Or, you know, churches.
The idea that the tax subsidy is justified by the fact that subsidized charities are displacing costs that would otherwise need to be born by the government would probably be more supportable if:
(1) tax subsidized charities didn't perform functions that the government is Constitutionally barred from performing (viewing the subsidy as an alternative means of performing government functions, would make subsidizing "charities" to do such barred tasks a way for government to evade its Constitutional limits), and
(2) the tax subsidy were the same for all donors (e.g., a fixed proportion credit) since each dollar given would displace the same amount of government funds no matter who gives it, rather than escalating for wealthier donors.
Cut the tax break, fine, but then we need the government to intervene and provide assistance for citizens.