Nonprofit workforce reduction planning requires far more than identifying positions and announcing layoffs. Casey Williams of Liebert Cassidy Whitmore explains how nonprofit leaders can restructure responsibly, reduce organizational risk, and preserve dignity throughout an extraordinarily difficult business decision.

The process begins by defining the problem the organization is trying to solve. Is the nonprofit closing a program, reducing its budget by $1 million, responding to repeated deficits, or changing its operating model? Casey advises leaders to document that objective before discussing individual employees.

“A reorganization is about solving a business problem,” she tells us. Performance concerns belong in performance management—not inside a reduction-in-force process.

Casey also outlines how leadership teams can develop measurable selection criteria around positions rather than personalities. Seniority, experience, education, documented performance ratings, and other defined factors can support a more consistent decision. Vague judgments such as attitude, energy, or cultural fit may invite favoritism or unconscious bias.

The conversation also examines important employment-law considerations. Casey explains that the federal WARN Act can require 60 days’ notice when qualifying employers with approximately 100 or more employees conduct certain layoffs affecting 50 or more workers. State “mini-WARN” laws may establish lower thresholds; California, for example, can cover employers with 75 employees.

Severance, release agreements, final pay, accrued vacation, benefits, property returns, internal communications, and individual meetings all require advance coordination. Employees covered by certain age-discrimination release rules may receive 21 days to consider an individual agreement, while qualifying group layoffs may require 45 days, followed by a seven-day revocation period.

“Having the hard conversation actually is compassionate,” Casey says. Early planning gives leaders more room to communicate clearly, answer employees’ immediate questions, and demonstrate the organization’s values when those values are being watched most closely.

This discussion offers business guidance for nonprofit executives, human resource professionals, finance leaders, department managers, and boards. Employment requirements vary by jurisdiction, so organizations should consult qualified legal counsel about their specific circumstances.

Key Takeaways:

 

  • Define and document the business objective before discussing employees or positions.
  • Keep performance management separate from organizational restructuring.
  • Use consistent, measurable selection criteria wherever possible.
  • Review federal and state notification requirements early in the process.
  • Coordinate severance, final pay, benefits, technology, and communications before meetings begin.
  • Treat offboarding as a visible expression of organizational leadership and values.

 

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