffer, even though the charity received at least $13 million in tax dollars.
Since Bush unveiled his plan last month, civil liberties groups have said the proposal tears down the wall of separation between church and state and threatens to overrun private charities with government red tape.
Baines and Elizabeth Toledo, executive director of the Task Force, share those concerns, but they are even more worried that groups that do not share Bush's conservative views on homosexuality would be shut out altogether.
``I absolutely don't think religious institutions should be outside the pool of institutions that receive federal funds,'' Toledo said at a luncheon here of the National Religious Leadership Roundtable. ``But anybody who receives federal funds for the delivery of social services needs to have a nondiscrimination policy in place.''
As with any government program, the devil lies in the details, and few have been fleshed out in Bush's proposal. Bush has said he will work with Congress on addressing concerns and vowed that nondiscrimination will be a top priority.
Making the matter even more murky is an unclear legal precedent. Several states, such as New Jersey, have had successful faith-based programs in place for years with few problems. But last year the U.S. Supreme Court ruled that the Boy Scouts, as a private organization, can exclude gay leaders and members, although the case did not involve federal funds.
Catholics and Lutherans have received millions of federal dollars for years, and gay members of both churches supported those programs and even increased funding -- as long as they are not excluded.
``None of this has flesh on it yet,'' said Bob Miailovich, a former president of Dignity USA, a group of gay Catholics. ``But we want to be sure that whatever is set up has appropriate safeguards, controls and protections.''
