SPRINGFIELD, Ill. (CNA)—Catholic Charities in the Diocese of Springfield, Ill., has announced a major reorganization in response to the state’s termination of its foster care and adoption contracts. The agency intends to strengthen its Catholic identity and become more self-reliant in funding its services.

“It is imperative that Catholic Charities is not eliminated from the public consciousness as a result of this unfortunate conflict with the state,” said Steven Roach, the agency’s executive director.

The Illinois Department of Children and Family Services ended the contracts because the Catholic agencies would not place children in homes of unmarried couples, including homosexual couples and those in civil unions.

The contracts provided the Springfield agency with about half of its revenue, or $5 million per year, the Illinois State Journal-Register reported.

Catholic Charities agencies have served thousands of children and families in Illinois since 1921. Collectively, they handled about 20% of the adoption and foster-care cases in Illinois.

“We are forever grateful for the compassion and sacrifice of our foster-care staff and parents who have dedicated their lives to helping abused children,” Roach said.

He said the diocese’s Catholic Charities will continue to work with the Department of Children and Family Services and designated receiving agencies to “minimize any potential disruptions” for those served by its foster-care programs.

The reorganization intends to maintain all seven regional offices across the diocese and to continue Catholic Charities’ commitment to the communities it has served for decades, the agency said Jan. 9.

The “significant financial impact” of the contracts’ termination means that some services will be scaled back. Roach said the agency intends to restore all programs to their current capacity by increasing community support in the future.

Catholic Charities’ diversification of services is “a real strength,” he added.

“Catholic Charities serves thousands of children and their families through the many programs we offer. While our overall budget will be reduced, the impact on the lives of the many people we serve remains substantial.”

Catholic Charities of Springfield has provided services throughout the 28-county diocese since 1925.

Its services include counseling, food pantries, Meals on Wheels, elderly guardianship, family services, financial and crisis assistance, health clinics and resale stores.

“These programs serve thousands of people every year and allow us to fulfill our faith-directed mission of helping the poor and suffering in our midst,” Roach said.

The Springfield agency and other Illinois Catholic agencies had challenged the contract termination in court but lost in both state circuit and appellate courts.

Attorneys argued that the requirement to place children with unmarried couples and with those in civil unions violated the agencies’ religious principles. They also said religious agencies had been guaranteed exemptions under other state laws and during the state Legislature’s debate over the civil-unions bill, which passed in 2010.