Wednesday, March 29, 2006

About Grant Writing Fees & Commissions

As a professional grant writer, I usually charge an hourly fee, or sometimes a flat fee per project. Never do I charge a percentage of funds received or in any other way work on spec or contingency.

First off, this is just accepted professional practice in the nonprofit industry. Second, as a professional I need to be paid fairly for my work. But, most importantly, it is a matter of ethics.

I always strive to fully abide by the code of ethics published by the AFP (Association of Fundraising Professionals), which states, "Members shall not accept compensation that is based on a percentage of contributions; nor shall they accept finder's fees."

Still, there are some organizations that will expect to pay for proposal writing only when it is successful, and there are those consultants who will accept that. I have often had conversations where I've had to explain why this is considered an unethical practice.

Yesterday I came across an essay by Goodwin Deacon, founder of the Puget Sound Grantwriters Association, that goes beyond simply saying "it's unethical" to explaining why funders frown upon the practice.

The bottom line in her essay is, as I've also always said, even if a grant writer doesn't mind being paid on contingency, "such an arrangement is basically a kick-back, and therefore unethical." Would you want to support a charity that gave kick-backs? Didn't think so.

58 comments:

  1. Andrea >> Become a Consultant Blog11/30/2006 11:45 PM

    Hi...I have a keen interest in consulting and I've actually written a post on consulting fees. However, I am curious about how trade/professional associations can set limits on what members can do with regard to establishing fees. Doesn't that fall under price fixing laws? Perhaps I'm being too stringent.

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  2. Hi Andrea -

    I don't believe that the AFP ethics guidelines fall under "price fixing." AFP doesn't give a hoot whether my hourly rate is $500, $50, or $5. They also don't care if I charge by the hour, by the project, or by the month.

    What they do care about - and I suppose this is what sets nonprofit fundraising apart from other types of consulting - is that member avoid even the appearance of potential ethics conflicts.

    AFP (and others) are against fundraisers being paid a percerntage because it is essentially a kick-back, and major funders frown on that type of thing.

    BTW - Thanks for your link on fee setting. Years ago I created a spreadsheet to help new consultants figures out what to charge that included a lot of the same ideas. I've added your blog to the blogroll.

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  3. Check a dictionary - Definition of kick back "An illegal, secret payment made in return for a referral which resulted in a transaction or contract."

    Now 1) since when has been paying a person on contingency illegal (please refer to the particular federal or state statute where it says continegncy payments is illegal please)?

    2) I dont think most nonprofits are making contingency payments secret.

    3)How is paying the writer on cintingency going to result in a guaranteed sucessful grant? I can understand a payment to the grant awards committee being a kickback but the grant writer can't guarantee a sucessful grant if they get paid.

    ... thus contingency payments to grant writers does not seem to fit the standard dictionary definition of 'kickback'

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  4. Hi Anonymous,

    You may indeed be correct about one of the dictionary definitions of "kickback" (although my dictionary says especially, but not exclusively, payments that are illegal or illicit), but that doesn't change the point of my posting.

    The bottom line is that regardless of what terminology you use to describe contingency payments, as a practice they are frowned upon in the nonprofit fundraising world, and specifically called out as inappropriate in the AFP Code of Ethics.

    Grant writers who wish to be regarded as ethical and professional by their peers (and by the foundations they are approaching) are best advised to avoid such arrangements.

    In other fields this arrangement is fine. But not in grant writing.

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  5. Look, Lawyers, who wrote the laws, do work on a contingency basis all the time. It is not secret nor illegal--business is business--non-profit or not...The major difference between non-profit and for-profit is: inurrement. How does a legitimate (market rate) fee for service (contingent or not) breach inurrement laws?

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  6. One more time, anonymous...

    Contingency pay does not break any laws. It violates several industry codes of ethics.

    Not illegal - Just against the industry standard and looked down upon. Not something credible people in this field do.

    I'm happy to reply to comments and questions, but this is the last anonymous comment I'll reply to on this topic.

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  7. I have three years nonprofit experience and I have worked for two years as a grant writer for a large New York social justice nonprofit. I am just starting to work as a consultant as a side job and I am unsure of what my hourly fee should be. My salary is in the low 40Ks. Any suggestions?

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  8. Hi Solachica -

    Good luck with your consulting work! When setting your rate, remember that you are not choosing your hourly wage; you are choosing what You (the company) need to earn in order to pay you your expected hourly wage.

    What I mean is, consider all your costs of doing business (phone lines, advertising, office supplies) and add that to your 40K base. Do you expect your employer to provide health insurance? Add that cost in. What other benefits do you expect? Make sure it's all there. Then add 15% for the "Self Employment Tax."

    That total amount is what the business needs to bring in to pay you $40K plus benefits - It's quite a bit more than $40K, right?

    Now divide that number by your total Billable Hours during the year. Not total work week hours (2,080), but the hours for which you'll be able to bill clients. During a regular work week, you may be at your desk 40+ hours, but some of that is spent running your business. On a good day, maybe 75% of those hours are ones where you can bill your clients. The rest get no income. If you expect to take vacation time, take out those hours too. So, your total billable hours during a year might be more like 1,400.

    Divide your total gross income goal, by your billable hours. That is the number you need to charge hourly to pay yourself what you expect. So, a $20/hour working wage (plus benefits) really does translate to a $50/hour consulting rate.

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  9. My heart is overjoyed to know that I am not thinking or speaking Greek when I tell potential clients that NO I cannot be written into the grant. I have gotten a lot of rejection from potential clients because I tell them I charge an hourly rate for services and payment is due before you receive the completed grant/proposal/funding request. When I try to explain that they are compromising the integrity of their budget or that it is no guarantee that they will receive funding I'm sure they feel like I'm not the grant writer for them. And they are absolutely correct! Thanks for the confirmation and the information.

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  10. I'm a nonprofit fundraising & special events consultants in Georgia. I've been told that the going rate for nonprofit consultants in GA is $150 per hour. How can I verify that or determine what the actual rate is? My clients accept that rate for long-term projects but I think I may be scaring some off on the short-term projects.

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  11. I'm a nonprofit fundraising & events consultant in Georgia. I've been told that the going rate here for consultants is $150 per hour. How can I verify or learn what the hourly really is? My clients don't have a problem with that fee for long term projects but they tend to get scared away on the short-term ones. Any help you can provide would be great. Thanks!

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  12. Hi Ann,

    I don't know of any formal surveys of nonprofit consultant fees for Georgia (or any other region), but $150 sounds good (maybe even a bit high) for straight grantwriting.

    Do you do any networking with other grant writers? Attend any AFP meetings? This might be a topic to discuss with your colleagues.

    But, basically, if it's working for you (you're busy and making what you need) then don't mess with it. If you're under-booked, you might try lowering the rate slightly, or discounting for small organizations.

    Best of luck,

    - Ken

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  13. Grant writing is the one thing I don't do. My primary focus is nonprofit board development & fundraising coaching as well as special events for nonprofits. I'm looking to get more involved in networking but am still learning my way around the private sector.

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  14. Unfortunately it does come down to the work! Grant-related work of any kind is hard, tedious and complicated. One can write the best possible grant proposal in the world but not get the grant simply because of "politics" The grantwriter should not be penalized for this.

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  15. I am a full-time, salaried, mid-level administrator for a non-profit. The board has encouraged me to apply for a large grant which will give a lot of money to the program that I manage and enable us to do some really great things.

    The problem is that I already have an overly full plate and the additional program will give me even more work to do. I am planning to write in a positon for a program manager; but still have to do a lot of the legwork-- write the grant, set up the program and hire/supervise the person in that position.

    Do people usually get stipends for this type of work? In the business world I would get a bonus, etc-- is thier any type of similar system in the non-profit world that would motive people to take on more work while still remaining ethical?

    The grant I'm applying for only requires accounting for 80% of the money and the rest is up to our discression. Is it expected that I will write in a stipend for myself, or should I be offering that to the administration and asking for a raise?

    Thanks!

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  16. Hi NP4kids - Basically, the answer is that "it's part of your job." If your job responsibilities are expanding beyond what's reasonable, you should definitely speak to your boss about a raise or passing some duties on to another staffer, but any sort of "bonus" for getting new grants would certainly fall into this ethically questionable area that would be difficult to explain to funders.

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  17. Why grant writers can't get paid as part of a percentage of any grant that is awarded is pretty simple, once you know how grant guidelines are usually written.

    Most guidelines say that they do not pay for development costs, or costs incurred before the grant is awarded (which certainly includes the effort of writing the grant.)

    Also if the granter gives you money, they want it to be used for feeding the homeless, or saving the whales or whatever cause you wrote the grant for.

    Generally they always want a project budget and unless you add "grantwriters salary" as a line item, taking some of the funds intended for the homeless/whales and using it to pay the grantwriter is unethical - that's where the ethics comes in.

    If you have a large operating grant, perhaps a portion, can be used for staff to operate the program - also known as indirect or overhead, but even then it is written as supervisors' time x hours x wage - you have to say what the person is doing. If that person also writes grants, maybe as part of their job, they can be paid as they re-apply for funding as part of the NEXT grant cycle, but not as part of the initial grant.

    Finally development people are supposed to put the interests of the non-profit at the forefront. For example, if I am a fundraiser, not a grantwriter but the case is similar, I should be thinking of the long-term health of the agency.

    If I am working for a percentage, then I am probably more willing to accept a larger percentage of a small amount NOW then wait and cultivate a donor and hopefully get a larger amount later.

    You do not think of the long-term health of a donor if you only make a portion of what they give. Whereas if you get paid an hourly wages whether you bring in any money that day, you can do the steady patient work of doing the research, or the boring work that is behind sucessful development work, which includes grantwriting.

    I am about to take my second paid free-lance job with a person who can afford to pay well (I am only charging $50/hr.) but then I am going to just offer free-grantwriting to other groups who I know cannot pay and I am going to chalk it up to pro bono.

    Grant-writing is my day job, BTW.

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  18. Hi...I am seriously considering becoming a grant writer, and welcome any help/advice. My BS (from 25 yrs. ago), is in an unrelated field. As a stay at home mom caring for a sick child, and supporting my husband in his business, I earned a number of skills w/ a degree inc. fundraising, writing, cold-calling, marketing. How critical is a degree in a related field such as bus. admi. or tech writing? Also, in addition to reading up on grant writing, can anyone recommend a certificate course or online course that is respected by people in the industry? I live in the Hartford, CT area. Thank you in advance.

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  19. Hi Janet - I don't think the degree you have is nearly as important as the experience you have. Certainly look for classes from a local nonprofit development center, but also consider volunteering some time to a cause you care for to get a few proposals under your belt and "build a portfolio" and you should be on a good ground to set up a grant writing practice.

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  20. Thank you kenrg. That was very helpful. How do I find a nonprofit development center?

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  21. Hi I am considering becoming a grant writer. I am drawn in by my life long desire to "make a difference". However I fear that the income I earn will never be able to match what I make now. I currently make 75,000 a year. What is the income reality in grant writing? After I get experience can I really get 50 to 100 dollars an hour or maybe a full time position in the 75000 a year range. Can someone better outline the salary prospects of grant writing for me.

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  22. Cadence, Senior-level development directors at mid-large sized non-profits can make $75K or more, but that is a job that typically takes 5 years of experience or more and encompasses more than grantwriting. I live in the SF Bay Area and it seems like the typical grant writer around here charges around $50-75 an hour or more.

    www.maustinfuller.com

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  23. I appreciate your reasoning. Here's the catch, for a newby. If you check Guidestar.org, for example, you'll find many nonprofits with zero revenue. In my case, our own organization is a newby (World Writers Resources, Inc.), and therefore, by your standards, will never be able to have a person to properly raise funds. Instead, we must do so as amateurs, and probably make many mistakes. Surely we would be better off with a pro. Of course, if every person desiring to start a charitable organization possesses substantial wealth, there is no problem here. And, of course, a startup's chance of success is less than that of an established organization. End result. The rich get richer, the poor get poorer. While I truly understand that a fund raiser needs to have assured payment, is there no room for a pro to give the little guys a break? And, if he or she does, is that considered less than ethical? Thanks! :)
    Bruce Cook, cookcomm@ameritech.net

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  24. Hi Bruce - As a certain former president used to say, "I feel your pain."

    One potential option for you is to find a volunteer - either a pro who believes in your cause and will do a little pro-bono work hoping that you'll be a paying client later, or somebody who's interested in a career in grantwriting and will do some pro-bono work just to build a portfolio.

    Another option, and probably the best one in the long run, is to take a workshop or two and develop the skills in-house. Yes, as beginners you'll make mistakes, but sometimes an imperfect proposal that's written from the heart is more effective than the slickest professional effort that lacks any emotion.

    Best of luck to you.

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  25. What are the ethics involved if you are paid a monthly retainer to write a number of grants with a fixed bonus (not a percentage)for every grant that is approved?

    Thanks.

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  26. Hi Laura - Interesting question! Certainly, there should be no problem with the set retainer for producing a certain number of proposals.

    The bonus for successful ones, however, might be seen by some to right on that line. But, if you take a strict reading of the AFP Code it bans "accept compensation that is based on a percentage of contributions."

    As long as your bonus is also a set contracted fee, and not based on the size of the grant, it's not against the Code of Ethics, although some people may feel it's a little too close for comfort.

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  27. Hello,
    I'd appreciate some input on my situation. I am an independent research consultant (PhD level with some academic background). I conduct all aspects of research projects. Recently a highly valued, nonprofit client asked me to write grants to fund studies, including a very challenging federal grant, which is not something I normally do (or want to do). I'd like to know if it's reasonable to charge more for this particular activity than for other activities I typically do. Thanks very much!
    Chris

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  28. Hi Chris: I see no problem with charging a higher rate for work you don't prefer to do, or is more difficult to do. The AFP Ethics Code only talks about commissions, other than that, you can set your rates however you'd like. Personally, I agree with you, Federal grants are such a headache, I want double my regular rate just to read the darn RFP!

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  29. I appreciate your reply, Ken. Thanks.

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  30. Hello All,

    Thanks for the interesting and informative blog relating to grant writing fees and commissions. At some point in the discussion it was mentioned that accepting a commission for grant writing services was unethical, but NOT illegal.

    Some would argue that actually accepting a commission for any kind of fundraising IS illegal according to the IRS. The IRS prohibits personal profits (i.e. to the investor or fundraiser)from contributed income. The phrase the IRS uses is "private inurement" and under the the IRS codes, one of the most important criteria for retaining 501(c)(3) status is that donated revenues can't go towards the private enrichment of any individual or non-exempt entity. Paying reasonable and customary fees for services rendered is, of course, acceptable, but basing that compensation on financial performance or revenue raised would constitute "private inurement" and would endanger the non-profit status.

    Perhaps that information will be helpful in some cases dealing with a client who doesn't want to "take the gamble".

    Laura
    Laura-Keith-King@hotmail.com

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  31. I think contingency is not accepted because the bulk of these grant writers really do not produce results.
    What is wrong with commission? You get me $10 and I give you .50 That's fair.
    How do you call that a kick back.
    I have a small non-profit Christian organization with very little resources. To "Gamble" with someone in the hope that they will produce would be taking my supporters money and throwing it away. I have tried going to "Christian" philanthropists and I hear that they will not support someone who solicits them. What they actually do is support the highly visible organizations like Billy Graham and Jerry Falwell and forget those who are in the trenches living at poverty level to spread the word.
    Anything but contingency is a ridiculous move on the part of a poor organization and should never be tried.
    On the other hand, if someone raised the $5 million we need to build the Baptist complex we hope for, then it's more than fair to pay them accordingly.

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  32. What do you say if the organization asks how long it will take? I've got a good background in grantwriting (4-5 years) but as a freelancer, i have no idea what I would say to that question! I never timed myself writing a grant, and of course they all take different amounts of time!

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  33. Hi Anna's Mom,

    As you say, "They all take different amounts of time," and I try to be very open and honest about that up front - A 2-page LOI is a very different assignment than a County Government proposal with a 60-page instruction packet.

    Another thing I always say upfront is that the first proposal I do for an organization is going to take longer than the ones to follow. This is because I'm learning about the agency, their programs, getting familiar with the budgets, etc. That first LOI may take 30 hours to get right, but once it's done, modifying it for future funders may only take two or three hours.

    Best of luck to you!

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  34. Hi, I recently started grant writing on a consultant basis and this post has been very helpful. my background has been budgeting & writing as a non profit employee as well as a board member for non profits and community orgs. I did not know that it was unethical to work on a contingent basis. I do charge a retainer fee, as well as offer grant writing workshops, however, for the ones that asked if i could work on a % basis, i did accept a few. how would you suggest explaining to these clients that commision is considered unethical and setting up new payment arrangements. i don't particularly like the hourly rate, but the retainer fee or monthly rate and/or an agreed upon flat fee per grant awarded i could do. just reviewing my options, any suggestions would be greatly appreciated. thank you

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  35. Hi Sherree;

    You can explain it to your clients simply by printing out the AFP code and explaining that the foundations that you are submitting the proposal to are all aware of the code; by violating it, they are cutting their chances of success, regardless of how good the proposal is.

    A set fee per proposal is fine, but saying "per grant awarded" is still a contingency, and bending the code a bit. Setting a fair price for your work as a writer and adviser protects both you and the nonprofit organization you're working for.

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  36. I think that access to credit, especially in rural areas, is one of the main challenges that our society faces today. In a corporate setting, I can see how a grant writing professional would look down upon a commission-based salary; however, many people searching for grants are searching for the sake of a start-up, research, or first time business. They need grants and loans in order to fund their business. Accepting payment in royalties, in this case, is an investment, and it is not unethical. Any person creating a business or developing a product has the interest of the "percentage" (i.e, how much money they can put back into the company). But not every person is unethical in the sense that they base the salary that they will cut themselves on the amount of capital their company produces. If a grant writer is given royalties based on the amount of money they produce, any unethical behavior committed by the grant writer should be based upon their choice of where to invest those royalties: do they hoard it and put it all into their piggy bank, or do they spend it lending responsibly, donating, researching and developing other exciting ideas and businesses, etc.?

    I think that what it all boils down to is this: can a grant writer get on board with a start-up company and make the people in that company feel more secure, just like every other member of the team whose experience is depended upon? Is the grant writer a part of the shared vision? Or is the grant writer a shark, only interested in how much he takes away for himself? I think that the latter of these two is the only kind that won't accept "commission".

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  37. I think that access to credit, especially in rural areas, is one of the main challenges that our society faces today. In a corporate setting, I can see how a grant writing professional would look down upon a commission-based salary; however, many people searching for grants are searching for the sake of a start-up, research, or first time business. They need grants and loans in order to fund their business. Accepting payment in royalties, in this case, is an investment, and it is not unethical. Any person creating a business or developing a product has the interest of the "percentage" (i.e, how much money they can put back into the company). But not every person is unethical in the sense that they base the salary that they will cut themselves on the amount of capital their company produces. If a grant writer is given royalties based on the amount of money they produce, any unethical behavior committed by the grant writer should be based upon their choice of where to invest those royalties: do they hoard it and put it all into their piggy bank, or do they spend it lending responsibly, donating, researching and developing other exciting ideas and businesses, etc.?

    I think that what it all boils down to is this: can a grant writer get on board with a start-up company and make the people in that company feel more secure, just like every other member of the team whose experience is depended upon? Is the grant writer a part of the shared vision? Or is the grant writer a shark, only interested in how much he takes away for himself? I think that the latter of these two is the only kind that won't accept "commission".

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  38. I have worked for many years for my clients and get a monthly retainer and a bonus award based on the amount of the grant. Big grant equals big bonus. Like a lawyer would. If I don't win the grant, then I don't make that much money. There is nothing unethical about this. I believe in establishing long term relationships with my clients.

    I agree with PastorJack who said "I think contingency is not accepted because the bulk of these grant writers really do not produce results." What are you afraid of? You should screen your clients and their project ideas and have a good understanding of the funding agency and you should know what your chances are before you plunge in. Let's say it is a big HRSA grant and last year 10 out of 200 applicants got an award. Well your chances from the beginning are very low. It amazes me really to think in a case like that 190 organizations spent considerable time and effort writing an 80 page grant and did not get an award. I bet the number of applicants would go way down if the grant writer was working on contingent basis.

    The idea of not accepting contingency is an excuse in that you don't think you will get the grant. I don't write grants I don't think I can get and I don't waste my time or my clients time.

    Now sometimes it doesn't work out but this is life and you have to take risks. However this is also why I raise my bonus award fee so when I do score it covers my time for those grants I wrote and did not score. If I score really well and get more awards then my break even point then I get get paid really well. My clients know I have some skin in the game and when I tell them they don't have a snowballs chance in hell of getting a grant then we move on to greener pastures. Sometimes I do take a hit knowing my chances are low the first time I apply (like with a HRSA grant) but I need to learn for the next year. This costs my clients nothing and the next year I usually score the win because I learned how to improve my application based on reviewer comments.

    All in all I get paid very well and quite frankly when I hand my client the award letter they are more then happy to pay my bonus award. So you won't see me at any of your grant writers meetings because I would never agree to your code of ethics.

    And I do also do pro bono work for neighborhood non-profits who simply could not pay anybody anything for a grant. This is charity.

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  39. Thanks for this open explanation.

    Basically, the system operates to the advantage of existing organizations. The existing organizations and fundraisers knowingly adopt policies which block out newcomers.

    Now, it's not at all fair to say that newbies don't take a risk. For a retired person, I have had to front lots of money for legal and filing fees, and still have to pay. Not to mention a hefty fee for a consultant to handle our Form 1023. Now I see that I should also have to pay a fundraiser thousands of dollars, because he or she agrees with shutting out the newbies - doing the sure thing.

    It is commendable that a local fundraiser I might meet downtown could handle my grant proposal as a charity. But I wonder how anyone feels about having a policy of nixing the newbies.

    In my case, for example, I can show program effectiveness in some special services I have been able to do for certain people in areas of atrocious genocide. However, if I want to raise funds to help further, I need to pay someone in New York, not help the people in need. And, as a retired person, I simply cannot afford to send dollars to the Big Apple.

    Oh well. I just feel there should be a better way. Thanks for listening.

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  40. Hello,
    I have beginner questions that I hope you can answer or can direct me to another source that might be able.
    1. I'm a full time RVer. Is it feasible to be a grant writer on the move?
    2. Is training a good selling point for a beginner?
    3. Is starting as a freelancer feasible without already having contacts? Do you suggest working for an organization or seasoned writer first?
    4. I'm creating a profile on LinkedIn. What "industry" does grant writing fall under.
    Your time, knowlegde and opinion are greatly appreciated. Thank you in advance.
    Lori

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  41. Hi Lori,

    1 - As long as you have some sort of "permanent address" for folks to reach you, it should be okay. Maybe a PO box, and really good wi-fi for email and cell phone wherever you go?

    2 - Yes, getting as many trainings as you can under you belt is a good selling point, but not as good as...

    3 - ... putting in some time as a staff grant writer for an organization, or working with an established freelancer first, to put together your portfolio of successful proposals. This could be difficult, given your RVer status, but ultimately, very worthwhile.

    4 - If there's no Fundraising category, I'd go under Nonprofit Organizations.

    Best of luck!

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  42. I have searched all over the net for a guide to decide how much to charge "per project" for entry-level grant writing. I am fairly new to the non-profit arena, and have no clue what would be an acceptable amount to charge. Is there a resource I have missed?

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  43. Interestingly, this blog has convinced me that the grantwriters association's stance is purely self-serving... and I now wish that 20 months ago I had not turned down a small non-profit's request that I write on contingency.

    As a good researcher should, I reviewed this blog as well as others, and laid out all the arguments & counters, and determined that the reasons given against writing on contingency are specious.

    The best reasons for not doing it are the time lag before getting paid, or the possibility that we might work for many hours and the proposal won't get funded.

    So why aren't we just honest and say that money is the real reason, rather than make up some ridiculous argument about ethics? (I've studied ethics rather extensively, and do workshops on real estate fraud & scams, so I know a little bit about the topic.)

    Linda Snyder

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  44. Thank you, Linda, that finally makes some sense to me. After reading and researching this topic extensively, I can not find anyone who can tell me WHY anyone feels this practice is unethical. Really, WHY? All I can find is THAT some feel it's unethical.

    I feel it's more unethical to charge a small non-profit a fee they DO NOT HAVE than to partner with them, hold hands with them along the way, and only take a fee when they have a windfall due to my efforts.

    I am an ethical person. I would NEVER falsify any paperwork in an effort to win an award - I would never endanger a client in that way; I would NEVER rip off a client. I just don't want them to incur more debt when they are in the pursuit of funding what is a fine mission. If they were rolling around in cash, then we would not be having this conversation.

    I honestly do not understand what all the hubbub is about. Honestly.

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  45. I have been in the business for 20 years, and get calls from a lot of nonprofits that have very un-sellable programs, and they want me to work on contingency.

    I use the AFP ethical statement as the rationale, but it's both AFP and the fact that there are so many variables - beyond the written proposal - that can get the grant turned down.

    How are the organization's financial statements looking? A huge deficit last year? Or prepared by an amateur?

    How is the board of directors involved? OH, the organization is run by the founder and the board doesn't meet.

    How is the quality of the program?
    Oh, the staff running this have never run anything like it before, but they will try hard

    Is the program really needed?
    Oh, the Boys and Girls Club has been providing the same service at a higher level for the last 20 years.

    That's why I don't work on contingency. The groups that have these types of questions answered the right way don't ask me to write on contingency. The disorganized, poorly managed, one-person startup that is duplicating services and not particularly innovative or visionary is the one coming to me asking me to work on commission.

    Sorry to vent, but I get a lot of phone calls asking for this...and I find it absurd that people think that just because they're a nonprofit that they are entitled to grant funding.

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  46. For the reasons that Jay states, as well as the ultra competitive nature of grant applications, it makes sense from the consultant's perspective to charge based on an hourly rate.

    However, paying on contingency is better equated with pay for performance than it is a "kickback". Instead of assigning it an unfair term like "kickback", I would like to hear why grant writing is grant writing so different that contingency should be considered "unethical". Why is this an ethics conflict?

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  47. @publicserviceforlife

    One reason it is considered unethical is because it limits the number of grant sources that a grantwriter will apply to, since they are obviously only going to apply to those organizations with which they have good success rates. The problem with that is that after the grantor has funded a few grants to the same nonprofit, they may very well block that NP from applying again. After a while all your funding sources dry up, because your grant writer moves on to another NP that doesn't have a "successful" history with those grantors.

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  48. What are your thoughts on contingency payment if you are not only writing the grant proposal, but also part of the project the grant is funding?

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  49. Ken,

    I have read the comments to this post, and I think something has been missed. The basic division falls along the line of either charging a pre-determined fee based on time or units of work or charging a fee based upon success of efforts usually measured in terms of dollars raised.

    My experience with non-profits has shown me that there are many instances where a proportionate fee based on an agreed future value of the consultation is merited under the condition that its calculation cannot have anything to do with the amount of money raised after the fact.

    Here's an example. Let's say that a non-profit is experiencing a cash shortfall, a shrinking customer base due to demographic changes which in itself is causing it to question the validity of its mission, and staff and board defections that threaten its viability in the near term. A consultant meets with them to discuss their dilemma, and he raises the issue of the value of their work in the community, the amount that would be lost from the perspective of unsuccessful grant requests and contributions not received, and the reduction of operational efficiency due to the loss of staff and crucial board members. The number is significant, and the non-profit's leadership recognizes that it not only needs to raise funds in the short term but that it also needs to reassess how it operates, to restate its mission, and to deal differently with the community as well as to produce measurable and observable change that will instill confidence in its ability to be a positive force for change in its community as a matter of public relations. Fundraising in this instance is not the primary goal; it is important of course, but it is a secondary activity compared to the work that needs to be done throughout the organization.

    In this case, a consultant could, I think, charge a flat fee that is based on a pre-determined assessment of the value of future objective and subjective changes that would result from the consultation. Since the funds would not have begun to be raised and since there is no assurance that they would be raised, the fee is not related to fundraising success at all. From the consultant's perspective, there is a tremendous imperative to perform well for the non-profit since a failure to do so could result in a failure of the non-profit itself and the personal loss of any revenue from the engagement. From the non-profit's point of view, it could receive funds far in excess of its goal, but it would not be obligated to pay the consultant any more than what was agreed before the consultation began.

    I don't regard this as a sleight of hand method of somehow trying to link fees to the quantity of funds raised. What I see is a larger role for the consultant that goes beyond advising a non-profit with regard to fundraising and which extends to the full re-examination of the non-profit.

    One of the lessons I have taken from Peter Drucker was that many organizations' leadership lives in a bubble of their own making. They fail after a period of time to understand the motivations and desires of the people they intend to serve, and non-profits are very much subject to this tendency. It has only been recently that they have accepted the notion that results have to be measurable, something that for profit businesses have done for a long time. Staying in touch with one's target audience is hard and mental inbreeding is exceptionally easy. It is no wonder that non-profits have difficulties that go beyond those precipitated solely by funding issues.

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  50. As a volunteer for a sport club, I have raised over $15,000 through grants I applied for on behalf of the sport club. I did the required work as a volunteer and have not and will not be paid for this work. However, in that I have had success writing grants, I am considering doing this part-time as a paid job and have been approached by two other small not-for-profit organizations in two different fields to do some grant writing for them as well, but I am struggling to come up with a fair payment system. Both groups have approached me with the concept of paying me a fundraising bonus based on a percentage of the monies I raise, not from the grant monies I raise, but from membership fees. That way, 100% of funds I raise go directly into programming, freeing up some membership fees revenue for paying for a grant writer, etc. The dilemma they face right now is that all of their membership fees are currently being used to cover program expenses so until monies can be found to cover program expenses, they can't afford to hire a grant writer. But without a grant writer, they can't seem to raise the money to cover all the program expenses meaning 100% of membership fees are going to cover program expenses, leaving nothing left over for admin positions to be paid. Jeesh, it really is true that you need money to make money, but for a not-for-profit, that just sounds wrong!

    So does anyone have a magic solution for how I should set up a pay scale that will hold to the AFP code of ethics, not require the clubs to pay me up front AND at the same time pay me for work on grants that are unsuccessful?

    Not-for-profit sector is so hard - so many need grant writers, but can't afford them. It sounds so counter-intuitive to say to a not-for-profit organization coming to you to help them raise funds "Sure, I can help. Just pay me $50/hour for me to do some grants and you still owe me even if they are unsuccessful, okay." Really? For groups struggling to just pay rent (and one of these organizations is just in that situation), I feel it's unethical for us not to help. This same organization is providing services not provided by any other organization in the state - it is definitely filling a gap - but an inability to generate adequate funds is the only thing holding it back. How can I possibly tell them it will cost more than their rent for me to apply for 3 available grants when we both know we aren't guaranteed to be successful on even one of them?

    Help and advice would be much appreciated!

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    1. Hi Courtney - I certainly understand the predicament you describe.

      For an organization that can barely pay it's rent, spending money chasing grants it may not get does seem like a stretch. But let me ask you, are they paying other staff? Are they paying other service providers? Why is your work worth any less than anybody else?

      Raising funds is a mission critical part of any nonprofit's work. Early on, it's fine to use volunteers for this function, but at some point, if they're going to be sustainable, they need to develop the capacity to consistently raise money - and that requires an investment.

      As far as using "membership fees" to pay for grantwriting, fine, but not if it's still on a contingency/percentage basis. AFP says that's wrong, regardless of the source.

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  51. This is such an old post, but still a relevant issue. I do not work on a commission and it has nothing to do with believing it would be unethical to do so. The amount of work I need to do on a proposal is typically unrelated to the amount of the award. I recently wrote one for $250K that took me almost as much time as it did to write one for $16M the month before. My time and expertise have value. Some federal grants have a 14% rate of applications get funded. Often, your project doesn't get funded in cases like that because of the huge competition, not because of the fault of the grant writer. As a writer, I see my role as a process expert. The organization designs the content, not me. If the idea isn't as good as others submitted, that also is not the writer's fault. I'm rather offended by those who suggest that being paid for the work I do is greedy or cowardly. I am hired to shepherd a process and craft a grant proposal. When the client has the completed proposal, I have fulfilled my contract. I am of course invested in creating the best product with a successful outcome. If I do a poor job, or if none of the projects I write get funded, then I lose business.

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    1. So true - You're paid for your expertise and the work you did - Each unrelated to the amount of the award, or even (usually) to whether or not a grant is awarded.

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  52. *hands over a tissue* I feel that comment reflects at best an ignorance of the process and at worst a complete disregard for what value a grantwriter brings. Nobody says a grantwriter is mandatory. Those who don't need one don't hire one. Who am I to come into your organization and tell you what sort of work you should be doing? I don't determine what activities the grantee will perform. I could never help a broad array of clients that way. I'm not going to go to company A and say "here's how you should create a new aquaponics business" nonprofit B, "let me design a new program for homeless advocacy for you to implement over the next three years," or college C "here is what you need to create a clinical lab for nursing students." They know what they want and need and they're the ones that will be doing the work. It's possible for me to ask questions and facilitate drawing the information out of them.... But that's the PROCESS not the content.

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  53. So how is accountability rendered when charging an hourly fee?
    How are hours worked monitored?

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    1. Accountability through the quality of work. When hiring a grant writer, ask to see writing samples first. Also ask for estimates on number of hours for a specific project. Compare that estimate to the estimates of other writers.

      As for monitoring, once work commences, make sure that what you receive matches the quality of the samples you saw. Also monitor the number of hours and amount work completed versus the original estimate. If hours are going much over, without explanation, or if quality does not meet expectations, work it out or cancel the contract.

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  54. Will someone please answer the question below and provide the law. Thank you.

    Is it illegal and/or unethical for a contracted, full-time salaried, public school district grant writer to write himself a paid administrator's position within a grant for which he has been paid to write.

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    1. Hi Brenda,

      Unless somebody else can surprise us all by digging up the section of the legal code, I would think it is perfectly legal to do as you describe. I would also say that it is ethical as well.

      What my original posting was about, was whether or not freelance grantwriters should be paid a commission based on a percentage of each grant awarded. The AFP code of ethics says this is an ethical no-no (although also legal).

      The situation you describe is whether a regular salaried development person can include themselves in a grant. In this situation, we will assume your salary is set and paid regardless of how many or how few grants you pull in. This is not a commission, and so passes the AFP ethical test.

      The bigger question is where in the grant you would put that in. Depending on who the funder is, and what you are asking for, a line-item for a grant writer may or may not fit into something the funder is willing to accept.

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