From time to time there is an online debate on whether or not grant writers can charge their clients for services on a commission or percentage bases.
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, at a 10% commission the grant writer would receive $10,000. If the award were $1 million the grant writer would be due $100,000. The greater the value of the grant award the more the consultant stands to make, without any increase in the amount of work performed.
The reasons for not charging a commission or percentage are more based in business and accounting principles.
The process of grant writing and applying for grants is a fund-raising expense not a program expense. Most grant awards are for programs and program expenses. Therefore it would be unethical for the accountant to take funds from program allocations to pay for fund-raising expenses.
The act of grant writing is a pre-acquisition cost. It is logical that the applicant has to write the grant proposal before they submit before the grant proposal is reviewed and awarded. The grant period, or the time the grant award monies can spent, are usually for cost occur on after the grant award is received, or as a post-acquisition cost (with a few exceptions). Grant funding seldom covers cost which occurs prior to the grant award being approved.
Some of this problem originates in part with government budgets which states that a certain percentage of the budget can be allowed for consultant fees. The seeming logic is that – since the grant writer is a consultant then they should be entitled to that percentage of the budget.
All personnel fees, PIs, staff, and consulting, must be calculated on an annual salary or hourly rate bases. None of these line items can be calculated on a straight percentage of the total grant basis.
The funders themselves do not like to award grant funding to grant applications which pays the grant writer a percentage. This is because funders want to see most of their money going to meeting the mission and priorities of their funding purpose.
Finally, certified grant writers put the philanthropic interest above their personal gain.
All professional associations in fundraising in general, and grant writing specifically, hold that charging a commission or percentage of the grant award is an unethical practice.