United Way of Greater Philadelphia and Southern New Jersey lays off 38% of its staff

United Way of Greater Philadelphia and Southern New Jersey employees showed up at a quarterly meeting on Tuesday, expecting run-of-the-mill presentations from colleagues.

Instead, their president and CEO, Bill Golderer, announced 16 people were being laid off, roughly 38% of the staff. The agenda was scrapped and the employees were told to return to their desks, where those terminated received an email informing them.

It is the latest in a series of layoffs since 2018, when the affiliate overhauled its mission to focus on eradicating poverty. The steady staff cuts have raised concerns from some employees about the future of the nonprofit. Former employees said they worry the United Way affiliate is trying to do more with less, having reduced its staff from 97 in 2018 to 26 this week.

Golderer rejected that framing and said the nonprofit finds itself at an inflection point where it is “investing in a new direction” and trying to be more efficient.

“In the past five years, we have had success in reducing our footprint in terms of [full-time employees] and driving greater community investment year over year,” he told The Inquirer.

What’s more, the United Way affiliate plans to make some new hires and will be posting “several positions in the next 30 days,” Golderer said.

The layoffs at United Way are the latest to hit the region’s nonprofit sector. Resources for Human Development, a large Philadelphia health and social services provider, kicked off the year by laying off 65 employees, citing a cash crunch, and Benefits Data Trust announced its abrupt closure this summer.

Four laid-off employees, who spoke to The Inquirer on condition of anonymity due to terms of their severance packages, said Tuesday morning was full of sad goodbyes and contact exchanges in an open-floor office where in-office staffers condensed themselves “on top of one another” so they could easily communicate about work over their low-walled, modern cubicles.

“People were just crying, even the people who weren’t laid off,” said one employee.

Before the start of the July 1 fiscal year, former employees said, the company described a less-than-ideal financial picture at an all-staff meeting, citing a $3 million operating deficit. Employees recall being told layoffs were not on the table at the time. By September, however, rumors of layoffs were making the rounds in the office, but employees said no one anticipated the cuts would be so significant.

Email access was cut off Tuesday before the laid-off employees could notify their contacts. One affected employee said the action felt disrespectful to staff as well as the organization’s partners.

What’s more, staff said the steady layoffs have been a gutting of institutional knowledge.

Former staff pointed to the results of an internal employee survey presented at the June all-staff meeting that highlighted low morale and employee concerns about the nonprofit’s future. Employees said several staffers left on their own between that meeting and Tuesday’s layoffs.

Golderer said that the layoffs were difficult, but that he hoped the adjustments would yield results for partners, such as more money flowing to communities. The organization, he said, aimed to make the transition as smooth as possible.

Originally called the Community Chest, the concept of what is the modern-day United Way was launched in 1887. Today there are more than 1,100 local United Way affiliates across 34 countries, with each choosing the causes most pertinent to its communities. The United Way of Greater Philadelphia and Southern New Jersey focuses on causes that aim to “break the cycle of poverty.” Their fundraising champions early learning, financial literacy and empowerment, training that gives people the ability to further employment and careers, and ensuring that basic needs are met for the people who need them most.

Though the organization at large has long ranked as one of the top charities in the United States, its reliance on “workplace giving” campaigns has led to declines in the number of donations affiliates take in. In the past, people have reported feeling pressured to contribute to their work’s campaign and individual donors increasingly prefer to have more of a say in the causes they contribute to. Meanwhile, larger donors have demanded more accountability and clearer goals for their dollars.

The changing habits of donors and demands for a deeper impact led to an overhaul of the local affiliate’s grant-making framework in 2018. It whittled its grant offerings to eight areas of interest that focus on poverty, down from having funded 57 types of activities before.

» READ MORE: United Way focuses on poverty, upsets groups cut out of funds

A series of layoffs followed the mission change, the most significant taking place in 2018, when the nonprofit eliminated 37 of its 97 positions. Additional layoffs have taken place in subsequent years amid the pandemic.

Where Golderer sees opportunities for efficiency, former employees see an organization that’s getting in the way of its own success.

“The people responsible for doing the actual work are being laid off,” said one employee who was let go Tuesday.

Golderer would not confirm which departments were affected, citing personnel privacy concerns, but employees said marketing, mission, and development staff experienced cuts. Fundraisers and people who help organizations navigate the application process and then help steward the awarded funds have been let go, according to former staff.

Yet Golderer pointed to the nonprofit’s successes. The United Way affiliate said in financial statements it invested more than $20.5 million in the 2023 fiscal year. The organization reported a $71.3 million endowment that same year, but Golderer said the affiliate would tap into those funds only to underwrite organizational expenses. Keeping a healthy endowment, said Golderer, is a way to demonstrate stability to donors.

“The United Way should be of service and not exist as an organization that exists for itself, but for others, and if it doesn’t exist for others, it shouldn’t exist,” he said.