Today’s Chicago Tribune has a good article describing the financial challenges now facing Catholic Charities of Chicago. This nonprofit contracts with state government to provide social services for the poor and needy. Amidst the budget impasse and related financial difficulties facing state (and Chicago) government, Catholic Charities isn’t getting paid, while it has to pay for its workers and the resources in its programs.
Catholic Charities of Chicago has now run up a bill of over $25 million due from the State of Illinois. The organization is facing the prospect of having to fire its workers and stop providing the services it had been providing. And the Catholics aren’t alone; a variety of other religious and secular organizations are facing the same dilemma.
You might be surprised to learn that about 70% of the budget for Catholic Charities of Chicago comes from government funds, which are derived in turn from taxes. The developing fiscal crisis in Illinois may illustrate some of the risks in relying on government money for charity.
Illinois isn’t alone, on this score. In our “State Data Lab” resource, we include results from an Urban Institute study, which ranks states by nonprofits that report late payments from the state. Looking across the 50 states, you can see a pretty strong relationship between Truth in Accounting’s “Taxpayer Burden” measure of state financial conditions and the Urban Institute survey results. Nonprofits in states with high Taxpayer Burdens tend to express more significant concern about the costs of late state payments.
But looking through the State of Illinois financial report, you will not find much in-depth information on the flow of social services spending, and the organizations with which the state contracts to provide these services. Financial reports provide accountability tools for citizens, and not just for the dollars and cents. These documents can help citizens gain greater understanding of the performance of public and “private sector” entities in the missions the government has chosen to undertake. Citizens and taxpayers could be served by greater depth and disclosure in this area in their annual financial reports.