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October 24, 2017; Chicago Tribune

There are any number of variations on this story occurring all over the United States. See if you recognize a nonprofit near you.

The Chicago Tribune released an article earlier this week documenting the egregious failure of the Illinois Department of Child and Family Services (DCFS) Intact Family Services program and its nonprofit contractors, which resulted in the tragic deaths of 15 children since privatization of the program. This heartbreaking case exemplifies all that can go wrong when state functions are privatized recklessly and when public-private partnerships lack proper oversight, accountability, funding, and support.

The story began a little over five years ago when, as some NPQ readers will remember, many states were plagued with gaping budget holes. Illinois was among the states with budget deficits up to twenty percent of overall expenditure. In an effort to balance the budget, the state slashed funding for public services—one such service being the DCFS Intact Family Services program. After scotch-taping the budget holes, Illinois then faced a two-year budget impasse, which again left public services and nonprofits relying on public funding reeling.

The goal of Intact Family Services, as the name suggests, is to keep families together through the provision of case management and safety monitoring services for families considered at-risk for abuse and neglect. At-risk families tend to have parents who struggle with substance abuse or anger management but otherwise have not given the state reason to place the children in foster care.

Given the meager budget Intact Family Services was left with following the 2012 cuts, the program restructured and changed its eligibility criteria so that only the riskiest families, defined as a family that had six or more abuse investigations, were served by Intact Family Services. In addition, the entire caseload was outsourced to nonprofit organizations. In hindsight, trouble was brewing under the surface. At the time of the budget cuts and restructure, an Intact Family Services fact sheet indicated that DCFS Director Richard Calica “claims that DCFS can limp along by pushing off the most at-risk families onto existing DCFS private contractors—without providing any additional resources for those agencies.”

Moreover, there is evidence that the Illinois DCFS has been a troubled agency. NPQ has discussed the executive turnover at the agency, the most recent of which was George Sheldon, who resigned amid an investigation for conflict of interest. At the time that DCFS passed the Intact Family Services program on to nonprofit contractors, the agency was already under fire for child deaths under their watch, suggesting possible problems with the Intact Family Services model. If after six abuse investigations a family is still only considered “at risk,” what does it take for the family to be deemed unsafe?

A possible consequence of staff turnover, both DCFS and nonprofit representatives questioned by the Tribune agree there was little programmatic oversight. DCFS Director Beverly Walker admits, “When we did that privatization, we…more or less just sent cases over and we didn’t have any expectations—or any good expectations—about what (the nonprofits) were going to do.”

Kathy Grzelak, chief of Kaleidoscope 4 Kids, one of the Intact Family Services nonprofit contractors, said that while DCFS representatives did occasionally perform inspections, little information was communicated to the nonprofit. She said, “There is nothing in writing. There is no accountability. When are we going to get a more robust conversation about how we are doing?”

That this is a tragic story goes without saying, but this case also raises incredibly important questions for the nonprofit sector. In “The Four Impulses of Nonprofits and What They Each Create,” Lester Salamon discusses the debate “over the extent to which we can rely on nonprofit institutions to handle critical public needs.” As more nonprofits are being relied on to be the primary provider of social and safety net services, what ground rules need to be created?

This case brings up a question that NPQ has posed previously—when should nonprofits turn down funding? In addition to refusing contracts that don’t allow a nonprofit to recoup full costs, perhaps add this to the list: Turn down state contracts when the state agency is under fire, the program has a questionable model, and the agency knowingly expects nonprofits to take on an unrealistic caseload.

Lastly, what responsibility do state agencies have in ensuring that nonprofit contractors operate effectively? Does the buck stop with the nonprofit, or with the lead agency, which should have been supervising the situation better?

The Illinois DCFS and its nonprofit partners are playing the blame game, each placing the onus of responsibility on the other party. At the end of the day, both agencies were charged with ensuring the safety of the 15 children who died. There are no winners here.—Sheela Nimishakavi