Why Commission-Based Grant Writing Is a Bad Idea:

An Ethical Perspective

If you've spent any time in nonprofit spaces—whether it's Facebook groups like "Nonprofit Resources and Grant Opportunities" or professional development seminars—you've probably encountered the perennial question: "Can I hire a grant writer on commission?" It's a tempting proposition, especially for small or startup nonprofits operating on shoestring budgets. After all, why pay upfront for something that might not yield results?

But here's the simple answer that every experienced grant professional will give you: No. Don't do it.

Commission-based grant writing, also known as contingency-based compensation, is considered unethical by every major professional organization in the field, violates generally accepted accounting principles, and can actually jeopardize your funding relationships. Let's explore why this practice is universally discouraged and what nonprofits should do instead.

What Is Commission-Based Grant Writing?

Commission-based grant writing means paying a grant writer a percentage of the grant award only if the proposal is successful. For example, an organization might agree to pay 5-10% of any grant awarded rather than paying an hourly rate or flat fee for the work performed.

On the surface, this might seem like a win-win: the nonprofit doesn't pay unless they get funded, and the grant writer is incentivized to succeed. But this arrangement creates serious ethical, practical, and financial problems.

The Professional Ethics Problem

Every major professional organization in the grant writing and fundraising field explicitly prohibits commission-based compensation:

The Association of Fundraising Professionals (AFP) states in its Code of 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."

The Grant Professionals Association (GPA) is equally clear: "Members shall not accept or pay a finder's fee, commission, or percentage compensation based on grants and shall take care to discourage their organizations from making such payments."

The Grantsmanship Center also strongly opposes this practice, warning nonprofits to never structure payment this way.

When a grant writer agrees to work on commission, they're either unaware of these fundamental ethical standards or choosing to ignore them—both serious red flags for any organization seeking professional help.

The Accounting and Compliance Problem

Beyond ethics, commission-based payment violates Generally Accepted Accounting Principles (GAAP), which govern how nonprofits must handle their finances.

GAAP clearly states that fundraising services must be paid "at the time the services are provided"—not months later when grant decisions are made. This creates several problems:

1. Pre-award costs aren't fundable: Grant budgets are designed for future project activities, not past expenses. When you write a grant in January and receive funding in July, the grant writing happened in the past. Most funders explicitly prohibit using grant funds for fundraising expenses, and trying to hide these costs in other budget lines would be dishonest.

2. Audit concerns: Not paying your grant writer when they complete their work could create issues during financial audits, raising red flags for future grant proposals.

3. Grant agreement violations: If you use awarded grant funds to pay a percentage-based fee to your writer, you may be violating the terms of your grant agreement and could be required to return the funding.

The Mathematics Don't Make Sense

Let's look at how absurd commission-based payment becomes when you run the numbers:

Imagine a skilled grant writer spends 160 hours developing a complex proposal that results in a $5 million grant award. At a fair hourly rate of $100 (standard for experienced professionals), the fee would be $16,000—reasonable compensation for high-level work.

But on a 5% commission? That's $250,000 ($1,562.50 per hour). On a 10% commission? That's $500,000 ($3,125 per hour).

This is obviously unreasonable and exploitative. Conversely, that same grant writer might spend 10 hours crafting a sophisticated two-page proposal for a family foundation that awards $50,000, while spending 20 hours on a complex government application for only $5,000. Commission-based payment wildly distorts the value of professional work.

Grant Success Isn't Just About Writing

Here's a critical truth: even the most beautifully written proposal will fail if other factors aren't in place. Funders consider many elements beyond the quality of writing:

• Alignment between the project and funder priorities

• The organization's track record and financial stability

• Community need and program feasibility

• Budget appropriateness

• Competitive landscape

• Available funding pools

• Organizational capacity and leadership

A grant writer can control the quality and persuasiveness of the proposal itself, but they cannot control whether your organization has a poor reputation, whether you forgot to submit last year's grant report, whether your board is dysfunctional, or whether fifty other organizations applied for the same limited pot of money.

Asking a grant writer to work for free unless you win is fundamentally unfair when so many success factors are beyond their control.

What Funders Think

Many grantmakers explicitly frown upon contingency fees. As Ken Ristine of the Cheney Foundation wrote: "A funder's main concern about fundraiser compensation lies in the answer to this question: what would charitable fundraising look like if it were a standard practice to pay fundraisers on commission? Public confidence and support of organizations would be undermined."

Funders want to know that your organization operates with integrity and pays people fairly for professional services. Discovering that you use commission-based payment can damage your credibility and cost you future funding opportunities.

"But We're a Small Organization Without Money!"

This is the objection that comes up most frequently, particularly in online nonprofit communities. If an organization doesn't have money to pay a grant writer, how can they pursue grants?

The hard truth is this: If you don't have any money, you're not ready to apply for grants.

Grants should never be your organization's "first dollar." Before pursuing grant funding, you need to:

1. Build a foundation through individual giving: Find people who believe in your mission and are willing to contribute to get you started. Your board members should be among your first donors.

2. Develop organizational capacity: Create the infrastructure, policies, and track record that funders want to see.

3. Demonstrate community support: Show that people value your work enough to invest in it.

4. Build financial sustainability: Grants are notoriously unreliable and time-limited. Organizations that depend entirely on grants often fail.

Investing in professional grant writing services is part of doing business as a nonprofit. If you cannot afford these services, focus first on grassroots fundraising, building your board, and establishing your programs before pursuing competitive grants.

Ethical Alternatives to Commission-Based Payment

Professional grant writers use several fair payment structures:

Hourly rates: Typically ranging from $40-250 per hour depending on experience and geographic location, with an average around $90 per hour according to the Grant Professionals Association.

Project fees: A flat fee for completing a specific grant proposal, agreed upon in advance.

Monthly retainers: Ongoing payment for regular grant writing support and strategy.

These structures appropriately compensate professionals for their time, expertise, and effort regardless of outcomes beyond their control.

What This Means for Nonprofits

If you're a nonprofit leader:

• Budget appropriately for grant writing services as a necessary business expense

• Interview grant writers and ask about their payment structures

• Be wary of anyone willing to work on commission—it suggests either inexperience or questionable ethics

• Build fundraising capacity through multiple revenue streams before pursuing major grants

• Consider starting with grant writing training for staff rather than immediately hiring consultants

What This Means for Grant Writers

If you're a grant writing professional:

• Hold firm on ethical payment practices

• Educate prospective clients about why commission-based work is unethical

• Don't undervalue your expertise by working for free with hopes of future payment

• Point organizations toward the professional codes of ethics

• Help clients understand the full scope of what impacts grant success

The Bottom Line

The question of commission-based grant writing keeps coming up in nonprofit communities precisely because it seems to solve a real problem: limited resources. But it's a false solution that creates far more problems than it solves.

Commission-based grant writing:

• Violates professional codes of ethics

• Conflicts with accounting principles

• Creates unfair compensation

• Can jeopardize grant agreements

• Damages nonprofit credibility

• Exploits professional expertise

Experienced, ethical grant writers simply won't work this way—and organizations that insist on it are setting themselves up for failure. Instead, nonprofits should view professional grant writing services as an investment in their mission, budget accordingly, and build sustainable fundraising practices that don't rely on exploiting professional services.

The nonprofit sector works best when all parties—organizations, funders, and consultants—operate with integrity, transparency, and fairness. Commission-based grant writing undermines all three.

Sources:

• Association of Fundraising Professionals Code of Ethical Standards

• Grant Professionals Association Code of Ethics

• Funding for Good: "How to Determine Grant Writing Fees"

• Puget Sound Grantwriters Association: "Ethics and Commissions"

• Giant Squid Group: "Why Good Grant Writers Won't Work for Commission"

• Grant Writing & Funding: "4 Reasons Why a Grant Writer Cannot Get Paid on Commission"

• The NonProfit Times: "Paying Commission On Grant Proposals: Don't Do It"

• Spark the Fire Grant Writing: "Will You Write My Grant on Commission? Nope. Here's Why"

Have questions about ethical grant writing practices? Join professional organizations like AFP or GPA to connect with experienced grant professionals who can help guide your fundraising journey.