The Salary Cap That Doesn’t Exist

More than 17,500 people fall into homelessness for the first time every week in this country. The workers who help them find their way out earn wages that make it hard to stay in the job. Now the federal government is proposing to cut nearly a billion dollars from the programs that fund that work. The people closest to the crisis are being squeezed from every direction.

The nonprofit sector runs on mission. But it is sustained by people, and right now, the people are leaving.

Nonprofit workers coordinate housing for families in crisis, support survivors as they rebuild their lives, and ensure public dollars are used responsibly. They carry caseloads that would overwhelm a corporate team, navigate complicated rules, respond to trauma daily, and hold programs together through moments most people never see. Many workers are a few paychecks away from housing instability.

Here is something most people do not know, including many nonprofit leaders: there is no salary cap on nonprofit work.

Organizations that receive government funding widely believe the government limits what they can pay their staff. That belief shapes budgets, salary conversations, and hiring decisions across the sector. But it is not accurate. Federal rules require that pay be reasonable and consistent with what similar organizations offer for similar work. That is a standard of fairness, not a ceiling. Under 2 CFR 200.430, compensation must be reasonable and consistent with what similar organizations pay for similar work. That is a reasonable standard, not a ceiling. The regulation does not prohibit wage increases. It does not set a maximum. It requires documentation and justification, both of which responsible organizations produce routinely.

The salary cap lives in assumption, not in law.

So why do wages stay low? Because the system sustains itself. Funding administrators develop salary guidelines based on surveys of what nonprofits already pay. Those surveys reflect a sector where wages have always been low. The result is a loop: guidelines stay modest because the data is modest, and the data stay modest because no one questions the guidelines. Nobody designed this to be exploitative. But the effect is the same.

Inside organizations, the same problem takes a different form. When workers raise concerns about pay, a common response is that raises must apply equally to everyone in the name of equity. The intention sounds reasonable. But equity does not mean treating every situation identically. A worker who manages crisis cases, tracks federal compliance, and absorbs other people's trauma every day is carrying something different than a colleague in a lower-stakes role. Applying the same flat adjustment to both is not fairness. It is a way of avoiding a harder conversation.

I know this from personal experience.

During the pandemic, Los Angeles City launched Project Safe Haven, an emergency program that placed victims of domestic violence in hotels and ran them as full shelters. What was meant to keep people safe at home exposed a more dangerous reality for many. The calls we received were more desperate, more aggravated, and more lethal. Clients needed help from the moment they fled, through intake, case management, peer counseling, and eventually finding permanent housing. Many had children. The work did not stop.

I ran that program for my region. Alone. While keeping up with my existing job. Other agencies staffed teams for this work. I built the process myself, onboarded clients, conducted assessments, and provided counseling. Working from home during a crisis made it hard to draw any line between work and everything else. I felt like I was going to have a nervous breakdown every day.

The funder secured a stipend for everyone working on the project. For managers, that was $1,000 a month. I ran the program for eight months. My former agency determined I was not eligible. I lost $8,000.

When I asked why, the answer was equity. The same principle meant to protect workers had been used to deny one. I had built the program from nothing, managed it solo for eight months, and absorbed the kind of sustained stress that doesn't leave when you close your laptop. The stipend existed precisely because of work like that. I did not receive it.

When organizations say there is no money to raise wages, that is sometimes true. But it is not always the whole story. When the government decides something is a priority, it finds the money. When a foundation decides a program matters, it funds it. The question has never been whether resources exist. It is whether the people doing this work are considered worth the investment.

This is not sustainable. And it does not have to be this way.

The first step is transparency. Organizations should clearly explain how pay ranges are developed, what data was used, and what assumptions shaped the numbers. When that process is visible, it becomes possible to ask whether salaries reflect what the work costs today or what the sector accepted decades ago.

The second step is honesty about what the work involves. Crisis response, emotional labor, administrative compliance, and long-term accountability are not soft additions to the job. They are the job. Compensation should reflect that.

The third step is treating retention as a measure of program success. When an experienced worker leaves, the cost is real: recruitment, lost institutional knowledge, and disrupted relationships with clients who had finally learned to trust someone. Stable staffing is not separate from quality services. It is what makes them possible.

The fourth step belongs to funders. Salary reviews, cost-of-living adjustments, and market corrections can be built into funding structures without violating compliance requirements. What has been missing is not permission. It is clarity. When funding entities provide explicit guidance that reasonable, documented wage increases are not just allowed but expected, organizations will have the confidence to act.

Finally, nonprofit leadership must change the story it tells about compensation. Low wages are not an unavoidable feature of mission-driven work. They are the result of policy choices and organizational habits that can change. The mission does not require workers to go without. It requires leaders willing to make different decisions.

The people doing this work are not replaceable parts. When skilled case managers leave because they cannot afford to stay, their clients do not get a smooth handoff. They get to start over with someone new, rebuild trust from scratch, and absorb yet another reminder that the system was not built with their stability in mind.

Without staff, there is no program.

This moment of financial uncertainty is not just a budget challenge. It is an opportunity to rethink how we sustain the workforce that makes these programs possible.

The nonprofit sector never set out to underpay its workforce. But somewhere along the way, the mission became more important than the people carrying it. That is not sustainable, and it is not right. The families in crisis who depend on these services deserve workers who can afford to stay. And the workers who show up every day, absorbing what most people will never see, deserve more than gratitude. They deserve to be paid for it.

Stephanie Whack is a survivor of domestic violence, an advocate at the intersection of victimization and homelessness, and a member of The OpEd Project Public Voices Fellowship on Domestic Violence and Economic Security. In 2024, she was awarded the LA City Dr. Marjorie Braude Award for innovative collaboration in serving victims of domestic violence.