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Percentage As Payment: An Ethical Issue

I wish I had a dollar for every time some well-meaning friend suggested that I would be better off if I worked on commission, taking a percentage of grant dollars raised as opposed to a salary. In fact, I even have had employers suggest a similar set up. They scratch their heads when I explain to them that such an arrangement breaches a fund raiser’s code of ethics, smile politely through my impassioned speech denouncing such practices, and claim to understand when I climb down off my soapbox; though I suspect they continue to think it would be a good idea.

I can understand why someone outside the field would think this a viable and rewarding approach to compensation. Grant proposal writing is much like sales; it is a persuasive art that can result in six and seven figure grants. Why shouldn’t the hard working grantsmanship professional be rewarded based on merit rather than a straight salary? Why shouldn’t he or she share in the profits? Wouldn’t that provide an incentive to write and secure bigger and better grant dollars for his or her organization?

But grant proposal writing is not sales, and the organizations for which grant proposal writers work are not established to turn a profit. Basing a grant proposal writer’s compensation solely on percentage of dollars raised is not only incompatible with the focus of the nonprofit sector it raises some disturbing ethical issues.

Mission vs. self-gain. When a grant proposal writer’s income is tied directly to the size of the grants she secures, she may become motivated by the paycheck, tempting her to pursue larger commissions regardless of how the grant opportunities assist the organization in meeting its mission. The goal ceases to be service of clients and becomes service of self.

Profit vs. non-profit. Grant proposal writing and other fund raising activities occur in the non-profit world, and for-profit ideals have no place in that world. The Association of Fundraising Professionals (AFP) has issued strong warnings against any fundraiser accepting a percentage of funds raised as payment for services for just that reason. Individuals and organizations donate money in good faith for programs and activities they believe will ultimately serve the greater community. When the fundraiser’s needs take precedence over that relationship, it taints the philanthropic process.Foundation interests vs. self-interests. And what about the foundation that disburses funding in good faith based on what it sees in the grant proposal? It is a violation of the trust established between funder and recipient when funds are diverted from projects they have chosen to support and channeled to the persons who wrote the documents that persuaded them to make those commitments.

Paying the rent vs. the odds. On average nationally only one in three grant proposals submitted is funded. If a grant proposal writer’s compensation were based on percentage of dollars raised, he could not rely on a steady paycheck. It would be like going to work three days but getting paid for only one. The grant world fluctuates wildly at times. Some months bring in numerous grants and others bring in none. It is unrealistic to expect a professional to survive during those leaner times without a guarantee of a steady income.

Numerous professional organizations have weighed in on this topic and agree that a performance-based structure invites trouble. The American Association of Grant Professionals (AAGP) requires that its members work for “a salary or fee” as opposed to a percentage. AFP concurs. Its Code of Ethical Principles and Standards of Professional Practice is clear about where the organization stands on the issue: “Members shall not accept compensation that is based on a percentage of charitable contributions.”

AFP and AAGP are not killjoys. They are merely protecting the professionalism of our field, and there is room for merit rewards. AFP suggests that a grant proposal writer can accept bonus pay if it is established as a regular part of the organization’s compensation structure and is not tied to a percentage of dollars raised. So there is room for recognition of a job well done — just not at the expense of the donor or the organization’s mission.

Grant proposal writing is one of those professions that few understand, and these misconceptions can lead to some blurring of ethical lines, if one is not careful. Just remember that as a professional you are entitled to payment for your services at the time they are rendered. We would not expect an accountant to get paid only if his employer turns a profit. We should not expect grant proposal writers to get paid only if the funding source approves the proposal.

 

About the Contributor: Karen Hodge

Karen is Assistant Vice President for University Advancement at Walsh University. She is responsible for preparing and submitting grant proposals to foundations, corporations, and government sources, and assisting faculty members as they pursue grant opportunities within their disciplines. She also prepares background research on potential donors for use as the University works to secure external support.

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