Every religious faith by nature requires that its adherents act as people of faith in public. And that means that charities, educational institutions, hospitals, retirement homes, and a host of other institutions connected with particular religions must run on religious principles. And this goes against the secularist prejudice that all jobs are merely matters of technical competence, requiring no special moral requirements, save by intolerant haters who should be banned.
Moreover, faiths within our Western tradition are not quietist. They are not about separation from the world but, rather, about reaching out to evangelize the world, including by reaching out in education and charity work.
The secular state would not miss religious charities were they to disappear. Social democracy rests on the presumption that the state can provide what people need, and that various “particularist” viewpoints get in the way of political unity. But religions in the Western tradition, with very few exceptions (e.g., the Amish, who already are becoming problematic for the secular state in areas where there numbers are significant) cannot be put on the reservation as has been done with so many native Americans, whose cultures have been (at times quite brutally) marginalized and left to die. The attempt will be resisted because its success means cultural death, repression of a crucial part of the human personality, and destruction of an essential defender and substantial embodiment of human liberty—communities of transcendent purpose and meaning.