I don't see any future in option #1. He is unlikely to respond well to your attempt to negotiate a raise, or he would have increased your salary some time ago.
I would be willing to bet that from his point of view, you are already earning fair if not generous overall compensation from your combined two jobs (which he probably sees as both part-time); and asking for more money because there are no candidates for the non-profit is just an attempt to take advantage and gouge him. Again, that is from his perspective!
For option #2, I'd suggest simply telling him that you have done your share over the past couple of years and it is now someone else's turn ... perhaps one of his other employees? Give him a deadline of two months and leave it to him to find a replacement. If he can't accept that, start looking for another position; you don't need to be exploited any move.
"If at any times we must deal in extremes, then we prefer the quiet, good-natured hypocrite to the implacable, turbulent zealot of any kind. In plain terms, we are not so fond of any set of notions, as to think them more important than the peace of society". John Toland, The Description of Epsom (1711)