Catholic Charities of the Archdiocese of Chicago will trim nearly 25% of its workforce in the coming months as leaders prepare to exit from 75 government contracts that they say have become too expensive to administer. The move will trim approximately 300 of the 1,300 jobs and take effect starting July 1.
The decision was prompted by what leaders said was a financial analysis that showed funding hasn’t kept up with inflationary increases in the cost of providing services under the contracts. “This means that many contracts no longer cover their direct costs, much less the increased costs of administering them,” Sally Blount, president and CEO, told The NonProfit Times.
The contracts, collectively valued at $23.5 million, account for about 15% of the charity’s projected revenue from all government sources ($160 million). All of these government sources together account for 80% of a total operating budget of $200 million. The analysis concluded that “reducing our government footprint would actually free up funding for other work that is more mission-aligned,” Blount said.
Even after the current contracts end, government funding will still account for upwards of two-thirds of annual revenue. However, leaders have clearly signaled plans to reduce the current reliance on government support. “Over the past year, we have come to understand that if we want to increase our impact over 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,” said Board Chair Michael Monticello.
Services covered under the contracts being eliminated include childcare and youth programs, behavioral health counseling, senior care, adult protection, veteran services, and call centers. To minimize disruptions to those who receive these services, leaders of the Catholic Charities affiliate said they’ll work closely with government and peer agencies and set up special helplines for those impacted.
Employees whose jobs are being cut will be given advance notice, severance benefits, and job placement assistance with opportunities to apply for dozens of other open positions within the organization and dozens more with sister organizations in the Chicago metro area. “Many peer providers have also reached out about hiring our departing staff,” Blount said.
Leaders said they’ll use the money saved to pilot new programs and expand existing services for low-income mothers, seniors, and others in and around Chicago. The organization reports serving more than 350,000 free meals annually and resettling 20,000 migrants during the past 18 months, in which it will continue investing. “Catholic Charities remains committed to helping resettle migrants” and will “collaborate with community and government partners to mobilize and coordinate resources as quickly as possible when crises arise such as the recent influx of migrants in the Chicago area,” said Blount.
