How does the pay of Federal executives compare to that of executives in non-profit organizations? The Congressional Budget Office (CBO) wanted to know and conducted a study to find out.
A 1999 analysis by CBO showed that pay and benefits for federal executives were below the salaries of most executives in private firms. On a brighter side though, compensation for federal executives exceeded compensation for all but the highest-level positions at large nonprofit organizations.
The CBO report warns readers that an accurate comparison of how federal pay compares with pay from other segments of society requires data from a range of nonprofit jobs and firms “sufficient to mirror the range of jobs and levels of responsibility held by federal executives.”
The CBO report also notes that “If the government is attracting and retaining the top executives it needs, then federal pay may be competitive regardless of how it stacks up against other organizations’ compensation.”
The report contains extensive data and those with an interest in the subject will want to review the entire document for more specific information.
In general, the study found that the CEO of a large non-profit organization generally makes more than executives in federal agencies. For example, in non-profit organizations with a budget of more than $25 million, CEO pay was found to be about $263,750. The highest SES salary at the time of the study was $148,200. For all other positions studied by the CBO in these non-profit organizations, the salaries ranged from about $52,832 to $123,825. In contrast, SES and Executive Schedule salaries for the Federal Government ranged from $130,000-$148,200.
When the CBO looked at salaries of lower level employees and compared the salaries of Federal employees and employees of large non-profit firms, it found that the Federal salaries are comparatively high.
Moreover, the analysts noted that these findings are similar to previous findings regarding Federal employee salaries. Studies focusing on typical white-collar workers, for example, find that lower-ranking clerical and technical jobs may earn more in the federal government than similar jobs earn in private firms.
On the other hand, higher-ranking professional and administrative jobs may earn less in salary than comparable private-sector jobs. In these cases, the salaries can differ by 20 percent or more.
Another finding of the CBO may surprise some readers. The CBO report says that its comparisons do not take into account benefits such as health insurance and retirement. An earlier study by the CBO found that federal benefits are often higher than those offered by firms outside the government. So, when comparisons include benefits, federal compensation looks even better relative to compensation in nonprofit organizations.