‘We need $500,000 and we need it now’: PADS of Elgin facing dire budget crisis as winter approaches

PADS of Elgin is seeking help as it faces an urgent budget crisis that could threaten the shelter’s ability to house people this winter.

“We need $500,000 and we need it now,” Executive Director Katie Shaw Thompson said.

Without an infusion of funds, she said, the situation looks dire.

“It means more folks living out of their cars, it means more single moms with their kids and veterans and people with disabilities without a safe place to go,” she said. “It means people are without the kind of long-term investment that we offer here that helps to get them sustainable housing.”

The budget shortfall stems from an end to federal American Rescue Plan Act funding that the organization had come to rely on during and after the pandemic.

While PADS of Elgin leaders knew that COVID relief funding would expire, other federal dollars they were expecting have been frozen. As a result, the organization is short nearly half the annual $1.7 million operating budget projected for the next fiscal year.

‘Threats to the nonprofit sector’

Other homeless service organizations in the suburbs are concerned about an increase in demand as a result of less funding for healthcare and food assistance programs.

DuPagePads President and CEO April Redzic said that while their budget is balanced for the next fiscal year, she’s concerned about how cuts in federal programs will increase the need for emergency shelter.

“As SNAP benefits go away and Medicaid benefits go down, that’s going to create more vulnerable people who have to pick between buying food and paying rent,” Redzic said. “When they have to choose between starving and paying their rent, they lose their apartment and wind up coming to us.”

She said they had a projected balanced budget last year, but “we wound up with significantly more people than we expected.”

They were able to raise the shortfall last year through funds from the county and the DuPage Foundation.

“The ecosystem for people who are living in poverty is becoming worse, so I have worries that as it becomes harder for people, we’re going to have more demand with less availability,” she said.

At PADS Lake County, officials say its funding remains “relatively steady,” with roughly 13% coming from federal sources. The remainder comes from state allocations, foundations and individual donors.

Executive Director Allen Swilley said the volatility in federal funding is threatening state funding and creating uncertainty for everyone. He said it “makes it harder to plan for critical projects like shelters and affordable housing.”

“Beyond funding, shifting national values away from compassion and unity toward division and diminished empathy only makes our work more challenging,” Swilley said. “Threats to the nonprofit sector are, ultimately, threats to the health and quality of life of our entire community.”

Seeking community support

For PADS of Elgin, officials are counting on community support to help the organization’s finances get back on track.

“We’re looking for help to get through the next six months and to help us keep doing what we do through the winter,” said Thompson, adding that they then “can make a more sustainable plan moving forward.”

Meanwhile, the organization, which celebrates its 35th anniversary this year, finds itself in a “best of times, worst of times” situation, Thompson said.

The space PADS of Elgin rents at 1730 Berkley St. from Wayside Cross Ministries recently underwent a much-needed renovation that was completely funded by the landlord. The makeover included new paint, flooring, and kitchen improvements.

“It feels very homey, very quaint and comfortable and beautiful,” said Jen Keller, the development manager. “That goes to helping clients feel like they matter.”

However, the shelter lost space as a result of the renovation, and its bed capacity was cut from 45 to 30. Wayside reduced the rent by about $2,600 a month for the lost space.

“These 30 beds are not nearly enough,” Thompson said. “And yet for PADS, this is an appropriate response to the fiscal footing that we are on. We’ll save some rent and utilities and be able to do what we do in a leaner way, while we rebuild for a future in which we can serve more people more effectively.”

The lowered rent payments and other cuts have reduced the organization’s budget to roughly $1.5 million.

Before the pandemic, many of the services PADS of Elgin offered were run by volunteers, Thompson said. Now, that volunteer labor doesn’t exist, she added.

Instead, the organization hired and trained staff, which has allowed it to raise the quality of what it offers — a safe place available 24 hours a day, seven days a week.

“It makes a big difference for people to have a real home, not just some place they’re kicked out of every day,” she said.

Thompson said she hopes people see the value in what they do for people’s lives. A public ribbon cutting is scheduled for 10 a.m. Sept. 17 at the shelter to show off its changes and court potential donors.

“This is the opportunity to put your financial resources in a place where they can make a lasting and immediate impact,” Thompson said. “It really depends on the response of the community if we’re going to be able to keep doing what we’re doing.”