Suppose you have decided to hire a grant writing company or freelancer. In that case, you may wonder about the best way to pay. First, your organization and the grant writing company will need to agree to the scope of the services and how much you will pay and sign a contract with the terms of the agreement. One of the details outlined in the contract is the payment terms.
When is payment for grant writing expected?
Grant writing companies differ a lot in when they take payment. They may require all or a portion of the price at the beginning. They may send you an invoice at the end of the project. They may offer a payment plan or a retainer fee for a certain amount of services provided. At SGR, we charge either all or 50 percent of the payment for federal grants before a project begins. The length of the project determines the remaining costs. When the project is near completion, the final payment is due. Our retainer packages have quarterly payments.
How is payment received?
Grant writers and grant writing companies may take payment via check, money order, or electronic payment. There is little difference between paying a grant writer and another service provider. At SGR, we send and accept electronic payments via ACH, bank transfer, or credit card.
Are grant writers paid on commission or a percentage of the grant award?
We can guarantee that most grant writers expect payment when services are delivered. Which means grant writers do not work on contingency (paid if the grant is awarded) or commission (paid a percentage of the grant award). This is because many grantmaking organizations only allow grant funds to pay for services provided after the award, which excludes grant writing. Therefore, nonprofits should pay for grant writing services whether a grant application is accepted or declined.
As members of the Grant Professionals Association, our organization adheres to the GPA Code of Ethics, which states the following regarding compensation.:
"Compensation:
17. Members shall work for a salary/wage or fee. Pro bono work is also allowable.
18. Members may accept performance-based compensation, such as bonuses, provided such bonuses are in accordance with prevailing practices within the members' own organizations and are not based on a percentage of grant monies.
19. Members shall not accept or pay a finder's fee [3], commission [4], or percentage compensation based on grants and shall take care to discourage organizations from making such payments.
20. Compensation should not be written into grants unless allowed by the funder."
How can my organization afford a grant writer?
Nonprofits may pay for grant writing services from cash on hand, unrestricted funds, individual donations, general operating funds, earned income, or from their salary accounts. In addition, some organizations can apply for capacity-building grants to hire a grant writer.
The majority of SGR's grant-writing customers are established organizations with multiple sources of revenue. They pay for grant writing with cash on hand, operating funds, and unrestricted funds.
Key Takeaways
Knowing how and when you will need to pay for grant writing is as important as picking the right grant writer. How to pay for grant writing will differ by each company or freelancer The details will be outlined in your contract or agreement. A few things to remember 1) Grant writers are discouraged from working on commission or contingency, so most charge an hourly rate or flat fee;
2) You can expect to pay for a portion or all of the fee upfront before services start. There may be payment plans available or retainer packages for long term projects; and 3) Your organization should set aside funds to cover the cost of the contract from an approved expense account.
