Catholic Charities of the Archdiocese of Chicago will lay off 300 employees while cutting numerous government contracts in response to an “increasingly complex and uncertain government funding environment,” the group announced Thursday.
The charity plans to end 75 government contracts as of July 1 as part of a new strategic plan that Catholic Charities says will change its business model to be less reliant on public funding.
The contracts, which fund 12% of its budget, cover child care, youth programs, behavioral health counseling, elder care, adult protection, veterans services and call centers. The group declined to share the names of the contracts.
“After careful consideration and discussion, we have decided to reduce our presence as a government contractor in order to increase the time, attention and resources we devote to the services we are uniquely suited to provide as a private humanitarian organization,” Sally Blount, president and CEO of Catholic Charities, said in a news release.
“Over the past decade, management of the government services sector has become more complex and funding has not kept pace with high inflation rates. This means that many contracts no longer cover their direct costs, let alone rising administration costs,” he said.
Blount said the organization will continue to serve the same populations “and provide many of the same services, but will do so with greater reliance on private funding.”
The organization plans to pilot new programs to increase services for low-income mothers and seniors in Cook and Lake counties and expand programs in Chicago’s South, West and Southwest Sides.
Catholic Charities’ business model relies heavily on government money. The majority of its income (73%) came from government fees and grants in 2023, according to its annual report. reportContributions and legacies accounted for 22%.
Catholic Charities will reduce its workforce by approximately 300 employees over the next few months: 280 working on the affected government contracts and 20 in related administrative areas. After that, the workforce will remain at nearly 1,000.
Affected employees will receive severance benefits and assistance with job searches at Catholic Charities sister organizations, including Mercy Home, Misericordia and Maryville.
Catholic Charities said the new strategic plan was the result of a yearlong effort with advice from the Bridgespan Group. Blount initiated the new direction three years ago, when she was named CEO, “to strengthen Catholic Charities’ governance, operations and financial oversight,” the group said in the statement.
Board Chairman Michael Monticello said in the statement that the group realized over the past year “that if we are to increase our impact in the years ahead, we must sharpen our strategic focus while simultaneously reducing the time our staff spends navigating an increasingly complex and uncertain government funding environment.”
Cardinal Blase Cupich praised the board’s leadership for undertaking “an important strategic exercise, one that all major organizations should do regularly.”
“I commend them for their courage, vision and commitment to deepening the Church’s impact on the most vulnerable in the region,” Cupich said in the statement.
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