Think a PEO will solve all your nonprofit’s HR headaches? Not so fast — the fine print might surprise you.

In this episode, I’m joined by HR consultant Jess Holst from Aligned HRC to answer a listener’s question about whether a professional employer organization (PEO) is the right solution for their growing nonprofit.

Real Listener Question: “We’ve grown from four employees to nearly twelve. I’ve been handling payroll and HR myself, but it’s becoming too much. A board member suggested a PEO, but it feels too good to be true. Should we do it?”

PEOs get sold as a one-stop HR solution, but the reality is more complicated. Jess Holst and I unpack the promises versus the pitfalls: from hidden compliance traps, to the limits of what PEOs actually cover, to the unexpected costs that nonprofits often don’t see coming. We also explore alternatives like fractional HR support and how to make smarter choices about employee benefits.

What You'll Learn:

• What a PEO actually does — and what it doesn’t
• The real reason many nonprofits consider a PEO (hint: health insurance)
• Why compliance gaps and hidden costs can make PEOs risky
• How pairing a PEO with fractional HR could be a smarter move
• Why shopping with a benefits broker might save you more than a PEO
• How to know when your nonprofit is ready for outside HR help

Bottom line: A PEO isn’t a magic HR fix. For some nonprofits, it might be a tool. For many, it’s a costly distraction. What matters most is building a strong HR foundation — whether that’s with fractional HR support, a trusted benefits broker, or a thoughtful plan for growth.

Resources from this Episode

• Learn more Jess and Aligned HRC: https://alignedhrc.com/
• Previous Episode: Are Nonprofit DEI Initiatives Illegal? with Megan: https://birkenlaw.com/charity-therapy-podcast/ct147/
• Episode Transcript: https://birkenlaw.com/wp-content/uploads/2025/09/CT148_Transcript.pdf

Connect with Us

• Jess Birken: https://www.linkedin.com/in/jessbirken/

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