Editor’s note: a name in this story has been changed to protect anonymity; it is marked on its first instance with an asterisk.
Carol Moreno* hadn’t gotten through the first couple days of her weeklong vacation last fall when her cell phone started to ring. The clock in her room read 5 AM as she rubbed the sleep from her eyes and answered the call. On the other end of the line were a pair of her bosses from Heartland Alliance Health, a branch of the social services behemoth Heartland Alliance. The call was urgent, they said. And unavoidable. Within a couple weeks, Moreno, along with more than 50 of her coworkers, would be furloughed—five days before Thanksgiving.
“I asked them how their accounting team didn’t prevent this. And the answer was, ‘I’m really sorry,’” says Moreno, who asked that her real name not be used for fear of retaliation, in an interview with the Reader.
Heartland Alliance, originally formed in 1888 as a chapter of Travelers Aid, is one of the oldest social welfare institutions in the country. It was founded by legendary activist and reformer Jane Addams, the second woman to win the Nobel Peace Prize and whose name is etched across Chicagoland parks, schools, and one tollway.
In the century and a half since its inception, the nonprofit has grown to become a household name in Chicago health services, receiving millions of dollars annually from the city, state, and federal governments for services including health care, housing, immigration assistance, and violence prevention, for low-income and other marginalized communities.
But amid financial turmoil, the umbrella organization Heartland Alliance plans to close, marking a new chapter for the organization as it transitions some subsidiaries to become independent. The dissolution of a storied parent nonprofit leaves the potential for major gaps in Chicago’s social safety net, eroded by many years of neoliberal policies that saw public needs increasingly outsourced to nonprofit and private enterprises. As early as May 1, the organization hopes to spin off its subsidiaries and one program—Heartland Alliance Health (HAH), Heartland Alliance International, Heartland Human Care Services, and the National Immigrant Justice Center—into their own nonprofit entities, multiple sources tell the Reader, raising questions about the future of the many services the organization provides both locally and around the globe.
Ed Stellon, Heartland Alliance’s chief external affairs officer, called the organization’s financial troubles “undoubtedly a challenging situation” in a statement to the Reader. “Our mission to help the most vulnerable and our local communities remains unwavering, and we will always make the right decisions to fulfill this commitment, even when those decisions are hard ones.”
Stellon noted HAH has not cut any programs. He writes that the organization remains “optimistic that as a result of these changes the newly independent organizations will be able to continue providing care and necessary resources to our communities’ most vulnerable for decades to come.”
Siddharta Neal, a formerly licensed paramedic, worked at HAH for eight months as a mental health worker before he heard about furloughs coming. He was under a union contract but had limited seniority. Neal ultimately left his position in early November—because of both the looming furlough and the working conditions at Pathways Home, an HAH community housing program for people with mental illnesses and substance use disorder.
“I had to make a tough decision. I was in several meetings where workers were pretty much crying and saying they’re about to lose their apartments,” he recalls. “I’d have been terminated and there was nothing else to do about it.”
Pathways Home was already understaffed prior to the furloughs, Neal says. He worked the night shift, from midnight through 8 AM, and says there were usually only three employees to care for roughly 50 patients across two floors. “You’re not supposed to touch [patients] at all. If she can’t get up by herself, we’re supposed to call 911. Now, what type of shit is that?”
Many of the workers furloughed before Thanksgiving relied on unemployment to get by, says union representative and case manager Michael Brieschke. In addition to furloughs at HAH, around 100 non-HAH support staff were also furloughed, Brieschke says, including those in accounting, human resources, and research. “Most of these staff have since been laid off.”
A majority of the HAH workers temporarily discharged—43—were members of the union, which represents some 500 workers across Heartland Alliance’s branches.
Stellon writes “42 positions were reinstated” by the end of January, with eleven other HAH positions eliminated, though Brieschke says most people had moved on to work elsewhere. (Stellon says HAH today employs 147 people, union and nonunion, about half what HAH reported in its most recent tax filing, 270 employees.)
“Staff that have continued on and our participant-facing positions have been burdened with extra work,” Brieschke tells the Reader. “As a union, we’re really concerned about how we can provide quality care to our participants.”
Tax filings show the median salary for executives at Heartland Alliance was more than $200,000 in 2021 and 2022, while Brieschke said the median salary for a Heartland Alliance union employee is less than one-quarter of that, roughly $47,000. He also says Heartland leadership has not provided any monthly employee data, as required by their contract. “There are several other monthly reports mandated by the [collective bargaining agreement] that Heartland is failing to provide at this time, despite multiple requests,” Brieschke says.
It’s unclear which of the more than one dozen programs operating within HAH will remain operational as it becomes its own entity. Currently, patients seeking mental health counseling are being referred to other agencies in the city or they can choose to receive short-term treatment from HAH capped at eight sessions.
During his time at Pathways, Neal says other HAH programs were increasingly consolidated into the same building space. One employee, who asked to remain anonymous, says another of HAH’s community housing programs, Antonia Safe Haven, moved into the same building in December due to the mounting financial constraints.
The timing of the furloughs was a two-fold disaster, Moreno says. She and other current and former employees tell the Reader Heartland flung workers into financial limbo during the holidays, a time when a large portion of HAH’s clientele—refugees and asylum seekers—faced retraumatization amid the ongoing mass displacement caused by Israel’s bombardment of Palestinian territories.
“I work with people who struggle with mental health,” Moreno says. “With what’s going on in Palestine and Israel, a lot of my participants have been experiencing retraumatization through traumatic symptoms, PTSD symptoms.”
Moreno was one of a handful of staff who decided to return when the organization recalled workers in the new year, almost two months after they were temporarily let go. That’s a long time for HAH’s clientele to receive what she describes as inconsistent care. Many of her clients need intensive mental or medical care but lack the means to afford it. Some cried when she returned to work.
“I was overwhelmed by their emotions. I just didn’t expect them to consider us like their family. I was very grateful,” she says.
Still, the return doesn’t guarantee services will continue through the year. “Because of what happened in November, I think all of us are still very wary. I think we lost—I, at least—lost trust,” Moreno told the Reader in February. “I’m very cautious that we could be fired again. Anything can happen.”
The turmoil at Heartland Alliance shares a number of parallels with the downfall of Hull House, another social services organization founded by Jane Addams in the late 1800s that closed its doors and filed for bankruptcy in 2012. Its leaders at the time cited financial strains due to general economic turmoil, but multiple postmortems found Hull House faced cash shortages and negative balance sheets more than a decade before it shuttered.
Reliance on government grants for a behemoth like Hull House, which grew exponentially, ultimately became part of its end, according to a report by the Northwestern University Kellogg School of Management. It reads, “Overdependence upon a single, increasingly unreliable source of funding with complicated regulations had hurt the organization.”
Fractures likewise appeared in the facade of Heartland’s programs. All of the now-defunct Heartland Housing’s employees were laid off in recent months, and the organization aimed at creating “affordable and supportive housing” is transferring properties under receivership to “new owners,” Stellon writes. Heartland Housing was the smallest-staffed subdivision of Heartland Alliance in 2022, according to the organization’s most recent tax filings.
At the beginning of 2023, months before Heartland Housing began laying off employees, its parent organization attempted to find a new owner for the cash-strapped entity’s portfolio. By that April, Heartland Alliance had made the decision to “no longer support Heartland Housing’s operations,” according to audited financial documents.
“Heartland Alliance has never had financial responsibility for the operating results of the other Heartland companies,” Stellon writes. “When Heartland Housing encountered financial problems arising at least in part from the pandemic, Heartland Alliance took steps to try to make sure that the residents of the Heartland Housing properties remain housed.”
Executives at Heartland Alliance told the Chicago Tribune in early February that they hadn’t learned of financial troubles at HAH until last fall. Stellon writes in response, “As soon as the current management team became aware of the cash flow challenge,” they engaged with “pro bono consultants from Boston Consulting Group to develop a detailed transition plan. The independent organizations will handle the administrative functions through a combination of outsourcing and building their internal staffs.”
Audited financials, posted to Heartland’s website, indicate that even as financial difficulties mounted among its subsidiaries, cash shortages were on the horizon for the main organization well before the final months of 2023. In 2022, for example, Heartland Alliance’s total liquid cash and cash equivalents—the benchmark for the amount of money a nonprofit has on hand for operations and programming—were the lowest they had been since 2013. That same year, Heartland’s total expenses climbed by more than ten percent, more than at any other point in the past decade, to $189 million, before write-offs.
The deficit followed a 2021 rebound from the onset of COVID-19. But in 2022, “net cash provided by operating activities”—a measure of an entity’s ability to generate revenue—was in the negative for every subsidiary except HAH.
Multiple people the Reader spoke with at Heartland say the nonprofit experienced delays in receiving reimbursements from Medicaid and local grants that contributed to the organization’s financial issues.
“I just can’t imagine they would just learn about this in September,” says one current employee who asked to remain anonymous. “[Heartland] had to have known this way before. They sent people out of work around the holidays. People have families, it’s just—I’m really sad.”
Jennifer Mosley, a University of Chicago professor who researches the impact of nonprofits on underrepresented communities, questions why the organization didn’t have an up-to-date annual report on its website. Reports from previous years were difficult to find, she adds.
“That is very unusual for an organization of this prominence in the city. If I was a major donor, I would have been like, ‘Wait, what? How is that something you’re not reporting?’”
Turnover among Heartland Alliance executives mounted alongside the organization’s growing financial strain. Elias Rosario, former Heartland chief financial officer, resigned from his position in February 2023, according to his LinkedIn profile. Former Heartland president Evelyn Diaz resigned from her position just six months later in August 2023, according to a LinkedIn update. Neither responded to various calls and voicemails.
Rosario’s resignation came right in the middle of the failed sale of Heartland Housing, during a 60-day due diligence period (from January to March 2023, according to audited financials) when the potential buyer had time to inspect Heartland’s properties and ultimately decided to not move forward with the purchase.
In February, the Reader attempted to reach Heartland Alliance’s interim CFO, Marcelo Presser, but an automatic email reply directed inquiries to a new interim CFO, Sally Beach, because Presser had left the company. Emails to Beach, however, advised they, too, had left the company and directed inquiries to a third person, David Wells. Wells did not respond to the Reader’s request for an interview about Heartland’s financial situation.
All the officials reached by the Reader, including members of HAH’s board of directors, declined to speak on the issue and instead directed inquiries to Stellon. In a statement, he writes the leadership team at Heartland determined “a substantial restructuring was necessary” to keep its most vital services operational. And each of the nonprofit’s subsidiaries would become “independent entities.”
“What has emerged is a dynamic plan that lays out a pathway to success for the organizations and programs that are currently part of Heartland, details the activities necessary to achieve an ideal outcome, and provides a high-level budget for the transformation,” the statement continues. “Our priorities during this transition are to continue serving those who depend on us and to forge pathways to financial sustainability for each newly independent program.”
The most financially secure division of Heartland’s network is Heartland Human Care Services (HHCS). It operates a similarly large number of programs as HAH—but it’s propped up by hundreds of millions of dollars in federal grants. More federal dollars flow to HHCS than to all other Heartland branches combined.
Since the 2013 fiscal year, HHCS has received $480 million from the federal government. Federal grants to other Heartland divisions during the same time period total $130 million, about one-third of the money sent to HHCS. Eighty percent of HHCS’s federal funding comes through the Unaccompanied Children Program (UCP), run by the U.S. Office of Refugee Resettlement (ORR).
ORR takes custody of unaccompanied immigrant children based on referrals from other federal agencies, then places them in detention centers across the country while the government works to verify their sponsors. Most of the children in ORR’s control were detained by immigration authorities at the border. HHCS’s current contract under the UCP runs through early 2026. (Stellon writes, “HHCS has over 20 program areas. . . . The Unaccompanied Children shelter program represents 48 percent of HHCS’s overall budget.”)
Years of reporting into the HHCS UCP program by ProPublica, first published in 2018, revealed allegations of neglect and abuse, staff who were ill-equipped to care for the children in their custody, and bathrooms without locks. In 2019, HHCS closed four of its facilities (all in Des Plaines) and said it would invest in staff, training, and resources at the five remaining ones.
According to Stellon, “Reports that surfaced when children were separated from their parents in 2018 were thoroughly investigated. The investigation included DCFS, the ORR Inspector General, and an independent law firm reviewing hours of taped footage, and the conclusion was that the reports were unfounded.” (The Reader was unable to independently confirm the outcome of the investigation by press time.)
Stellon adds, “Heartland moved out of the Des Plaines facilities because we were unable to renew the lease on acceptable terms,” stating one of the disagreements was that it did not allow the organization to provide reproductive care to teens in its facilities.
In 2021, citing ProPublica’s reporting, Senator Dick Durbin asked the inspector general of the U.S. Health and Human Services Department to investigate “the welfare of Afghan children and teens placed in shelters nationwide by [ORR] and, in particular, the children being cared for at the Heartland Alliance shelter located in Bronzeville.” It’s unclear whether any investigation happened.
The Office of Inspector General for the Health and Human Services Department said in an emailed statement that the “OIG takes seriously any allegation of harm and we are currently undertaking work that will touch on some of the concerns raised in Chairman Durbin’s letter,” referencing a forthcoming report titled “National Snapshot of Recent Trends in the Refugee Resettlement Program” that is expected to be released by 2025.
Sarah Gourevitch, an organizer with the Free Heartland Kids campaign, says children end up in Heartland facilities from across the country, regardless of where the children’s families may be. The increase in migration from South American countries “would impact how many kids Heartland’s detaining,” she says, as they’re a proxy of the ORR. “I imagine they see that as a huge opportunity to possibly expand.”
In his response, Stellon writes, “ORR determines the shelter placement of children. HHCS has no plans to expand shelter services.”
Delon Black was in a halfway house after he left prison in 2021 when he discovered the Rapid Employment and Development Initiative, or READI. The one-year Heartland program “connects people most highly impacted by gun violence to cognitive behavioral interventions, paid transitional jobs, and wrap-around support services.”
Black first joined as a participant. Through the program, he received regular stipends to attend career readiness classes. He learned he was drawn to case management, what he describes as helping others be their best selves. So, after completing READI as a participant, he landed a job at the organization and continued on as an outreach worker. Part of the job required connecting with hundreds of young people on Chicago’s south side. Many, he says, are “struggling financially” and are simply “looking for opportunities to put money in their pocket.”
“I’m surviving, I’m not living.”
But fewer than two years into the job, Black and everyone else employed by READI were laid off when Heartland Alliance transferred ownership of the program to another of the city’s large social services nonprofits, Metropolitan Family Services (MFS), in late January.
“It was work that I absolutely loved and met some amazing people along the journey,” Black tells the Reader. “Witnessed a lot of human victories.”
Marlon Hammond, a READI outreach worker for nearly six years before he was laid off with the rest of the team, praises the program’s foresight in preventing gun violence. “The whole process was more organic and intimate, original. And I like that approach because it’s not like we’re gonna go somewhere where a shooting already happened. Man, we [were] being proactive,” he says.
In a response to emailed questions from the Reader, Vaughn Bryant, executive director of Metropolitan Peace Initiatives (the division of MFS now responsible for READI Chicago), writes the organization “expects to keep most of the current programming the same” for the rest of the fiscal year but will still “take the next few months to observe and learn how the program is delivered” before making changes.
Bryant continued, “As a part of this program transfer, Metropolitan Peace Initiatives has welcomed aboard a number of former READI staff members whose expertise and dedication will be invaluable.”
Black and Hammond say they, and none of the former READI outreach workers they know, have been contacted by MFS about how they operated the program, raising concern for the program’s future amongst a wide variety of violence interruption programs. Black says the former READI staff brought on were likely program managers with college degrees, not on-the-ground outreach workers with certificates and life experience to bolster connections with READI’s clients.
Eddie Bocanegra launched the READI program with Heartland Alliance and served as its executive director from 2017 until 2022, when he took a leave of absence to work as a senior adviser at the U.S. Department of Justice’s Community Violence Intervention (CVI) Office. The program has been on shaky footing since then, Hammond says.
“We were pretty much abandoned a long time ago. Once Eddie Bocanegra, the senior director, became assistant to Merrick Garland and went to Washington, that was a shake-up,” Hammond explains. “It just never recovered from then.”
In his response, Stellon writes, “READI consistently had strong leadership. . . . In fact, READI’s leaders have been recruited to top positions at other CVI organizations.”
Hammond says he’s now working assorted part-time, short-term jobs to get by. He recently worked as an election judge at a primary election polling site. “I’m surviving, I’m not living,” he says.
Black hopes to find another outreach job. But for the time being, he might put that dream on hold. “Man, I’m just gonna get my [commercial driver’s license] or get in the construction trade,” he says. “I won’t have to deal with the uncertainty of this line of work.”
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