Catholic Charities to cut 300 jobs in shift from government contracts

Catholic Charities of the Archdiocese of Chicago will lay off 300 employees as it cuts scores of government contracts in response to an “increasingly complex and uncertain government funding environment,” the group announced Thursday.

The organization plans to end 75 government contracts starting July 1 as part of a new strategic plan that Catholic Charities says will shift its business model to rely less on public funding.

The contracts, which fund 12% of its budget, cover child care, youth programs, behavioral health counseling, senior care, adult protection, veteran services and call centers. The group declined to share the names of the contracts.

“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,” Sally Blount, president and CEO of Catholic Charities, said in a news release.

“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,” she said.

Blount said the organization will continue serving 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 on Chicago’s South, West and Southwest sides.

Catholic Charities’ business model is heavily reliant on government money. The majority of its revenue — 73% — was from government fees and grants in 2023, according to its yearly report. Contributions and bequests were 22%.

Catholic Charities will reduce its staff by roughly 300 employees over the coming months: 280 who work across the affected government contracts and 20 in related administrative areas. A staff of nearly 1,000 people will remain after that.

Affected employees will receive severance benefits and assistance with job searches at Catholic Charities’ sister organizations, including Mercy Home, Misericordia and Maryville.

Catholics Charities said the new strategic plan was the result of a yearlong effort with consulting from the Bridgespan Group. Blount initiated the new direction three years ago, when she was named chief executive, “to strengthen Catholic Charities’ governance, operations and financial oversight,” the group said in the release.

Board Chair Michael Monticello said in the release that the group has come to realize over the last year “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.”

Cardinal Blase Cupich praised the board’s leadership for undertaking “an important strategic exercise — one that all organizations of substance must regularly do.”

“I laud them for their courage, vision and commitment to deepening the Church’s impact on behalf of the region’s most vulnerable,” Cupich said in the statement.