This is the best explanation I've heard from Kris Rust, former chair of the Steel City Stonewall Democrats:
“Philadelphia model – The biggest improvement in terms of BGLT rights, as I see it, is not writing into law that religious organizations who receive funding are exempt from the ordinance. Since the ordinance is silent on the funding question, that leaves open the possibility of the executive writing compliance with the ordinance into contracts.”
So while version #1 would have required all religious organizations to comply (obviously, ideal) and version #2 would exempt all religious organizations (obviously, not good), version #3 sidesteps the funding issue which leaves open the possibility of addressing it later.
So that seems better.