The churches were doing work that the government otherwise would have been obligated to do: those families had to get food and shelter from somewhere. I'm just guessing here, but isn't the Red Cross a non-profit as well? If so, I don't see how you could favor reimbursing one and not the other... on either side of the issue.
That said, this is, in the strict sense, not costing the government money. Rather, the government is choosing to accept a burden that the churches took upon themselves. Since some churches will surely turn the money down, the churches will still have saved tax dollars. Furthermore, the churches will be pleased with the government's recognition of their work.
This doesn't look like an establishment clause violation either, but I would have to see how carefully the money was earmarked before I would know for sure...
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The peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error. ~John Stuart Mill, On Liberty
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