Chicago Faces Potential $60 Million Cut to Homeless Services as Winter Walk Mobilizes Emergency Response

Chicago Faces Potential $60 Million Cut to Homeless Services as Winter Walk Mobilizes Emergency Response

Chicago, Ill. — Chicago’s homelessness response system could lose tens of millions of dollars within weeks under proposed federal funding changes, a shift advocates warn would dramatically increase street homelessness during the coldest months of the year.

Additionally, delays on these issues are problematic. The current funding allocation for each housing provider runs out between January 1st and May 1st on a rolling basis, potentially creating a cascading crisis of housing closures and evictions. Lack of certainty about eventual funding, given that the issues are still in court and pending decisions and appeals, makes bridge funding very difficult. The result is a slower elimination of the system, but the same outcome.

According to providers on the front lines, a federal proposal would restructure homelessness funding by shifting funds from guaranteed allocations to a nationally competitive pool, allowing the administration to decide which cities receive support.

Chicago currently receives approximately $90 million annually through these programs. Under the proposal, that amount could drop to as little as $30 million.

Some Chicago homelessness service providers have already begun running out of federal funding as of January 1, while others face funding expirations in the coming weeks—creating immediate instability across shelters, outreach programs, and recovery housing.

“This would be a massive hit to a system that is already stretched thin,” said Doug Fraser, Executive Director of Chicago Help Initiative. “We are talking about funding that keeps people housed, fed, and alive being pulled away in the middle of winter.”

Even if pending legal challenges ultimately block the funding restructuring, advocates warn that the federal government is not obligated to release homelessness funding until May — a delay that could cause organizations to collapse months before any final ruling takes effect.

“What we’re seeing is not just an attempt to cut the system — it’s an attempt to starve it. By delaying funding, organizations will crash one by one between January and April. By the time May arrives, only the biggest providers may still be standing.”

At the same time, changes to SNAP rules are removing long-standing exemptions that allowed unhoused individuals to receive food assistance without meeting work requirements — requirements advocates say are impossible to meet without stable housing, access to showers, or even a place to store clothing.

“Expecting someone to get and keep a job while sleeping outside in February is a fantasy,” Fraser said. “But it’s a fantasy with real consequences.”

These changes come on top of earlier cuts to the Greater Chicago Food Depository and the food pantry system, as well as a recent freeze on federal childcare funding in several major cities — moves that advocates say will push more low-income families into already overburdened emergency food and housing systems.

Against this backdrop, Winter Walk Chicago will take place on February 8 in Humboldt Park, bringing together service providers, advocates, and community members in a coordinated response.

Winter Walk is organized locally by the Chicago Help Initiative and includes six organizations at this point, but with an option to raise funds for a preferred homeless organization through CCH, additional organizations serving Chicago’s homeless and disenfranchised communities. Other organizations may still join, provided funds raised support people experiencing homelessness.

Participants walk a two-mile route and solicit donations from their networks. One hundred percent of the money raised by each walker goes directly to the organization they are walking for. No funds are diverted elsewhere.

“This is not a charity stroll,” Fraser said. “Winter Walk is a catalyst. The mission is to hold together a system that is about to be torn apart.”

Founded by a Boston-based organization, Winter Walk now takes place in multiple cities nationwide. Chicago’s first Winter Walk last year drew 500 participants. Organizers are aiming for at least 1,000 walkers this year amid escalating funding pressures.

“If these cuts go through,” Fraser warned, “Chicago will see more tents in parks, more people under viaducts, more people discharged from hospitals with nowhere to recover. That outcome is not inevitable — but it is where we’re headed if nothing changes,” he said.

The Chicago Help Initiative (CHI) is a nonprofit serving individuals experiencing homelessness, food insecurity, and poverty through prepared meals, case management, health resources, job readiness programs, and a Free Store for essential items. With no government funding and a 95% volunteer-run model, CHI supports over 44,000 people annually — powered entirely by community compassion. Learn more at chicagohelpinitiative.org

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