Wednesday, August 13, 2008

#60: Determining Your Fees for Grant Writing

Because my post yesterday was prompted by a July news article about a grant writer being investigated for fraud. I decided to see whether I could find an update. What I found was quite amazing.

Jean Cross was to collect a fee of $5.175M for writing that grant application!

Now, I like money as much as the next guy, and I certainly believe that my services are worth more than I can charge my non-profit clients. Cross' contract entitled her to 15% of the grant.

But, this is public money, earmarked for after school youth development programs.

Percentage payments from public monies has long been considered unethical. Fifteen percent to the grant writer? Come on!

Lawyer: 'No criminal activity' | | The Desert Sun: "Writer to get 15 percent

According to a Feb. 27, 2007, contract between Cross Resources and the task force, Cross would receive 15 percent of the grant - $5.175 million over five years - in return for her services in preparing the application and implementing the programs.

The driving force behind returning the grant, Reiss said, was concern over Cross' compensation. When Wilson and Davis became aware of Cross' 15 percent fee, the Desert Sands officials 'bullied' the task force into returning the grant with the intention of reapplying to the state without Cross' services, Reiss said."
So, my additional questions are:
  • What public or non-profit official authorized a contract with a grantwriter that included a fee of 15%?
  • What funding agency approved a grant application that included a budget item paying a grant writer 15% for writing the application? Or was that money included in the budget with some other (? fraudulent) description?
Even if she was slated to play a significant role in "implementing the program" Cross would have been wise to separate the fee for writing the grant from the implementation fees.

Whenever I can, I charge my clients a flat fee. When the amount of work is unclear or open-ended, I charge an hourly rate. If you work free-lance, how do you determine your fees?
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Anonymous said...

I charge strictly by the hour. I've tried to work out flat rate fees, but so far have been unable to due to the uniqueness of each proposal.

Some proposals will take only an hour, while others take many hours. I treat each proposal individually, and do some basic research on the grantor so I can get a feel for how complex the proposal will be.

I've only been working in the grant proposal writing field for a few years. I'm still relatively new,so this may change as I gain more experience

Anonymous said...

I'm glad to hear that you charge a flat fee. I think it's important for fundraisers to help inform the public about what's ethical regarding grant writing and other fundraising. I hear lay people (board members, etc.) bring up the percentage idea quite often. I always take the opportunity to describe ethical fundraising and the reasons why percentage is not a good practice. Unfortunately there are still many writers/fundraisers that operate on a commission and that keeps the idea circulating.

Anonymous said...

My experience has been that grantseekers more so than grantwriters have pushed the "commission" idea. I have been writing grants for more than 15 years and 90% of the non-profits I encountered started the conversation asking me to work on commission. Even after explaining the ethical issues with such an arrangement, these grantseekers still wanted a commission-based agreement. They saw commission-based agreements as a "sure thing" - a guarantee that they would receive a return on investment.

Many also held firm to the belief that a grantwriter would work "harder" on a grant if he/she were going to be compensated a certain % of the grant award.

This was/is flawed thinking. The only guarantee is that you, the grantwriter, will be working for free, because there are no guarantees in grantwriting.

Even "perfect" grants can be rejected for funding for reasons that have nothing to do with the grant.!

Although I raised these points - many organizations refused to operate any other way. I had no choice but to say "no thanks". My refusal to go along cost me many accounts - but I never regretted a single one.

I recommend that you treat every grant application individually and get an agreement ahead of time with the organization as to the time it will take for development. Maybe you'll charge by the hour, and maybe you'll charge a flat rate. As long as you are fair and up front, and so is the grantseeker - you'll be in good stead.

Don't give in and don't give up. You're an expert and a professional, and the right organization will recognize that and treat you as such. If they don't - it's not worth your time or your integrity to work with them.

Anonymous said...

I am very new to grant writing with about a year experience and less than that on my own. Even so, I have an hourly rate. I too have passed up many jobs because of this (one person hung up on me when I told him I would not work on a commission). It seems like everywhere I read is talking about not working on commission, but so many organizations will only pay a percent.

So my question is, are these organizations actually being funded with a grant writer written in the budget? And how are these grant writers surviving?

Anonymous said...

I am a grant writer with about 10 years of experience, mostly with government grants. If you are working on government grants, it is actually ILLEGAL, not just unethical, to use grant money for ANY pre-grant award costs.

This may not be the case for foundation grants but I usually use donnat's strategy of having a discussion up front. I've never had anyone be rude or hang up. Anyone who actually understands the art of grant writing, knows the time and energy that goes into writing a successful proposal.

The problem is that most people just don't get it.

However, I still have more than enough work to earn a very decent living.

Anonymous said...

I'd love to charge a commission for my grant writing. Even thought I charge a decent rate ($65/hr), I'd more than triple my income if I charged a flat, say 10%, fee. And, yes, I would probably work harder if I was looking forward to the possibility of a big fat commission (I can say this with a clear conscience because my success rate is very high; I do good work for my clients!)

This actually is *not* a clear-cut topic, despite the fact that some label commission-based fees as unethical:

Ruth Wahtera said...

Regarding the ethics,let's look at it from the public trust perspective. An organization is granted nonprofit status because its mission provides a benefit to the community. People contribute because they support that mission. Foundations and government -- ditto. Is the board of the organization acting responsibly if it pays a grant writer $300,000 for a grant application that took a week or two to put together when the application results in a $3M award (using your 10% commission rate)?

You may argue that you can charge whatever you can get, but the board of that organization has a fiduciary responsibility to see that the resources are used appropriately. Those funds are awarded to provide community benefit. I argue that it's unethical for the nonprofit to pay you that $300,000. I'd also argue that it's unethical for you to charge it.

Anonymous said...

Some of the ethical questions in this discussion may arise from the amounts; 10% to 15% of any award seems far too much to devote to administrative costs. I have heard that for those who work on commission basis, 1-5% is all that is expected. Some organizations are just too underfunded to compete for grants without grant writers who are willing to work on commission. I am been a writer for decades but I am just entering the grant-writing field. Am I wrong to leave room in my schedule for some commission-only work?