"As we come into the holiday season ... we must always remember there are people who hurt in our society," Bush said. "And we always remember, with blessings some [have] the responsibility to help those in need."
Bush's announcement came at So Others May Eat, a 30-year-old interfaith shelter and soup kitchen in Washington, two days before Thanksgiving Day. He said the federal government had a role in ensuring that charitable organizations thrive.
"It is a part of our government's desire to support the armies of compassion," Bush said, adding he wanted government to stand "side by side" with groups such as SOME.
The grants, which will be administered through the U.S. Department of Housing and Urban Development, will help homeless people find emergency shelter, transitional housing and a permanent home. The funding will go to state and local governments and non-profit groups in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam.
More than 2,500 projects will assist more than 200,000 families, the agency said. More than 1,300 projects will serve homeless veterans, and more than 400 projects -- awarded a total of $133 million -- will be operated by faith-based organizations.
Bush also turned his attention to the decline in charitable donations to non-Sept. 11 nonprofit groups.
A survey by Independent Sector, a coalition of leading non-profits and corporations, found 48 percent of Americans would reduce their charitable donations in the next six months as the economic downturn continues. The survey also found 26 percent of Americans would either stop or reduce the size of their donations to non-Sept. 11 charities due to their support of a Sept. 11 cause.
On Sept. 11, terrorists commandeered four commercial airliners and crashed two into the World Trade Center in New York destroying the twin towers. A third crashed into the Pentagon, near Washington, and the fourth crashed in rural Pennsylvania. Some 4,000 people were killed.
"I have been disturbed by reports that charitable giving has dropped off," Bush said. "I hope Americans will not substitute the gifts they've given ... in the aftermath of Sept. 11 for neighborhood groups such as SOME, or mentoring programs, or programs that understand that when you change a person's heart, you can change their life for the better."
Bush urged Congress to pass his faith-based Armies of Compassion legislation that expands tax incentives for charitable donations, provides enhanced deductions for farmers and restaurants that donate to food banks and allows 84 million taxpayers who do not itemize to deduct their charity contributions.
It also provides expanded access to federal dollars by faith-based organizations that provide social service programs such as drug and mental health treatment, shelter and day care programs.
"It is a wise use of the tax code to encourage more charitable giving to programs that are positively affecting people's lives. And I think we can get a bill out of Congress to do just that," Bush said.
He added: "And so why doesn't Congress, in order to help fight poverty and fight hopelessness, do something smart with legislation and bring it to my desk so I can sign it before Christmas? It makes a lot of sense."
The faith-based initiative, which seeks to allow religious groups to compete with secular ones for federal taxpayer dollars to run social programs, has attracted criticism.
Many Democrats have said the plan violates the constitutional firewall between church and state and encourages government intrusion into church affairs.
Conservative religious leaders such as Pat Robertson, many of whom supported Bush during last year's election campaign, expressed concern organizations such as Elijah Mohammed's Nation of Islam might apply for and receive federal monies.
They also echoed the concern of many liberals that the initiative might provide a license for government interference in church affairs.
Bush's initiative also has supporters on both sides of the aisle. Sen. Rick Santorum, R-Pa., and Sen. Joseph Lieberman, D-Conn., introduced the bill in March that was stalled as Congress dealt with the more immediate legislative issues surrounding the Sept. 11 attacks.
Under an executive order from Bush, the White House Office of Faith-Based and Community Initiatives earlier this year directed five federal agencies to conduct reviews of all their regulations to determine what barriers existed for churches and religious groups that want to compete with secular organizations for federal cash.
Offices within the Justice Department, the Department of Health and Human Services, HUD, and the Education and Labor Departments have been set up and charged over the next 180 days with identifying and changing federal regulations that bar or might deter religious groups from receiving government funds.