Updated: Jul 20, 2022
(Originally posted June 2020 and updated September 2021)
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.
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 are considering the community need for the program, the allignment 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.
Did you know there is a unique option for applying for grants at less than 72% of the cost of hiring someone full-time? Just Write Grants can be your nonprofit's virtual grant writer, providing high-quality proposals, research, and submissions based on more than a decade of experience and multiple millions of dollars of grant funds secured. To learn more about Just Write Grants and our affordable grant writing subscriptions, click here or call 1-866-7GRANTS to speak to a grant expert today.