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This post discusses contingency fees. It is one of an ongoing series on Grant Writing as a Career. Earlier posts discussed hourly fees and flat fees, consultant retainer fees and prospect research fees, proposal review and editing fees, and ordinary and general consulting business expenses.

 

The odds of a given proposal being funded vary with the program, the funder, and the competition at the time of application. They vary with the applicant’s experience as a grant seeker, its track record in managing prior grant awards, and the merits of its problem-solving strategies. Seldom is a proposal’s positive outcome a certainty.

 

Contingency Fees:

Most grant writers value their work highly enough to require hourly or per diem or per-project compensation, rather than accept deferred payment made contingent upon grants being awarded. And most clients value consultants’ expertise and work products highly enough to pay for them upfront as agreed upon in a contract. However, there are exceptions.

 

Some clients expect consultants to develop a grant proposal for free and to get paid only if or when it is funded. They do so even though their personnel don’t work for free or on contingency themselves. Such clients shift to the consultant the risk of a grant not being awarded. Often, although not always, the same clients expect, sometimes naively, to use part of a grant, if awarded, to pay the consultant. This all-or-nothing arrangement makes any payment contingent upon the outcome of a grant proposal.

 

Zero-Sum Risks:

Some consultants are averse to the risk that they will earn nothing for creating a proposal; others accept the risk. Those who write proposals as a sidelight tend to be less risk-averse than those for whom writing proposals is a primary source of income.

 

Contingencies may leave a consultant penniless while the client walks away with a completed proposal. Such work-products often can be reworked and submitted to the same funder or to others. The arrangement implies that the value of a consultant’s time, effort, and work-product is zero. Such undertakings become speculative at best and desperate at worst.

 

In addition to undervaluing the consultant’s expertise, clients too often try to pay for a funded grant out of the grant itself. Such an expectation is problematic at best. In the federal grant context, cost principles in OMB Circulars A-21 and A-122 prohibit the recovery of costs (including grant writing costs) incurred before a grant award unless the sponsoring agency allows those costs. Whether such pre-award costs are allowable is stated in the proposal solicitation. In the private sector, foundations may exclude both pre-award and post-award proposal development as allowable costs. As a rule, they also tend to abhor the use of their grant awards to pay contingency fees or commissions to grant writers.

 

A later related post will discuss commissions, ethics, and pre-award cost recovery.

 

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One Comment

  1. Enlighting information – thanks for sharing


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