Grant Seeking on Contingency - Why Not?
At least once a month, I have a conversation that starts like this:
"We are a small/poor/start-up nonprofit and we just don't have the funds to pay for grant seeking - but we really, really need grants! Can you write grants for us and we will pay you a percentage of what gets funded?"
Attorneys often work on contingency. Salespeople usually work on commission. Why can't that same model apply to grant seekers?
There are several good reasons why contingency grant seeking isn't a good idea:
It is unethical. The Association of Fundraising Professionals (AFP), the Grant Professionals Association and other professional organizations require members agree to a set of ethics. Here's a direct quote from the AFP ethical standards: "Members shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees." Other organizations have similar verbiage. See more at http://www.grantprofessionals.org/about/ethics.
A grant seeker willing to work outside the ethics of their professional is either IGNORANT of the ethical standards or willing to IGNORE them.
Funders won't pay the fees. If you present an honest budget in your grant proposal, you must list the "commission" to the grant writer. This will automatically disqualify you for many grants (especially government) and make your proposal less appealing to other funders. Funders want their funds to feed the hungry, house the homeless, save the planet, etc. They don't want to pay a grant writer - they consider that to be an administrative or general operating expense.
It's not fair to the organization. Let's say I agree to seek grants for your organization for a 3% contingency fee. What will happen? If I spend 40 hours working on a million dollar federal grant, do you really want to pay me $30,000 for that work? That’s $750 an hour.
It's not a good motivator. If my income were solely derived from successful grants, I would be tempted to do the following: Spend half my time seeking those million dollar grants and half my time seeking smaller grants that are more likely to be approved. While this would be a great strategy for my wallet, this is not a good mix of grantors for your organization. You need a variety of funding streams - large, medium and small grants. If I am only focused on the "big money" or the "easy money," you are not well served.
Despite all the ethical and logical reasons this is not a good idea, I often hear that there are grant seekers willing to work on a commission. My advice: if you meet one of them, run the other direction. Stick with a grant seeker who understands their profession and willing to work in an ethical manner.