Heartland Alliance traces its history to Jane Addams in the 19th century. The pandemic and the migrant crisis in Chicago has stretched the nonprofit’s resources.
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Heartland Alliance, a Chicago-based social service organization that dates from 1888, plans to spin off its divisions into their own entities as it deals with financial challenges.
Heartland Human Care Services, Heartland Alliance Health, Heartland Alliance International, and the National Immigrant Justice Center will become independent nonprofits, Ed Stellon, Heartland Alliance’s chief external affairs officer, said in a statement.
Stellon said the restructuring was necessary “to protect the long-term viability” of Heartland’s services.
“We will work closely with these organizations in the coming weeks to ensure a smooth transition and that the programs are set up for continued success,” he added.
Heartland Alliance started in Chicago in 1888 as Traveler’s and Immigrants Aid. It lists renowned social reformer Jane Addams as founder.
Stellon didn’t say whether the latest move meant the end of Heartland Alliance itself, but he said the organization “is focused on the transformation at this time and will determine its future as we see how that process progresses.”
The restructuring marks the latest setback for the nonprofit parent company and threatens to affect services that have already been stretched due to the influx of migrants in need of housing and healthcare.
Stellon said there has been “minimal disruption” to those the organization serves during the transition period.
“While this is undoubtedly a challenging situation, we remain 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,” Stellon said.
Last fall, Heartland Alliance shut down its division that operates affordable housing developments in Chicago and Wisconsin. Stellon said at the time the nonprofit was “managing a very severe cash flow challenge.”
Stellon said leadership made those decisions to “place a priority on preserving its vital services.”
The 65 layoffs were among 125 workers who got furloughs in the preceding months. Heartland’s roughly 1,200 affordable housing units were turned over to receivers last May and June as the organization’s financial troubles mounted. More than 1,000 of the units are in Chicago. The group is trying to sell those properties.
Stellon said the housing unit’s finances suffered during the pandemic, which caused heavy job losses among people with lower incomes. Many couldn’t pay rent, he said.
Multiple former employees accused Heartland of violating the state’s WARN Act, which requires employers with 75 or more full-time employees to provide 60 days advance notice of pending closures or mass layoffs.
A mass layoff is when more than 25 employees — if they make up more than a third of the workforce at a single organization — are let go during any 30- to 90-day period without the organization itself shutting down, according to the Illinois Department of Commerce and Economic Opportunity. Terminations of more than 250 employees are also defined as a mass layoff in Illinois.
State WARN records show Heartland Alliance reported 48 “temporary layoffs” Sept. 29. Heartland’s health unit also reported 40 furloughs Oct. 28.
“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 said.
Contributing: Mohammad Samra