At Resources for Human Development, CEO is out as nonprofit contends with cash crunch and layoffs
RHD, a Philadelphia human services nonprofit with operations in 13 states, laid off 65 employees in late January. More job cuts are expected.
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Resources for Human Development, a large Philadelphia health and social services provider, replaced its CEO with a trio of senior executives last week, after the nonprofit laid off 65 people in late January in the face of a steep loss expected in the financial year that ends June 30.
Marco Giordano’s last day as CEO was March 13, according to an internal announcement sent last Thursday from board chair Marvin Levine.
Giordano had been CEO since 2017. A 17-year veteran of the organization, he was RHD’s chief financial officer before being promoted to CEO.
Levine’s note did not address RHD’s financial duress, and RHD officials did not respond Tuesday to a request for an interview on its financial condition. RHD had $308 million in revenue in fiscal 2023 from programs in more than a dozen states, but like many smaller human services nonprofits has very little cash cushion to sustain its operations during difficult times.
Giordano said in a Feb. 2 employee town hall that layoffs were necessary because a projected $6.7 million operating loss for fiscal 2024 had ballooned to $8 million after a poor financial performance in the last three months of last year.
The organization had a $3 million loss in fiscal 2023.
The biggest problem involved administration and back-office services used by all of RHD’s programs, Giordano said in the presentation available on YouTube. That ran a deficit in the range of $6 million to $7 million, he said. The job cuts were expected to save $3.5 million annually.
“You could say we’re halfway there,” Giordano said.
More layoffs are expected.
RHD’s administrative and back-office staff at RHD increased 25%, to 250 employees this year from 200 in 2019, current CFO Deanna Cerwin said during the February meeting. “The growth of our organization did not match that,” she said.
RHD’s large presence in Philadelphia includes health clinics, services for people with intellectual and developmental disabilities, addiction treatment, and social services.
It employed more than 5,000 in 2021, its most recent 990 tax return says.
Pennsylvania accounted for $212 million, or 73%, of RHD’s program revenue in the year ended June 30, 2022.
The RHD chair’s announcement said that Cerwin, chief legal officer Stephanie Pompey, and chief human resources officer Roy Day would take on Giordano’s responsibilities.