Will You Write My Grant on Commission? Nope. Here's Why...
Over my years of grant writing, you'd be surprised how often I would meet with a prospective client, and they would ask me to write a grant for them on commission. I immediately realized that to save everyone a lot of time, I needed to disclose my rates up front and have the potential client confirm that they reviewed them. That might seem a little backward for business sales, but the misconception that grant writers work on commission is so common that this strategy was my saving grace.
Picture this. I live on an island in the Pacific Northwest. To get off the island, I had to take a ferry to Seattle. So, leaving the island for any reason was an all-day affair between waiting in ferry lines, crossing, and dealing with Seattle traffic, then getting back in the ferry line, crossing, and finally returning to my home office.
One day, I received a phone call from the veteran's hospital requesting the services of a grant writer. Since I love raising money for veterans and this was a quasi-government agency, I made an appointment to meet. I left early in the morning and arrived for the mid-morning appointment. The group was excited to meet me and eager to tell me about all the projects they wanted to begin. I took detailed notes and listened carefully, excited to get started. At the end of the meeting, they stated that they paid on commission. I was shocked. I told them that it was unethical to work on commission, and they said they would find another grant writer who would.
Table of Contents
What is a commission?
Writing on commission means that a grant writer completes all the work of writing a grant up front and only gets paid if the grant is awarded. The payment offered by the organization is usually a percentage of the total grant award. That might not seem like a bad idea if you are a risk-taker or just starting as a grant writer, but it's actually a terrible idea and completely unethical.
Why don't grant writers work on commission?
The simple answer is that the grant writer does the work whether or not the grant is awarded and deserves compensation for their time and skill. And guess what? I could write the perfect grant proposal, and it could still be denied an award because the organization I'm writing the grant for has a bad reputation, forgot to turn in last year's grant report, or generally doesn't have what it takes to get funded. You probably will not have access to this background information as a grant writer.
Writing grants on commission is unethical
Leading professional associations such as the Grant Professionals Association (GPA) and the Association for Fundraising Professionals (AFP) prohibit writing grants on commission, sometimes called contingency pay. The Code of Ethics states, "Members shall not accept or pay a finder's fee, commission, or percentage compensation based on grants and shall take care to discourage their organizations from making such payments."
This applies across the board, public funders and private ones alike. So even in cases where federal law doesn't technically govern the arrangement, as with many private foundation or corporate grants, the professional ethics point in the same direction.
Grantmakers do not allow it
When you write a grant proposal, grantmakers do not pay pre-award costs. In other words, they do not give awards for work that happened in the past, including grant writing. Using funds for pre-award activities is a sure-fire way to have your funding taken back. It is extremely unlikely that you can use grant funds to pay the grant writer, and on the rare chance it were allowed, it would definitely not be permitted as a percentage of the overall grant award.
With federal funding, this isn't just practice, it's written into the cost principles. Under 2 C.F.R. 200.459(a), professional and consultant service costs are allowable only when they are "not contingent upon recovery of the costs from the Federal Government." A commission arrangement, paying the grant writer a percentage of the award or paying only if the grant comes through, is a contingent cost, and it is not allowable on a federal grant. That single clause is the legal backbone of what experienced grant professionals already know by instinct.
It's worth being accurate about the stakes rather than overstating them. The cost principle itself makes the fee unallowable; it does not, by itself, turn every commission arrangement into a crime. But when a contingency fee is paired with an inflated budget, a misrepresentation, or an unallowable cost charged to a federal award anyway, the consequences escalate fast: audit findings, repayment with interest, suspension or debarment from future federal funding, and, in cases involving genuine fraud, potential civil or criminal liability. That's a wide enough range of risk that the professional norm is simple. Decline commission work.
Inflating the ask and eroding philanthropy
Think about it - if you were getting a percentage of the award as a grant writer, you would want the grant request to be as large as possible. Grantmakers can see right through padding a budget. In fact, the budget is often the very first item that is reviewed in a grant proposal. An inflated budget almost always results in no award being made.
The whole idea of grant awards is to help the community. If grant requests start being inflated to cover commissions or contingency funds, the philanthropic community will lose trust in the process. Soon, philanthropy would come crashing down in a blaze of fire.
Consider the math
Let's say a grant writer spends 75 hours writing a federal grant award for 5 million dollars. At a pay rate of $95 per hour, a grant writer's compensation would be roughly $7,125. On the other hand, a 5% commission of 5 million dollars is $250,000. That's a ridiculous amount to be paid for 75 hours of work. The rate would be $3,333 per hour. No grantmaker is going to allow that.
Why grants are denied
Earlier, I wrote that you can compose a perfect grant proposal and not receive a grant award. Let's break down some reasons a grant is denied that have nothing to do with the grant writer's skills.
Grant Readiness
To win grant awards, organizations must demonstrate that they are "grant-ready." In other words, they must convincingly describe how their organization is qualified to accept a grant award and carry out the work promised. Grants are not free money. If an organization has no history of success, systems in place to track data, qualified staff, or a strong plan to achieve the proposed outcomes, it won't get grant awards.
Reputation
I mentioned earlier that organizations might have a bad reputation with the community or with grantmakers. This situation could be due to failing to send grant reports, working in isolation without community partners, having too small of a board of directors, or even paying executives salaries that are too high for the organization's size and scope. The organization's financial records could be concerning; they may be asking for a grant far larger than their fundraising history, or they could be too new to have a proven track record.
Competition
There are over 1.5 million nonprofit organizations registered in the United States. That means that there is a massive amount of competition for grant dollars. As a grant reviewer, I know the difference between a winning grant proposal and a decline in funding could be a matter of a single point on the rating scale. You could have a wonderful project and fantastic grant proposal but simply score fewer points than another organization that applied.
What should I pay a grant writer?
Grant writers charge by the hour or by the project. According to the Grant Professionals Association, the average hourly rate of a grant writer is $90 per hour. However, the hourly rate ranges from $40 for a new grant writer to $250 for an expert, depending on your geographic location.
Paying a grant writer on a project basis is paying a set fee for completing a grant proposal or paying a grant writer every month for ongoing support. The project rate is comparable to the average hourly rate, but the grant writer sets the rate based on how many hours they believe it will take to complete the work. Paying a grant writer on a monthly basis is a fantastic strategy for organizations hiring a grant writer because the organization can budget for a monthly expense with no surprises.
So the next time you're asked to write grants on commission, go ahead and give your best eye roll, and use this information to explain why grant writers just don't do that. I've always found the quickest way to close the conversation is simply to say it's against my code of ethics.
A quick note: this article explains general professional standards and federal cost principles, not legal advice. If your organization is weighing a specific compensation arrangement involving federal funds, check with your grants administrator or legal counsel.
Cheering you on,
Allison
