Nonprofit Layoffs: Warning Signs and Next Steps

Facing a reduction in force (RIF) at a nonprofit can be a deeply emotional and overwhelming experience, especially given the personal connection employees often have to mission-driven work. Preparing for the possibility of a RIF before it happens is important. When you're clear-headed and thinking pragmatically, you can better position yourself to handle the situation with confidence and clarity, rather than reacting out of fear, hurt, or anger.

Warning Signs of an Imminent RIF

There are several common warning signs that a RIF may be on the horizon:

Budget Cuts and Financial Strain: If your organization has been dealing with budget cuts or a sudden, unanticipated drop off in revenue, leadership may begin discussing ways to reduce operational costs—often signaling staff reductions. Don't panic; a lot of nonprofits hit rough spots or have a disappointing year in terms of revenue goals. That said, do keep your antennae up.

Department Restructuring: Sudden reorganizations or departmental mergers are typically aimed at cutting costs. If your department is being restructured, the nonprofit may be looking to streamline operations, which often leads to fewer staff positions.

Leadership Changes: New leadership can bring about shifts in priorities. If several executive leaders were recently shown the door and a new executive team or board leadership arrives, there’s often a push to rethink operational efficiencies, including the workforce, which can lead to a RIF.

Hiring Freezes and Layoff Rumors: When hiring freezes are announced or promotions very suddenly are put on hold, it’s a red flag. Similarly, if layoffs are being quietly discussed among senior leaders or rumors begin to spread, pay attention.

Increased Scrutiny of Projects: If managers are heavily scrutinizing projects, staff productivity, and budgets, or if you notice a shift towards short-term goals, the organization might be preparing for difficult decisions, including workforce reductions.

What to Say if You're Let Go

Receiving the news that you’re part of a reduction in force (RIF) is a difficult experience, and how you respond can significantly impact your future interactions and job search. Here are some key points to consider regarding what to say and what to avoid:

Express Gratitude: Thank your supervisor or HR representative for the opportunity to work with the organization. Acknowledging the positives can help maintain a professional demeanor.

Ask for Clarity: Politely ask for specifics about the reasons for the RIF and how it was determined that you would be affected. Understanding the rationale can help you process the news.

Inquire About Next Steps: Ask about the logistics of your departure, including severance packages, benefits, and timelines. This shows you are interested in transitioning smoothly.

Request References: If appropriate, ask if you can count on them for a reference or letter of recommendation. This can be beneficial as you begin your job search.

Stay Professional: Maintain a calm and professional demeanor, regardless of your emotional state. While venting and making a scene may offer some appeal in the moment, a positive or even neutral demeanor will work to your benefit if you choose to pursue negotiations for more severance, extended health benefits or other assets.

What Not to Say if You're Let Go

Avoid Blame: Refrain from blaming individuals or the organization for your situation. Expressing anger or frustration can lead to a negative negotiating environment and burn bridges. It's a small world in the nonprofit sector and people can have long memories.

Don’t Make It Personal: Avoid personal comments or emotional outbursts. Focus on the professional aspects of the conversation. Again, consider your future needs and don't burn bridges that can serve you later.

Steer Clear of Ultimatums: Don’t threaten legal action or ultimatums. This can create a hostile atmosphere and may affect your severance package or future interactions. That's not saying you cannot or should not seek legal counsel to review your severance package and situation; you just don't need to raise a threat in this emotionally charged moment.

Don’t Badmouth the Organization: Speaking negatively about the nonprofit or its leadership can damage your professional reputation and references.

Avoid Questions About Future Layoffs: While it’s natural to be curious, asking about the possibility of future layoffs can be seen as unprofessional or speculative.

The conversation surrounding a RIF requires a delicate balance of professionalism and emotional intelligence. By focusing on gratitude, clarity, and future steps while avoiding blame and negativity, you can help ensure a smoother transition and maintain your professional integrity as you move forward in your career.

What You’re Entitled To When You've Been RIF'd

Knowing your rights can help you advocate for yourself if a RIF affects you:

Severance Pay: While nonprofits aren’t required by law to provide severance, many do. Severance packages are often calculated based on years of service. Review your employee handbook to understand what your organization offers.

Unused PTO: You may be entitled to payment for any unused vacation or paid time off. This varies by state and organization, so verify the specifics with HR.

Retirement and Pension Plans: If you’re vested in your nonprofit’s retirement plan, such as a 403(b), you’ll retain access to your contributions and the employer match. Be sure to ask how your retirement savings will be handled.

Health Benefits: Through COBRA, you can typically extend your health insurance for up to 18 months, although you may have to cover the cost. Some nonprofits might offer to cover COBRA premiums for a period as part of your severance.

What You Can Ask For

It’s important to advocate for yourself during the RIF process. Here’s what you can negotiate:

Extended Severance: If you’ve been with the organization for many years or are in a senior role, request an extended severance package, especially if you anticipate a longer job search.

Health Benefits Extensions: Ask if the nonprofit will continue to cover your health insurance premiums for an extended period. This can be particularly important if you have ongoing medical needs.

Outplacement Services: Many organizations provide job search support, such as career counseling, résumé writing, and job placement services. If your nonprofit isn’t offering this, ask for it.

Written References: Request a written letter of recommendation or confirmation that your job was terminated due to restructuring, not performance. This can be valuable during your next job search.

What You Can Negotiate

In addition to asking for standard benefits, there are other areas where you might negotiate:

Job Search Time Off: If you’re given advance notice before the layoff, request time off to attend interviews and pursue job opportunities while still on payroll.

Non-compete Clauses: If your contract includes a non-compete clause, negotiate to either reduce its scope or eliminate it altogether to avoid hindering future job prospects.

Timing of Departure: If you are close to becoming eligible for certain benefits, such as a pension vesting or bonuses, you can negotiate to stay on payroll longer to reach these milestones.

Equity or Bonuses: If you have unvested stock options or are eligible for a bonus, ask for accelerated vesting or a prorated bonus to ensure you receive what you’re owed.

Considerations for Protected Classes

If you’re a member of a protected class (e.g., age, race, disability, gender identity), you have additional legal rights under federal law. Here are a few steps you can take:

Request a Written Reason for Termination: You have the right to ask for a formal explanation of why you were let go, which can help determine whether any discriminatory practices were involved.

Demographic Data: If you suspect discrimination, request demographic data about who else was laid off. This could provide insight into whether the layoffs disproportionately affected members of protected classes.

Reasonable Accommodations: If you have a disability, you can ask for reasonable accommodations during the RIF process, such as additional time to transition or job placement assistance.

Negotiate Additional Benefits: If you belong to a group that faces greater barriers in the job market (e.g., older workers), you may have a case for negotiating extra severance or healthcare coverage.

Outplacement Services: Those in protected classes may face unique challenges when re-entering the workforce. Outplacement services that include job search coaching can be especially helpful.

Losing your job is an emotional and stressful experience, especially in the nonprofit sector. However, preparing yourself before any signs of a RIF become evident can help you approach the situation with clarity. Knowing your entitlements, advocating for yourself, and understanding your legal rights—particularly if you’re in a protected class—can make the process smoother and will help you transition to new opportunities with confidence.

Now What?

Receiving news that you're part of a reduction in force can evoke all manner of emotions, and it’s so very important to allow yourself time to process these feelings. When you get home, be your own best friend and look for positive ways to soothe your spirit. Feeling bereft? A good cry helps release some of the pent-up tension. A good workout has the same effect. Maybe you reward your restraint and courage in handling the news with a little retail therapy or a weekend get-away. Whatever your approach, remember that it’s okay to feel a mix of emotions, and giving yourself permission to experience them is vital to healing and moving forward.

The day after a layoff, take a gentle approach with yourself. While it’s essential to acknowledge your feelings, it’s also time to make a plan. Start by updating your resume and ensuring it reflects your skills and accomplishments. Activating your network can open doors to new opportunities, so reach out to colleagues, friends, and mentors for support and guidance. Reflect on your career path: Are you still on the right track, or is this a chance to explore new avenues, such as going back to school or transitioning into a different field?

Remember, you’re not alone. Many people have been let go or experienced a RIF at some point in their careers. A headhunter once shared that very few employers hold it against a candidate for hire; layoffs happen for numerous reasons that often have nothing to do with individual performance.

Embrace this moment as an opportunity for growth and renewal as you move forward into the next chapter of your professional journey.

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