Funding for the Klan?

Assume that the Ku Klux Klan opens a homeless shelter.  The shelter is open to all races.  Hiring is also open to all races, but prospective employees must affirm their belief in the racial superiority of whites. After two years of operation, there have been no complaints from shelter residents, who are not aware that the shelter is operated by the Klan.  (The Klan operates the shelter under another name to avoid controversy.)  Outside experts confirm that the shelter is serving the public well. 

For those who believe (as I do) that a religious organization should be able to hire employees who share the beliefs underlying the organization's mission without jeopardizing the organization's public funding, here's the question: should the Klan, with its racist-only hiring requirements, be eligible for public funding?

UPDATE: I believe that the Klan should be eligible under these circumstances, as does Jonathan Watson, though he adds some limitations based on what the funding allows the organization to do.