The Raise You Can't Give

This week:

• A New Haven childcare center that started buying houses so its teachers would stop leaving over rent,
• A Newark United Way that talked a corporate foundation into opening investment accounts for a hundred nonprofit employees,
• Two states that made a benefit permanent this year that your staff may already qualify for without your spending a dollar,
• Three quick hits on two employee benefits that became permanent this year and cost less than the equivalent raise, the Medicare notice that has to be in your staff's hands before October 15, and the retirement-plan signature due before the year ends,
• Three AI prompts to price the compensation you could offer without a raise, write the pay ranges your state may soon require you to publish, and find the benefits you are already paying for that nobody uses, plus
• A 30-minute board exercise that starts with a blank sheet of paper, and a note from me on what I learned pricing my own work.

Start with the number, because the number is the whole problem.

In early 2025 the Nonprofit Finance Fund asked nonprofit leaders a simple question: can you pay all of your full-time staff a living wage? Of the 2,206 organizations that answered, 41 percent said yes. Among organizations running on less than $250,000 a year, 28 percent said yes.

Two honest caveats before that number goes into anyone's board deck. Respondents were describing 2024, not today. And NFF says plainly that it used a nonprofit-probability method — leaders who heard about the survey and chose to answer — so this is a large self-selected sample rather than a projectable estimate of the sector.

It is still the best available answer to the question, and the answer is unbelievably bad.

Here is the redefinition this issue is built on. Most of us treat that as a fundraising problem — if we could raise more, we could pay more, so the answer is to raise more.

But the organizations in this issue did not out-raise anyone. They looked at compensation and noticed something that had been true the whole time: a paycheck is one delivery mechanism for value, and it is the most expensive one you have.

Every dollar you move through payroll is taxed on both sides, disappears the month it arrives, and has to be raised again next year. It is the highest-friction way to give someone something.

So three organizations gave people something else. One started buying an asset and letting staff live in it. One got somebody else to fund it. Two states found the money was already appropriated and wrote their childcare workforce into the eligibility rules.

None of them raised a salary. All of them changed what the job is worth.

A New Haven Childcare Center Started Buying Houses Because It Could Not Win a Bidding War for Teachers

Friends Center for Children in New Haven, Connecticut has a problem every childcare operator will recognize. Early-childhood teaching pays badly, the work is hard, and every teacher who leaves takes a relationship with a two-year-old with her.

The obvious fix is to pay more. Friends Center could not pay more — not sustainably, not against a school district or a hospital.

So it started acquiring housing and giving it away.

The initiative began in 2020 and 2021 with two houses. Two supporters of the organization, Greg Melville and Susan Fox, gave $750,000, and the center used it to buy the dwellings.

Then it went looking for a builder and found one that charges nothing. The Yale School of Architecture runs the Jim Vlock First Year Building Project, a studio in which every first-year graduate student designs and builds a real structure as coursework.

Friends Center became the client. The organization committed to five new homes through the program; three are finished, the fourth is due this fall, and the fifth the year after.

Read that again, because it is the part most readers will skip. A university architecture program needed a building site for its curriculum. A nonprofit needed a building. The construction labor was free because it was already somebody's homework.

Shelterforce, which published the most detailed account of the program this month, reports the center now holds six homes providing twelve housing units, offered to staff rent-free, with the Yale-built homes each designed to accommodate two to four teachers and their families. It puts eligibility at annual earnings of $38,500 or less for one adult, $64,000 or less for one adult with children, and $79,000 or less for two adults with children.

Residents also work with a financial coach on credit, savings, and eventual homeownership — the housing is meant as a launching pad, not a permanent arrangement.

Executive director Allyx Schiavone values a unit at roughly $23,000 a year in compensation, and the twelve units together at something like $276,000 a year. Those are the organization's own figures, not an audited number. By 2028 the center aims to house 24 teachers, about 30 percent of its staff.

Here is the arithmetic that makes this worth reading rather than admiring. Twenty-three thousand dollars delivered as salary is gone on December 31 and has to be raised again in January. Twenty-three thousand dollars delivered as housing sits on the balance sheet as an asset, and it is worth more to the teacher than the same money in wages, because she owes no income tax on a place to sleep.

The same expense, routed differently, buys the organization a durable asset and the employee a larger benefit.

Friends Center is not alone in the mechanism, only in the scale. Martha's Vineyard Hospital in Oak Bluffs, Massachusetts built 48 units of staff housing — 76 bedrooms — in Edgartown, using modular units manufactured near Pittsburgh, trucked to New Bedford, barged to the island, and craned into place. Residents began moving in during the summer of 2025. The hospital's chief administrative officer has said the project traces back to an internal staff survey, run around 2020, that found close to half of employees experiencing housing insecurity.

One honest note on evidence. Both organizations describe recruitment and retention benefits, and Martha's Vineyard reports a waiting list. Neither has published a before-and-after turnover rate, and I am not going to invent one for them. What is documented is the model, the cost, and the fact that two organizations at opposite ends of the budget range arrived at it independently.

Here is what makes this replicable, and it does not require six houses. Start with the survey Martha's Vineyard ran, because it is free: ask your own staff, anonymously, what share of them are housing-cost-burdened, doubled up, or thinking about leaving the area. You will either learn that this is not your problem, which is worth knowing, or you will have the "before" number every subsequent conversation needs.

Then ask who near you already builds. An architecture program, a trades high school, a Habitat affiliate, a congregation sitting on a parsonage nobody has lived in since 2009. The asset you cannot afford to build is often one somebody else is looking for a reason to build.

Sources: Shelterforce, August 20, 2026 — "To Keep Childcare Affordable, This Center Offers Care Workers Free Housing"; Friends Center for Children — Teacher Housing Initiative; Yale School of Architecture — Jim Vlock First Year Building Project; Healthcare Design, July 24, 2026 — Martha's Vineyard Hospital staff housing​

A Newark United Way Talked a Corporate Foundation Into Opening Investment Accounts for a Hundred Nonprofit Employees

Friends Center paid for its own answer. The United Way of Greater Newark did something harder and, for most readers, more copyable: it got somebody else to pay.

The Newark Nonprofit Wealth Project gives one hundred nonprofit employees in the city $1,500 apiece. The money does not arrive as a check. It is released in five $300 installments as participants complete financial-learning milestones, into an account on Stackwell — a Black-owned investing platform — where it is invested in exchange-traded funds tracking major indexes.

The installment structure is the design. A $1,500 bonus is spent. A balance that grows in front of you as you work through a year of financial coursework is a habit, and the habit is the thing being funded.

The money came from the Prudential Foundation, which is headquartered in the same city — worth naming, because the funder's local interest is part of why this worked and part of what a reader would have to reproduce. The United Way's role was convener rather than funder: it assembled the case, brought the corporate partner and the platform together, and recruited the participating organizations.

The partners put the total at about $500,000 including a research component, though they declined to break out how much went to research and fees. The program drew nearly twice as many applications as it had slots, which were filled first-come, first-served.

United Way president and CEO Catherine Wilson has been explicit about why this shape and not a raise. Nonprofit salaries are low and are not about to stop being low. What nonprofit employees are missing is not only income but assets — the thing that turns a job into a foundation.

The organizations say the program will expand this fall to roughly 6,000 participants, adding Atlanta and United Way affiliates in the Bay Area, Southeast Louisiana, Southeastern Michigan, and Tulsa. That is a stated plan for a fall that has not happened yet, and it comes from the partners themselves.

Notice what the United Way had that no single nonprofit has. A financial-services company will not open brokerage accounts for the eleven employees of your organization. It will consider doing it for a thousand employees across forty organizations in a city where it has a headquarters and a community-reinvestment interest.

That is the transferable asset here, and it is not money. It is aggregation.

Here is what makes this replicable. If you are one nonprofit, you cannot run this. If you are five nonprofits in the same city who already sit on each other's committees, you can — and the ask is not charity, it is a partnership with a business case attached.

Survey your combined staff on financial health first, so the ask arrives with evidence. Then approach the sector nearest your problem: a bank, a credit union, an insurer, a hospital system. And bring your state association or community foundation in as the convener, because somebody has to be the entity that is not asking on its own behalf.

If you sit on a board, this is the specific proposal to put on an agenda this fall.

Sources: The Chronicle of Philanthropy, August 27, 2026 — "Nonprofit Salaries Are Low. Could $1,500 Investment Accounts Help?"; Stackwell and United Way of Greater Newark launch announcement, November 12, 2025; United Way of Greater Newark​

Two States Just Made Free Childcare for Childcare Workers Permanent. Most Eligible Staff Have No Idea.

The third version of this move costs the employer nothing, because the money is already appropriated.

Every state runs a childcare subsidy program to help low-income families afford care. The eligibility test is household income, and it disqualifies a great many childcare workers by a few thousand dollars — which produces the sector's most absurd outcome, a teacher who spends her day caring for other people's children and cannot afford care for her own.

Kentucky fixed that first. Since October 2022, anyone working twenty or more hours a week at a licensed childcare center or a certified family childcare home has qualified for the state's childcare subsidy regardless of household income — and not just teachers. Kentucky's version covers everyone on staff at a center-based program: administrators, cooks, early-intervention specialists.

That program had been running on a regulation. On April 14, 2026, House Bill 6 became law without the governor's signature and made it permanent, and it added a category that had been missing — the owners and operators of family childcare homes, who had been running eligible workplaces without being eligible themselves.

Iowa followed in April. Governor Reynolds signed House File 2514 on April 9, making Iowa's pilot permanent effective July 1 and extending assistance to households where a parent works at least 32 hours a week in the childcare field, regardless of income.

Other states run versions of this, and it matters that they are not all the same thing. Maine's is a stipend — up to $330 every two weeks for staff at any licensed childcare program. Massachusetts and Rhode Island raised the income ceiling for childcare workers rather than removing it: Massachusetts caps eligibility at 85 percent of state median income, Rhode Island at 300 percent of the federal poverty level. If you are reading a national roundup that lumps these together as "a dozen states," check which kind your state actually has, because the answer changes who on your staff qualifies.

On results, be careful with the number you will see quoted. Iowa's health and human services agency reports that 87 percent of participants "indicated that the Pilot encouraged their continued employment in child care." That is a survey question about intent, not a measured retention rate — no sample size published, no comparison group. It has been repeated in the press as "87 percent stayed in their jobs," which is not what it says. Do not put that version in a grant application.

And these programs are not permanent by nature. Washington closed its expansion to new applicants and reauthorizations on July 1, 2025 in a budget shortfall. A benefit that exists by appropriation can stop existing by appropriation, which is an argument for enrolling your staff now rather than next year.

Here is what makes this replicable, and it is unusually simple. If you run a licensed childcare program, a Head Start, or a family-services organization, find out this week whether your employees are categorically eligible for your state's childcare subsidy, and if they are, tell every one of them. Put it in the job posting. "Free childcare for your children" is the strongest sentence many of these organizations could put in a hiring ad, and some of them are not saying it because nobody in the building has read the eligibility rules since they changed.

If your state does not do this, you now have a policy ask with Kentucky's four-year record behind it and a state association that can carry it.

The broader instruction runs well beyond childcare. Somewhere in your state's code is a benefit your workforce category already qualifies for. Loan repayment for clinicians in shortage areas. Tuition waivers for public-service employees. Transit subsidies. Nobody sends you a letter when you become eligible.

Sources: Kentucky General Assembly — 2026 RS House Bill 6; Center for the Study of Child Care Employment, Berkeley — The Kentucky Model; Iowa Capital Dispatch, April 9, 2026 — Governor signs law extending aid for child care workers; Iowa HHS — Investing in Iowa's Child Care System; Washington DCYF — 2025–27 state budget impacts on early learning​

Two Benefits Became Permanent This Year and Both Beat a Raise on Cost

Two provisions changed for good in 2026, and between them they let a nonprofit hand an employee real money at a lower cost than the equivalent salary increase.

The first is educational assistance under Section 127. (Section references in this issue are to the Internal Revenue Code — the federal tax code.) Since March 2020, employers have been able to use it to pay down an employee's student loans, not just tuition — but that authority was scheduled to lapse at the end of 2025. It is now permanent for payments made after December 31, 2025, and the $5,250 annual exclusion becomes inflation-indexed for tax years beginning after 2026, which means the first adjusted figure appears in 2027. The cap is $5,250 for 2026, and it is a combined cap: tuition and loan payments share it rather than each getting their own.

The second is dependent care assistance under Section 129. The cap rose from $5,000 to $7,500 for tax years beginning after December 31, 2025. It is permanent, and it is not indexed, so its value erodes from here.

Why these beat a raise on cost: up to the $5,250 ceiling, a Section 127 payment is excluded from the employee's income and from Social Security and Medicare tax on both sides. A raise is taxed on both sides at every dollar. The employee nets more from the first and it costs you less. Anything you pay above $5,250 is ordinary wages and is taxed like wages — the exemption is capped, not open-ended.

Action: Four steps. Ask your payroll provider or benefits broker whether you have a written Section 127 plan document. Most nonprofits do not, and the statute requires a separate written plan; the IRS published a modified sample plan document alongside its April 2026 guidance, so this does not need to be expensive.

Ask the same question about your dependent care plan, and confirm it has been amended to the new $7,500 limit — the higher cap does not reach your employees until your plan document says it does.

Then ask your staff which they would rather have. The answer varies enormously by age, and asking is free.

While you are in the file, note two smaller 2026 changes: the qualified bicycle commuting reimbursement was permanently repealed for tax years beginning after 2025, and the monthly parking and transit exclusions are $340 each for 2026.

ROI: For one employee taking the full $5,250 as loan repayment, the employer-side payroll tax avoided runs roughly $400, and the employee typically nets several hundred to well over a thousand dollars more than from a raise of the same gross size. Multiply by however many people on your staff carry student debt.

Time: 45 minutes to make the calls; longer if you decide to adopt a plan.

Sources: 26 U.S.C. § 127; 26 U.S.C. § 129; IRS Fact Sheet 2026-10 — updated FAQs on section 127 educational assistance programs; IRS Publication 15-B (2026)​

Get the Medicare Part D Notice Into Your Staff's Hands Before October 15

If your organization offers prescription drug coverage, you are required to tell Medicare-eligible employees, spouses, and dependents each year whether that coverage is "creditable" — good enough that they can skip Medicare Part D without a permanent penalty. CMS requires the notice prior to October 15, ahead of Medicare open enrollment. Before, not by.

This year it is not a copy-and-paste job. In a final rule issued April 2, 2026 and published at 91 FR 17384 on April 6, CMS retired the original 2009 simplified determination method. For plan years beginning in calendar year 2027 and after, sponsors must use either a full actuarial determination or a revised simplified standard under which the plan must be designed to pay, on average, at least 73 percent of participants' prescription drug expenses.

The old simplified test sat at 60 percent. That is a real move, and it is why the answer you got last year does not settle this year's notice. Ask rather than assume.

The stakes for the employee are permanent. Someone who goes 63 days or more without creditable drug coverage and enrolls later carries a surcharge added to their Part D premium for as long as they have the coverage.

Action: Email your carrier, pharmacy benefit manager, or third-party administrator today with one question in writing: is our prescription drug coverage creditable for the 2027 plan year, and under which determination method?

Pull the current model notice from the CMS creditable coverage page, populate it, and distribute to all plan participants — you can send it to everyone rather than trying to work out who is Medicare-eligible — so it lands on or before Tuesday, October 14, 2026.

Then calendar the separate online disclosure to CMS, due no later than 60 days from the beginning of your plan year, which is March 1, 2027 for a calendar-year plan.

ROI: The determination itself is free — your carrier or PBM does it. A broker or actuary billing this work runs several hundred dollars. The real value is not being the employer who told three people their coverage was creditable when it was not.

Time: 45 to 60 minutes, half of it waiting on the carrier's reply.

Sources: CMS — Creditable Coverage; Federal Register — Contract Year 2027 Medicare Advantage and Part D final rule, 91 FR 17384 (April 6, 2026); Medicare.gov — Part D late enrollment penalty​

Get Your 403(b) Amendment Signed Before December 31

The SECURE Act, SECURE 2.0, and the CARES Act all changed how retirement plans work, and sponsors were given a long runway to update their plan documents to match. Under IRS Notice 2024-2, that runway ends December 31, 2026 for qualified plans and ERISA-covered 403(b) plans.

Two exceptions worth knowing before you panic or relax. Collectively bargained plans have until December 31, 2028. Governmental plans — including governmental 457(b)s — generally have until December 31, 2029. If you are a private 501(c)(3) with a 403(b), which is most readers of this newsletter, your date is this December.

The IRS did extend the deadline by a year, to December 31, 2027, in Notice 2026-9. That notice reaches IRAs, SEP arrangements, and SIMPLE IRA plans and nothing else. It does not cover your 403(b) or your 401(k).

Almost every nonprofit assumes the recordkeeper handles this. The recordkeeper usually prepares the document. Somebody at your organization still has to sign it, and an unsigned amendment sitting in an inbox is a plan document failure.

Second item while you are in there: the final IRS regulations requiring certain high earners' catch-up contributions to be designated Roth apply to tax years beginning after December 31, 2026. Your January 2027 payroll has to handle it, and the statutory requirement is already live under a good-faith standard.

Action: One email to your recordkeeper or third-party administrator: "Please confirm in writing that our SECURE 2.0 amendment or restatement will be executed on or before December 31, 2026, and send me the signature-ready document."

Sign it. Put the executed copy, with a dated signature page, in the plan file — not in an email thread.

Then one email to payroll: confirm the system can identify participants whose prior-year Social Security wages exceed the Roth catch-up threshold and route their catch-up contributions to Roth beginning with the first 2027 payroll.

ROI: A missed plan-document amendment is generally correctable only through the IRS Voluntary Correction Program, which carries a user fee plus counsel time — call it several thousand dollars, against two emails now. Caught on audit instead of self-corrected, the theoretical remedy is plan disqualification.

Time: 30 minutes of your time. The work belongs to your vendors.

Sources: IRS Notice 2024-2; IRS Notice 2026-9; Federal Register — Catch-Up Contributions, T.D. 10033 (September 16, 2025)​

Price the Compensation You Could Offer Without Giving a Raise

Most organizations have never costed the alternatives to a raise, which means the comparison that would actually drive the decision has never been drawn. This prompt draws it.

Act as a nonprofit compensation and benefits analyst. My organization is [organization name and URL], with [number] employees and an annual budget of about [$]. Our worst retention problems are in these roles: [list roles, current pay, and how long the last three vacancies took to fill]. We operate in [state(s)]. We currently offer these benefits: [list everything, including the ones you think nobody values]. We have roughly [$] of unrestricted annual capacity we could redirect toward compensation. Build me a costed menu of non-wage compensation options this organization could realistically adopt within twelve months. For each option give me: the mechanism, the annual cost to the employer, the after-tax value to a typical employee earning [salary], whether it requires a written plan document or board action, the lead time to stand it up, and any legal or tax question I would need professional advice on. Include at minimum: employer student loan repayment under Section 127, dependent care assistance under Section 129, employer-provided or employer-arranged housing, transportation and transit benefits, additional paid leave, compressed or flexible schedules, professional licensure and continuing education costs, and any state-funded benefit our employee category may already be categorically eligible for in [state]. Rank the menu by after-tax value delivered per employer dollar spent, and tell me which three you would do first and why. Flag anything you are uncertain about rather than guessing, and tell me which figures I need to confirm with a tax adviser before relying on them.

The ranking is the output that matters. Organizations routinely discover that two or three of the cheapest options deliver more felt value than a 3 percent raise, and that they have been arguing about the 3 percent for years.

Write the Pay Ranges Before Your State Requires Them

Pay transparency law is moving toward smaller employers. Virginia's requirement took effect July 1, 2026 with no employee-count threshold at all, and it reaches internal postings for promotions and transfers, not only public job ads. Maine's followed on July 29, 2026 for employers with ten or more employees. Delaware's arrives September 26, 2027 for employers with more than 25.

The compliance work is easy. The uncomfortable work is what you find when you write the ranges down and look at who currently sits where inside them.

Act as a compensation consultant advising a nonprofit. My organization is [organization name and URL], with [number] employees in [list every state where an employee works, including remote workers]. Here are our current positions, years in role, and salaries: [paste, anonymized if you prefer — Employee A, B, C]. Here is any benchmarking we have: [paste, or say you have none]. First, tell me which pay transparency and salary history laws currently apply to us given those states, with effective dates, employer-size thresholds, and what each requires in a posting — and where the law is genuinely unsettled as to remote employees, say so rather than guessing. Second, draft a defensible salary range for each position, showing minimum, midpoint, and maximum, with the reasoning for each. Third, and most important: run an internal equity check. Identify every incumbent sitting below the minimum of their own role's range, every case where a newer employee out-earns a longer-tenured one in the same role, and any pattern in who those people are. Give me a prioritized remediation list with estimated cost. Fourth, draft the plain-language paragraph I will need when staff ask how the ranges were set, which they will. Do not give me legal advice — give me the questions to take to counsel.

Run the third element before you publish anything. Publishing ranges without fixing what they reveal is how a compliance exercise becomes a grievance.

Find the Benefits You Are Already Paying For That Nobody Uses

Almost every organization is paying for benefits with near-zero uptake — an employee assistance program nobody has called, a tuition benefit nobody has claimed, a flexible spending account four people opened. That spending is a raise you already gave and nobody received.

Act as a nonprofit benefits administrator. My organization is [organization name and URL], with [number] employees. Here is every benefit we offer, with annual employer cost and current enrollment or utilization where I have it: [list — include EAP, FSA/HSA, retirement plan match, tuition or educational assistance, transit, life and disability insurance, wellness programs, professional memberships, anything else]. Here is what I have no utilization data for: [list]. First, for each benefit, tell me what a typical utilization rate looks like for an organization our size, what specific data I should request from each vendor to measure ours, and the exact question to ask to get it. Second, identify which of these benefits are most commonly paid for and unused in small nonprofits, and the usual reason — poor communication, a bad enrollment window, an access barrier, or genuine mismatch with the workforce. Third, for each benefit that looks underused, tell me whether it is a communication problem or a design problem, and give me a specific fix for each; these need different responses and organizations routinely apply the wrong one. Fourth, tell me what I could buy with the money currently going to benefits nobody uses. Give me a one-page summary I can hand to a finance committee.

The distinction in element three is worth the hour on its own. A benefit nobody uses because nobody knows about it is a $200 email fix. A benefit nobody uses because it does not fit the people who work here is money you should stop spending.

The Offer Letter — A 30-Minute Board Exercise

Overview. Boards approve compensation in aggregate — a salary line, a benefits line, a percentage increase. Almost no board has ever seen what an individual employee actually receives, which means the board's picture of "what we pay people" is a number rather than an offer. This exercise puts the real offer on the table, finds the parts of it nobody communicates, and ends with one thing added or one thing said out loud. It needs no preparation from staff and no budget.

Materials. A whiteboard or shared screen with two columns. A printed list, held by the executive director and not circulated in advance, of everything a new employee at your organization actually receives — every benefit, stipend, allowance, leave category, flexibility policy, professional development budget, and anything else with value, whether or not anyone uses it.

How to run it (30 minutes).

1. Write the offer from memory (7 minutes). Every board member, working alone and silently, lists everything they believe a new full-time employee receives besides base salary. No conferring. Collect the lists.
2. Build the composite (5 minutes). Put every item anyone named into the left column. Do not sort or judge yet. Note how many members named each item — the ones only one person remembered are the interesting ones.
3. Read the real list (5 minutes). The executive director now reads the actual list. Put anything the board missed into the right column. Expect the right column to be longer than anyone anticipated, and expect at least one item that surprises the ED too.
4. Ask the two questions (8 minutes). For everything in the right column the board did not know about: do our own employees know this exists? For everything the board named that turned out not to exist: did we think we offered that because we should? Both columns are useful. The first is a communication failure with a cheap fix. The second is a map of what the board believes the organization owes its people.
5. Commit to one thing (5 minutes). Pick either one benefit that exists and is not communicated, or one item from the board's imagined list worth actually adding. Assign an owner and a date inside 45 days. One item, one owner, one date.

In-person: Use paper for step one and physically collect it before anyone speaks; the silent independent listing is what makes the gaps visible.

Virtual: Have members type their lists privately to the facilitator rather than to the group, then share the composite.

Watch out for: Two failure modes. The first is the exercise sliding into a debate about whether salaries are high enough. That is a real conversation and it is not this one — park it visibly and schedule it. The second is treating the ED's list as a report card. Nobody designs a benefits package on purpose; it accretes across a decade of separate decisions, and this may be the first time anyone has read it in one sitting.

You'll know it worked when: an employee mentions, within two months, a benefit they did not know they had.

What I Learned Charging for This

Last week I closed the paid tier of this newsletter and told you about it here.

What I did not tell you is what the year of running it taught me, because I was still working it out. I think I have it now, and it belongs in this issue.

When I set a price on this thing, I was answering a question about value: what is a weekly issue worth to a nonprofit leader?

That is a reasonable question. It is also, I now think, the wrong first question.

The right first question is: what does this cost the person receiving it, and what else could they have gotten for the same cost?

Those sound like the close to the same question. They are not. The first one is about me. The second one is about the reader's budget, the reader's attention, the reader's Wednesday morning.

I spent a year optimizing the first one.

I raise it because the same substitution happens inside nonprofits constantly, and I have watched it happen in rooms I was sitting in. A board asks what should we pay this position? and works very hard on the answer.

The better question — the one that opens options rather than closing them — is what would make this job worth staying in, and which of those things can we actually deliver?

Sometimes the answer is money and there is no substitute. I want to be careful here, because "we can't pay you what you're worth but we have a great mission" is one of the more corrosive sentences in this sector. Housing does not pay for a divorce lawyer. Free childcare does not cover a parent's assisted living. There are things only cash does.

But the organizations in this issue found real answers that were not cash, and they found them by asking the second question instead of the first. A childcare center in New Haven did not ask what its teachers were worth. It asked what its teachers needed, and then looked at what it could build, borrow, or be given.

That is a different kind of work than fundraising. It is closer to scavenging, and I mean that admiringly. It requires knowing your community well enough to see what is sitting unused in it.

Here is the part I keep returning to. Every one of these organizations had to be willing to look slightly odd. A childcare center that owns real estate looks like a childcare center with a governance problem, right up until you see the balance sheet. A United Way that convenes brokerage accounts is doing something no line in its budget describes.

If your answer to a compensation problem sounds entirely normal, it is probably a raise you cannot afford. If it sounds a little strange, you may be onto something.

So here is the ask, and it is the same one as last week because it worked. Forward this issue to one person — a person with a name, someone you can picture reading it. The executive director who lost two people this summer and does not know what to do differently. The board chair who thinks the answer is a compensation study.

And if someone forwarded this to you: sign up here. It is free, it arrives Wednesdays, and that is the whole arrangement.

Then hit reply and tell me the strangest thing your organization has ever given an employee instead of money — whether it worked or not. I read every reply myself, and the ones that did not work are usually more instructive than the ones that did.

Three moves, one shape. A childcare center looked at a salary it could not raise and started buying buildings instead. A United Way looked at a benefit no single nonprofit could buy and assembled forty of them into a customer worth serving. Two legislatures looked at a subsidy rule that excluded the workforce delivering the service and wrote in an exception.

None of them raised a wage. All of them changed what the job pays.

That is worth naming as a strategy, because it inverts the sequence most organizations follow. The usual order is: decide what we can afford, offer that, lose people, repeat.

The better order starts one step earlier. Ask what people actually need. Then ask who else has a reason to provide it — a university with a curriculum to teach, a bank with a community obligation, a legislature that already appropriated the money.

Your compensation budget is not the only budget that can pay your people. It is only the one you control, which is why it is the one you look at.

So run the survey. Ask your staff, anonymously, what is hardest about their life outside this building. Then take that list to somebody who is not you.

The people who left for eight thousand dollars more rarely left for the money alone. They left because the money was the only lever anybody pulled.

See you next week.

— Ted

P.S. One forward. One name in a reply. That does more for this newsletter than a subscription ever did.

Founder and CEO Risk Alternatives, LLC 202.758.7572 (cell) ​Website​ Author of ​​Managing Your Nonprofit for Resilience​​​ I help nonprofits thrive by providing practical tools and support to address uncertainty and improve resilience.

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