[goodpoint]

> what's wrong with funding homeless shelters or schools?

...that such organization replace the government in doing such services and they obviously run without democratic oversight

> If I decide to volunteer at a soup kitchen, am I also "doing government type stuff without democratic oversight"?

Do you have the power to control how millions are spent? To direct thousands of employees?

No - then it's the opposite of undemocratic. It's actually very good for society.