Catholic Charities of Rockford announced Thursday that the agency will halt its state-funded foster care and adoption services Wednesday — the day civil unions take effect in Illinois.

The decision is the first of what could become a domino effect of Catholic Charities leaving the foster care and adoption business to avoid liability if state law requires them to place children with parents in civil unions — either gay or straight.

In Rockford, the decision could displace about 350 foster children served by Catholic Charities and put 58 employees out of work.

Officials cited a lack of clarity in the Illinois Religious Freedom Protection and Civil Unions Act, which does not specify whether religious child welfare agencies must place children with couples in civil unions.

Without a specific provision protecting religious agencies, church officials said, the agency can't risk losing state contracts or facing lawsuits if it turns away gay couples or others in civil unions. State funds make up about half of Catholic Charities of Rockford's $7.5 million operating budget.

"While we understand leaving this work will be very painful for our client families, employees, volunteers, donors and prayerful supporters, we can no longer contract with the state of Illinois whose laws would force us to participate in activity offensive to the moral teachings of the church — teachings which compel us to do this work in the first place," said Frank Vonch, director of social services for the Diocese of Rockford, which includes Kane and McHenry counties.

Lawyers for Gov. Pat Quinn, Attorney General Lisa Madigan and the Illinois Department of Children and Family Services have been examining whether religious agencies that receive public funds to license foster care parents are breaking anti-discrimination laws if they turn away openly gay parents.

Several attempts have been made in Springfield to pass an amendment that would exempt religious child welfare agencies, but none have made it to the floor for a vote.

Ellen Lynch, general counsel for the Rockford Diocese, said the agency would consider reversing its decision if an amendment passes permitting religious institutions to refer couples in civil unions to another of at least 45 other agencies in the state. But the longer that takes, the more difficult that will be, she said.

In addition to Catholic Charities in five regions, Lutheran Child and Family Services and the Evangelical Child and Family Agency have policies that exclude prospective parents who are not married.

There is no word on whether Catholic Charities in Peoria, Joliet, Springfield or Belleville will make a decision similar to Rockford's. Ken Withrow, executive director of the Evangelical agency, said it was too early to make a decision. Gene Svebakken, president and chief executive officer of Lutheran Child and Family Services, said the agency may change parts of its policy if required to by the state.

Right now, lawyers for the agency believe state laws already exempt religious agencies and any amendment would be irrelevant, Svebakken said.

"It's our Christian vocation and calling to serve children," he said. "It's sad to see organizations give up."

Benjamin Wolf, an attorney with the American Civil Liberties Union of Illinois who represents juvenile state wards as part of a court-monitored consent decree with DCFS, said the decision was troubling, especially in Rockford where there is a high turnover of child welfare workers and racial and economic tensions.

"Rockford would not be the place I would've chosen to start these transitions," Wolf said. "I am very sorry that they would give a greater priority to their commitment to continue discriminating than the health and welfare of Illinois children."

Wolf said that when Catholic Charities in Chicago ended its foster care services in 2007 because the agency's insurer dropped its coverage, many caseworkers and foster care homes agreed to transfer to other agencies without disrupting the children's placements. He hopes families in the 11 counties served by Rockford Catholic Charities will be similarly amenable.

Officials from Catholic Charities and DCFS will meet next week to begin the transition process.

mbrachear@tribune.com

Twitter @TribSeeker