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Private foundations tend to award capacity-building grants to small or large organizations that have already-proven staying power. Such grants are not intended to rescue failing enterprises, nor are they intended to support delivery of direct program services.


Sometimes a pre-existing relationship with a specific funder is a prerequisite for being an eligible applicant; other times, it is not. Potential applicants should review each potential funder’s preconditions and verify that they satisfy them before they decide to apply to it for funding.


Capacity Building Graphics




Ultimately, capacity building proposals focus on an organization’s internal needs, particularly, on improving its ability to achieve and fulfill its mission and to deliver services. Proving a record of accomplishment in this area is essential. Other aims are to increase an organization’s long-term sustainability and effectiveness. Consequently, seeking a capacity building grant often follows upon an organizational self-assessment by board and key staff.


Allowable Uses


As always, allowable uses of funds depend upon the purposes and priorities of each specific grant maker. Among the many potential uses an applicant may propose for a capacity building grant are:

  • Fund development planning
  • Revenue diversification
  • Fundraising (e.g., developing grant proposals, donor recruitment campaigns)


Other Uses


Beyond or in lieu of resource development, foundations also may favor:

  • Organizational assessment or self-assessment
  • Evaluation of overall organizational effectiveness
  • Strategic planning
  • Improving governance and management
  • Board/staff development (e.g., workshops or conferences)
  • Leadership development
  • Leadership succession planning
  • Marketing/community outreach
  • Volunteer management
  • Membership development (e.g., recruitment and retention)
  • External communications (e.g., website improvements)
  • Computer skills development (e.g., using donor databases)
  • Organizational mergers or restructuring
  • Financial management
  • Media relations
  • Technology integration (e.g., hardware or software upgrades)


This post is one of a series. Other posts discuss various business expenses and fees as well as arrangements for paying for grant-writing services.


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.


Contingency Fees Graphic


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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