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* Crain’s…
Catholic Charities of the Archdiocese of Chicago will lay off 300 employees as it cuts government contracts.
On March 7, the organization announced the job cuts and plans to end 75 government contracts starting in July due to what board Chair Michael Monticello described as an “increasingly complex and uncertain government funding environment.”
The charity expects to conduct the layoffs over the next few months — impacting 280 staff whose work is related to government contracts and 20 who work in related administrative areas.
The nonprofit said the contracts cover services like child care, youth programs, behavioral health counseling and senior care. According to its 2023 impact report, government fees and grants make up the bulk — 73% — of its revenue.
* This is not happening in a vaccuum. From December…
Heartland Alliance, a Chicago-based social service organization that dates from 1888, is shutting down its division that operates affordable housing developments in Chicago and Wisconsin after laying off 65 workers.
Ed Stellon, the group’s chief external affairs officer, said the nonprofit is “managing a very severe cash flow challenge.”
He said the layoffs were among 125 workers who got temporary furloughs in recent months. “It’s just a terrible situation for them,” Stellon said.
More on Heartland…
Chicago social services nonprofit Heartland Alliance is working to spin off its health care division and other units and then plans to dissolve itself amid financial troubles.
Discussions about breaking off Heartland Alliance Health and other segments of the parent organization began in fall 2023, when severe financial challenges surfaced, Ed Stellon, chief external affairs officer, said in a statement to Crain’s. […]
Aside from Heartland Alliance Health, units being considered for separation include Heartland Human Care Services, Heartland Alliance International and a program within Heartland Alliance called National Immigrant Justice Center, according to Stellon. Heartland Housing, which provided affordable housing services, is shutting down. […]
Stellon pointed to the destabilizing effect on health care organizations of the COVID-19 pandemic and the inflation wave that followed. A growing demand for services, combined with rising costs on everything from labor to equipment and supplies, put pressure on the already-thin margins providers typically face. The situation for Heartland Alliance Health worsened once migrants seeking asylum began arriving in Chicago last year, further stretching its resources.
Dozens of employees are taking a 20% pay cut at Alivio Medical Center, a key health care provider for migrants and asylum seekers on the West Side.
Those getting their hours reduced from 40 to 32 a week range from executives to medical assistants, nurses and front-desk staff, spokeswoman Terri Rivera said in a recent interview. She has since left Alivio. Doctors were spared from the cut so they can take care of more patients to generate more revenue, Rivera said, though they could be trying to do so with less help. For example, she said a medical assistant now might share their time between two doctors instead of one. […]
Rivera said a host of factors fueled the furloughs, including supplies becoming more expensive, COVID-19 money that is running out and treating fewer patients. Alivio’s CEO Esther Corpuz was not available for an interview, nor was anyone who could discuss the health center’s financials.
But Igoe said information Alivio shared with the union shows that patient visits have increased since at least the summer and as of November surpassed 6,000 visits that month.
* Sun-Times last month…
Two of Chicago’s largest medical groups laid off employees Thursday, citing money troubles.
University of Chicago Medical Center officials say the hospital is facing the “same challenges” other health systems have, which led to the 180 layoffs.
“The fact is many outside pressures including higher supply and labor costs are converging as healthcare delivery rapidly evolves,” president Tom Jackiewicz and Mark Anderson, executive vice president of medical affairs, wrote in a memo to employees on Thursday. “Additionally, we grew our staff to address the pandemic, which was necessary for that moment but cannot be maintained.”
* Last September…
Illinois Times has learned Memorial Health’s recently announced layoffs totaled about 300 – with 120 involving people in leadership positions – and that the cuts will save the Springfield-based health care system an estimated $40 million a year.
The new information, expanding on an earlier statement from the nonprofit system that said there were “several hundred” layoffs, came from Memorial Health’s president and chief executive officer, Ed Curtis. He told Illinois Times in an interview that the cuts were part of “tough choices” to sustain the nonprofit system through an unprecedented nationwide staffing shortage that sent payroll costs soaring.
Curtis said the cuts, mostly to administrative and support positions and mostly avoiding frontline care staff, were a “last resort” after other cost-trimming measures. They were all needed to preserve core services and help return the system to “break-even” by fall 2024, he said.
* Last June…
St. Margaret’s Health is shuttering its 120-year-old Spring Valley hospital Friday, just months after the abrupt closure of its hospital in nearby Peru.
SMH president and CEO Tim Muntz pinned the blame solely on “one bank’s actions on June 5, 2023.” He told the Illinois Health Facilities and Services Review Board that the hospital’s primary lender is cutting off access to their funds.
* Last May…
On Nov. 1, 2022, the CEO of the only hospital in Logan County — Lincoln Memorial — announced in a news release that the three maternity suites dedicated to obstetrical care at the 25-bed hospital would close the following month, “ending labor and delivery services at the nonprofit hospital.”
After the Dec. 31 closure, the release said, then-current Memorial Health patients could coordinate with the two OB-GYN doctors who delivered babies at Lincoln Memorial to “choose another hospital” for their delivery.
On Jan. 29, a mother delivered a baby on an Interstate 55 off-ramp near Elkhart.
According to 911 call audio obtained by WGLT, the mother and the driver of the vehicle were heading from Lincoln to Springfield, likely toward Memorial Health’s flagship hospital in the state capital.
* Full Catholic Charities press release…
Catholic Charities of the Archdiocese of Chicago – the region’s largest private human services provider – announces the launch of its Vision 2030 strategic plan and, with that, several decisions designed to realign its services for greater impact over the years ahead.
This week, Catholic Charities is notifying government funders that, beginning July 1, it will transition out of 75 government contracts that together fund 12 percent of its current operating budget.
“After careful evaluation and discussion, we have decided to reduce our footprint as a government contractor – in order to increase the time, attention and resources we devote to the services we are uniquely equipped to offer as a private humanitarian organization,” said Sally Blount, President and CEO of Catholic Charities. “Over the last decade, navigating the government services sector has grown more complex, and funding has not kept up with the high rates of inflation. That means that many contracts no longer cover their direct costs, much less the increasing costs of administering them.”
“We remain steadfast in our founding mission to serve people in need across Chicago, Cook and Lake counties – regardless of their faith, ethnicity, nationality, gender, or race – while adapting to the changing needs of our times,” said Blount. “Going forward, Catholic Charities will continue to serve the same populations and provide many of the same services but will do so with greater reliance on private funding.”
Catholic Charities will work closely with government and peer partners to minimize disruptions in service during the contract transitions, including setting up special helplines for the people affected by the changes. The contracts cover various services, from childcare and youth programs to behavioral health counseling, senior care, adult protection, veteran services, and call centers.
This announcement comes after a comprehensive, year-long, strategic planning effort undertaken by the Board of Directors and leadership in partnership with nonprofit expert The Bridgespan Group, thanks to the funding of a long-time donor. This planning came as the final step in a more than three-year journey, undertaken by the Board after Blount was recruited to be CEO, to strengthen Catholic Charities’ governance, operations, and financial oversight.
“As a humanitarian organization that served non-stop during the COVID-19 pandemic, this was an important time for our Board and staff to reflect, learn, and re-imagine together,” said Michael Monticello, Board Chair. “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.”
This decision means that over the coming months, Catholic Charities will reduce its staff by roughly 300 employees: 280 who work across the affected government contracts and 20 in related administrative areas.
“We announce these personnel decisions with a heavy heart and profound gratitude and respect for the contributions and many years of service given by each of these team members,” said Blount. “We will support them through advance notice, severance benefits, and assistance with job searches, including applying for open positions within our organization and our sister organizations (Mercy Home, Misericordia, and Maryville) and with our peer providers who will take over these contracts.”
Caring for the nearly 1,000 staff who will continue to provide essential programs and services is also a top priority. “Carefully balancing the needs of the people we are called and honored to serve with the needs of the amazing employees who serve them is critical to our mission,” said Blount.
“Our Board and staff remain committed to serving as our region’s cornerstone partner, employer, and provider. We will continue to operate at a significant scale, between $175-200 million annually, and provide essential programs and services across our three impact areas – immediate access to basic needs, children and family services, and seniors and housing – while preparing for the future needs of our region,” said Monticello.
Under the new strategic plan, Catholic Charities will pilot several new programs and expansions designed to increase services for low-income mothers and seniors across Cook and Lake counties. Through the Church’s parish network, it will expand its community-based footprint on Chicago’s south, west, and southwest sides. The Board also recently voted to open a new community center in the southwest suburb of Summit in Fall 2025 and to fund a standing Rapid Response Team – formalizing the crisis response capabilities created during the COVID-19 pandemic that have been further honed by collaborating with community and government partners to resettle 20,000 migrants over the past 18 months.
“Over the past four years, Catholic Charities’ Board and leadership have undertaken an important strategic exercise – one that all organizations of substance must regularly do,” said Cardinal Blase J. Cupich, Archbishop of Chicago. “I laud them for their courage, vision and commitment to deepening the Church’s impact on behalf of the region’s most vulnerable.”
posted by Rich Miller
Monday, Mar 11, 24 @ 11:09 am
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We’re going to need a solution that is bigger than propping up non-profits and charities.
Comment by Candy Dogood Monday, Mar 11, 24 @ 11:38 am
A quick look at the Chicago Archdiocese 990s show the priorities
2022- Name_redacted (Sr. Vice President) $307,691
2021- Name_redacted (General Counsel) $219,45
(same person)
An almost 40% yearly salary increase
2022- Name_redacted (Cfo) $240,707
2021- Name_redacted (Cfo) $219,682
(same person)
An approx 10% salary increase
In total - 40.5% of their total revenue goes to internal salaries.
And so on down the list of compensation. Maybe they should just hire the people they are supposed to help?
Similarly, for the past few years their assets have been increasing, and their liabilities have been decreasing - leading to a current net asset position of about $110M in the last fiscal year.
One Hundred and Ten Million Dollars.
I doubt their 2023 990s will show a different pattern.
…Their first response is to cut programs and services.
Comment by TheInvisibleMan Monday, Mar 11, 24 @ 11:49 am
It looks like the Catholic Charities see a possible public budget cut train heading towards them. They are moving off the tracks.
Comment by DuPage Monday, Mar 11, 24 @ 12:01 pm
Regarding SMHC, I said at the time that instead of laying off 300 employees, they should just eliminate their CEO. Based on what he’s reputedly paid, it’s the same amount of money. Executive compensation is ridiculously out of hand, certainly not just in health care.
Comment by Excessively Rabid Monday, Mar 11, 24 @ 12:35 pm
=== Maybe they should just hire the people they are supposed to help? ===
To be General Counsel or CFO?
Comment by Hannibal Lecter Monday, Mar 11, 24 @ 1:54 pm
“To be General Counsel or CFO?”
Or any of the half dozen vice presidents.
Or the dozens of ‘directors’.
Take your pick.
Comment by TheInvisibleMan Monday, Mar 11, 24 @ 1:56 pm
Further evidence of the need to reopen GATA and other contracting statutes as Rep. Avelar and Sen. Halpin are advocating for. It is causing real issues for important providers
Comment by CornAl DoGooder Monday, Mar 11, 24 @ 2:00 pm
During this migrant crisis, I am surprised to no one with endless pockets associated with the governor’s office has offered to help some of these non-profits during this unique, not-in-the-state’s-normal-duties situation.
I get not using his wallet to plug every budget hole, but this seems like a perfect opportunity.
Comment by SWSider Monday, Mar 11, 24 @ 2:28 pm
If Chicago’s Labor Peace Agreement ordinance gets implemented — the current language is poorly drafted and needs revision, after which the nonprofits may sue — expect a further deterioration of the safety net.
Comment by Floor Door Monday, Mar 11, 24 @ 2:49 pm
=== A quick look at the Chicago Archdiocese 990s show the priorities … 40.5% of their total revenue goes to internal salaries. ===
@TheInvisibleMan, the Archdiocese is not the same as Catholic Charities. The salary figures make sense. If you’re concerned about a senior VP making $307K, what do you think the going rates are for good, high-level execs at large organizations? And how many staff do you think the Archdiocese could avoid laying off if it brought the top salaries down to those rates and put the remainder into Catholic Charities?
And this is all assuming that good execs don’t save the org money overall through solid management and fundraising — and by staying at the org long-term instead of frequently taking better paying jobs and creating vacancies.
Comment by DefinitionOfInsanity Monday, Mar 11, 24 @ 3:04 pm
I’m wondering how many of these problems are related to the end of easy federal covid funds?
Comment by Friendly Bob Adams Monday, Mar 11, 24 @ 3:07 pm
“the Archdiocese is not the same as Catholic Charities.”
Every figure I presented comes directly from the Federal 990, with the operational name of ‘Catholic Charities of the Archdiocese of Chicago’. That’s not me making something up or confusing the agencies - that’s what they printed on their own federal filing.
Every Catholic Charities is under the umbrella of its local archdiocese. The Catholic Charities in Joliet, is under the umbrella of The Joliet Diocese.
Comment by TheInvisibleMan Monday, Mar 11, 24 @ 3:26 pm
===If you’re concerned about a senior VP making $307K, what do you think the going rates are for good, high-level execs at large organizations?===
What’s the Chief of Staff to the President of the United States making, again?
You know, just for comparison?
Though JB thought public employees salaries so impoverished his staff he’s paying the gate keepers of his bubble out of his own pocket because their six figure public salary isn’t enough.
I’m all for paying talent, but if that’s the salary you think you need to attract talent, oh boy, do we need to increase what we’re paying our actual public servants.
Comment by Candy Dogood Monday, Mar 11, 24 @ 3:59 pm
@TheInvisibleMan. What do you think the going rate is for CFOs who manage more than $100 million in annual revenue? This is the market that Catholic Charities and any other community-based service provider, is operating in. Are you advocating that human service organizations hire less qualified people to handle funding and financial accountability at this level of complexity? You need to think beyond the knee jerk reaction here. I am sure you would be equally scathing if CC or any other org were to put in place low-paid, under qualified people that did not handle public or private funds appropriately. People who work in human services, unlike the nuns in the Catholic Church, did not take a vow of poverty. Being mission-driven does not mean that employees agree to be poorly compensated for complex work. It just means that our efforts are aimed at improving the quality of life for the people and communities we serve, as opposed to lining the pockets of shareholders.
Comment by Andrea Durbin Monday, Mar 11, 24 @ 6:13 pm
@Invisibleman - just make them all work for free or give the CFO and President of a multi-million dollar organization, $15/hr and clock in and out every day?
I’m sure the union construction folks doing work at any facilities are pulling down $100k/year. Is one guy dropping concrete or maintaining one facility as a 399 Engineer worth 1/3rd of a CFO or President managing a multi-million dollar corporation and thousands of employees?
Comment by Frida's boss Monday, Mar 11, 24 @ 11:01 pm