Budgeting for Grant Writing Fees

Ami: By now you should have some answers, but I'll try to help. The non-profit should have the funds in hand to pay you for your work, otherwise there'll be a very long wait before you're paid. And what do you do if the grant isn't funded? Those are two very practical reason for not charging a percent of the grant. I believe that payment on a percent basis applies to major fundraising campaigns. I've read the material that the cost for a grantwriter shouldn't be written into a project budget. On the other hand, administrative costs in an operating budget can include costs generated by consultants such as a grantwriter. Check with the potential funder first. Finally, I prefer to charge an hourly rate rather than a flat fee. I always read the RFP/RFA before I agree to write a proposal. I've found that some apparently short proposals require many hours of research up front.

Ami in San Jose, California said: I have previously written grants as a volunteer but am starting my own business and need some advice. I have read the debate over flat fee vs. % and am in agreement with charging a flat fee in order to maintain my integrity and not damage donor relations with my client. However, how can they budget for my expenses in an "ethcal" way. I have been approached by nonprofits (mostly startup) who want advice on how to pay my fee. Should they seek a private donation or can they write it into an operating budget, just not a project budget? Please help so that I can better help my clients while I'm making the transition from volunteer to business woman.

Ami,
The Association of Fundraising Professionals clearly state that any fund raising on a percentage basis is unethical. All the best practices for not for profits that I have examined say the same thing. Raising money to pay a grant writer should be handled like any other operating expense and should be included in the current budget that was approved by the board of directors prior to offering you a contract.

This is useful information, I wished I had seen this before. I am a new masters graduate in social work and just successfully completed my 1st grant. I did not include my fee expenses, and I am now learning the NGO has no funds for me in their operating budget. Also I am contracted on a % basis, I will check out the Association of Fundraising Professionals website for sure.

It is up to you how you want to be paid. If you want to accept the risk of not being paid at all because payment was made contingent on funding that is up to you. If you prefer not to take that risk (and most of us don't) it is up to you to choose between a project rate (eg, $2000/proposal)and an hourly rate (eg $25/hr). A project rate can work in your favor if you can work efficiently because you know the subject area and have written before. An hourly rate can work in your favor if you find it hard to estimate how much time it'll take to write a proposal because the subject area is unfamiliar or because either the client or the funding program/source is unfamiliar. There are many good reasons to subscribe to the AFP premise that writing on a contingency basis is a bad idea; merely doing so because the AFP frowns on it is not one of them. One last thing -- it's a very bad idea to inquire too closely about how the client/employer plans to pay you for your services and an even worse idea to be put in the position of having to suggest to it how it should pay you. Let the burden of how to pay you -- with what fund account and on what timetable -- remain as much as humanly possible with the client/employer!