Grant Services: Payment by Commission, Percentage, or Fixed Fee

From time to time there is a debate online about whether or not grant writers can charge their clients for services on a commission or percentage basis.

The basic argument for charging clients a commission/percentage is that the consultant can make more money. For example, on a grant with an award amount of $100,000, with a 10% commission, the grantmaker would receive $10,000. If the award were $1 million, the grantmaker would have to pay $100,000. The higher the value of the grant award, the more the consultant will earn, without increasing the amount of work done.

The reasons for not charging a commission or percentage are based more on business and accounting principles.

The grant writing and application process is a fundraising expense, not a program expense. Most grants are for programs and program expenses. Therefore, it would be unethical for the accountant to take funds from program allocations to pay for fundraising expenses.

The deed of concession is a pre-acquisition cost. It stands to reason that the applicant would have to write the grant proposal before submitting it before the grant proposal is reviewed and awarded. The grant period, or the length of time grant money can be spent, typically occurs after the grant award is received, or as a post-acquisition cost (with a few exceptions). Grant funding rarely covers the cost that occurs before the grant award is approved.

Part of this problem stems in part from government budgets that state that a certain percentage of the budget can be allowed for consultant fees. The apparent logic is that since the grant maker is a consultant, he should be entitled to that percentage of the budget.

All staff, PI, staff and consulting fees must be calculated on an annual salary or hourly rate basis. None of these line items can be calculated as a direct percentage of the total grant base.

Funders themselves do not like to award grant funds for grant applications that pay a percentage to the grant author. This is because funders want the majority of their money to go toward fulfilling the mission and priorities of their funding purpose.

Finally, Certified Grant Writers put philanthropic interest before personal gain.

All professional fundraising associations in general, and grant writing in particular, maintain that charging a commission or a percentage of the grant award is an unethical practice.