Depending on the severity of their problems they could also sell them or give them to someone, particularly if it's a long term issue.
If there's nothing wrong with the horse I'd try selling it first. Give it a try for a couple of weeks. If nothing turns up then I'd turn them over to a rescue. My rationalizing is that rescue organizations need to spend the most time and money on the horses they rescue from such places as abusive homes. If they can avoid putting extra strain on the rescues that would be best.
There is a great rescue in Sandwich, IL (about 60 miles from Chicago). I don't remember what it is called but I think it is something like Lazy Maple. The one thing about a rescue is that they will not take a horse if it is not trained to ride--they are just so much easier to place. If your friend has time now is definitely a good time to try to sell the horse. There are a lot of online horse ad's. IL horse online would be a good place for someone in the Chicago area. Good Luck
Thankyou to everyone who replied. We actually gave her away for free to a very nice lady who has other horses and an 80 acre farm!
She's an awesome person and keeps in touch via E-mail and has given us the okay to visit! Thanks again!