Updated: Oct 23
(Originally posted June 2020 and updated October 2023)
I've never "met" a nonprofit organization that had an excess of money to spend on hiring staff or paying a consultant. With the level of experience and the time commitment necessary to be successful at grant writing, it can be tempting to look for alternative ways to compensate a freelance grant writer.
One of the questions I get most often is: " Is it okay to pay a grant writer a percentage of the grant award?"
The short answer is "no."
While this may seem like a completely reasonable way to get some professional help with low risk to your budget, it has high-risk implications for the financial status of a nonprofit and the grant writer.
What could it mean for a nonprofit?
Industry best practices (as well as the guidelines for several nonprofit professional organizations) do not allow grant writers to be compensated with a percentage or commission of a grant award. According to the Association of Fundraising Professionals and Grant Professionals Association, paying a commission on grants awarded is unethical and can lead to the revocation of grant awards. It is also in contrast to Generally Accepted Accounting Principles (GAAP) for nonprofit fundraising.
While there are some grant funders that allow for a percentage of an overall campaign or grant to support staff salary or consultant fees, it must be written into the request and typically does not cover 100% of the salary or fees. If a nonprofit pays a commission to a grant writer using funds from a grant that was intended to support the nonprofit's programs and clients in a specific way, that funder can demand the return of those funds.
And nobody wants that.
The myth of the guaranteed grant
No grant writer, whether a full-time employee or contractor, can guarantee successful grant requests. Of course, a grant writer's goal should be the same as yours: to get grant awards for your nonprofit. There are so many elements of grant writing that are beyond the control of even the most experienced and successful professionals.
When making grants, funders consider the community needs for the program, the alignment of that program and its impact with the funders' interests, the stability and financial health of the organization and its ability to properly manage the funds, and several other variables that determine an award or a decline.
While the skills of a grant writer certainly come into play when it comes to finding those opportunities, cultivating those relationships, and drafting appropriate content, it's unlikely that a grant award would be made to an organization that did not meet the previous criteria simply because the content was expertly drafted.
What could it mean for a grant writer?
Besides being highly unethical and risky, when a grant writer charges and/or accepts an arrangement to receive a percentage of grant funds awarded, he or she diminishes the professional value of their time and grant writers' time across the industry. It says, "My time is only valuable if you secure a grant award."
Award or decline doesn't change the fact that the grant writer invested hours and hours of time, experience, and expertise into that request. His or her willingness to potentially work for free decreases the value of grant writing as a paid and respected profession.
The insistence by a nonprofit to pay a grant writer in this way could be an indicator that the nonprofit is not financially prepared to successfully manage grant funds or to be competitive with grant requests. Investing in high-quality professional grant writers with industry expertise is part of doing business as a nonprofit.
A good grant writer can help your organization take its fundraising campaign to the next level. If you're not yet in a position to be able to afford a full-time staff person or the fees associated with hiring a consultant, your organization may not be ready to submit grant requests yet.
You get it - a savvy grant writer can make all the difference. But let's face it, not every organization has the budget for a full-time expert or a pricey consultant. So, you might be scratching your head, thinking, "How do we chase those grants without breaking the bank?"
When grants are essential but funds are limited
You're not alone in this predicament. Many nonprofits, especially the newer or smaller ones, grapple with this. They need the grants, yet the costs associated with expert grant writing feels beyond reach.
So, if your budget doesn't stretch to a full-time grant writer or consultant, what are your options? How can you position yourself to submit effective grant requests when every penny counts?
The good news: There are innovative pathways tailored for organizations scuffling with this very challenge:
Tap into Volunteer Power: Think about it—there's a wealth of people out there who are just as passionate about your cause and come armed with grant writing skills. They might just offer their expertise for free or a minimal fee. It's an opportunity to benefit from expertise without breaking the bank but remember, they might not always be available on demand.
Dive into Learning: Ever considered enrolling your team in a grant writing course? Think of it less as an expense and more as an investment. By equipping your team with grant writing skills through structured courses, you're setting the stage for long-term fundraising success. This not only brings the expertise in-house but also empowers your team with a skill set that's always in demand.
Try Out Subscription Services: There's a whole world of subscription-based grant writing resources waiting to be explored. It's like having an expert in your pocket, always ready to guide and advise, without the overhead of a full-time salary. However, make sure the service you choose aligns well with your specific needs.
Joining Forces with Other Nonprofits: Teaming up with another nonprofit can be a game-changer. By pooling resources and splitting the grant writing responsibilities, you not only cut down on costs but also benefit from shared insights and experiences. It's all about clear communication and a shared vision to make this collaboration truly shine.
Eye Those Capacity-building Grants: Some grants are tailor-made to boost your nonprofit's behind-the-scenes operations, including fundraising. Snagging one of these can set you up for bigger successes down the road, equipping you with the tools and resources you need. It's a stepping stone, helping you get to the point where you can secure even more grants in the future.
At the end of the day, it's about marrying affordability with quality. Your nonprofit shouldn’t have to compromise on professional and ethical standards when it comes to accessing grant writing assistance. By treading these alternative routes, even nonprofits with restrained resources can be well on their way to garnering the grants they so critically need.
Kristin Chute is a freelance writer with a passion for helping nonprofits increase their reach and impact. She has written for companies offering SaaS solutions, nonprofits directly, and donor loyalty programs.
Kristin believes in the power of nonprofit organizations to change the world. With expertise stemming from her career and personal connection to volunteering at her childhood summer camp, she shares insights to help nonprofits increase their reach, engage supporters, and amplify fundraising efforts
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