OIG Advisory Recommends Reconsideration of the City’s Inactive $57 Million Catalyst Fund

OIG Advisory Recommends Reconsideration of the City’s Inactive $57 Million Catalyst Fund


The City of Chicago Office of Inspector General (OIG) has published an advisory concerning the governance and investment activity of the Chicago Community Catalyst Fund. The Fund was established in 2016 to increase access to public and private investment capital for businesses and organizations in economically underserved areas of Chicago. While former Mayor Rahm Emanuel originally proposed pooling $100 million in public money with private investment in the Fund, the Fund was inactive for several years until the City contributed $50 million in 2020. Approximately $21 million of this money was then used during the Covid-19 pandemic for small-business loans, which later were repaid to the Fund.

  

A lack of public reporting since that time raised concerns that the Catalyst Fund Board, which is chaired by the City Treasurer, was not in compliance with legal requirements governing the management of the Catalyst Fund’s assets, now totaling more than $57 million. Based on available information, the Fund has made no new investments since 2020. OIG also found that, although the original purpose of the Fund was to pool public and private capital, no private investors have contributed to the Catalyst Fund during the 10 years of its existence.

 

“The City established the Catalyst Fund a decade ago to provide investment capital to small businesses in Chicago,” said David Glockner, Inspector General for the City of Chicago. “The Fund’s last investments were made in 2020, and the loans have been repaid, leaving a balance of $57 million in a Fund that is effectively dormant. The City should either use the Catalyst Fund for its intended purpose or evaluate whether to dissolve the Fund and use its assets for other purposes.”


In a July 2026 letter to the Treasurer’s Office, OIG suggested that the City Treasurer and Catalyst Fund Board of Directors comply with the Fund’s establishing ordinance by using the Fund for its legislated purpose, submitting required reports of investment activity, and ensuring that the Fund’s governance structure supports transparent decision-making. Alternatively, the City could terminate the Fund and allocate over $57 million in assets for other investments or general municipal purposes.


In response to OIG’s advisory, the Fund, through its counsel, replied largely agreeing with OIG’s suggestions. The response detailed corrective actions, including retroactive filing of the missing required annual reports. The response also stated that the Treasurer will seek to dissolve the Catalyst Fund. 

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