The Foundations of East Chicago, an organization that funds schools, churches, and even other nonprofit organizations, has been weathering a five year funding freeze that is finally over. During those five years, The Foundations survived political pressure, and even a lawsuit filed by the state’s attorney general, all with almost no funding.
East Chicago’s churches, schools, and social service agencies applaud The Foundations as an integral part of what keeps East Chicago operating. The Foundations derives its funding from the profits of the local casino, and collects around $3.8 million a year that they distribute throughout the community.
This funding method is a remnant of a deal struck between the city and the casinos long ago. The lawsuit brought by the state attacked The Foundation for being top-heavy on administrative costs and salaries.
Since the lawsuit, The Foundations has reorganized and streamlined its administration, a step the Executive Director Russell Taylor admits was necessary. Taylor acknowledged the need for change, but also applauded the millions that The Foundations allocates to East Chicago, helping to make the lives of its residents better and better each year.
So how did this organization survive five years with no revenue? Through a deal with a private company, and by splitting up The Foundations into two separate entities. Although The Foundations share of the casino profits were tied up in escrow between 2007 and 2011, they still managed to distribute the millions of dollars in the same way they had in the past. In 2011, after a legal settlement was reach, The Foundations received $29.8 million that allowed them to repay all debts incurred during the lawsuit.
The lawsuit also helped to right the sinking ship that was The Foundations prior to 2007. After adhering to the Indiana attorney general’s recommendation to combine the two separate bodies into one and reducing administrative costs, The Foundations are now solvent and sound for the foreseeable future.