This is one of the most common questions that grant writing and fundraising consultants are asked when engaging new ministries or organizations in development services. In fact, most organizations don’t ask, they just assume that this is how consultants are compensated for their efforts.
However, the answer is no. Fundraising and grant writing consultants who follow universally accepted ethics by the profession do not and will not work for commission, percentage, or bonus. Grant writing and fundraising consultants generally work on a fixed fee for services rendered.
There are several reasons for this decision. The first and foremost reason is that the ethics of our profession states that it is unethical to accept compensation based on percentages or commissions. Some like to say that this is still a debated or controversial topic, but the debate ended a long time ago. This standard is repeatedly set by the leading organizations that set the standards for our field. This includes the Association of Fundraising Professionals (AFP), the Evangelical Council for Financial Accountability (ECFA), the Christian Leadership Alliance (CLA), and the Christian Stewardship Association (CSA).
AFP’s Standards of Professional Practice include the following statements: “Members will not accept compensation based on a percentage of charitable contributions, nor will they accept fees from seekers.”
AFP argues that percentage-based compensation can encourage abuse, jeopardize the integrity of the voluntary sector and undermine the very philanthropic values on which the voluntary sector is based. AFP stands firm with its Standards of Professional Practice, which prohibits members from working for percentage-based compensation or accepting search fees.
The ECFA Seven Standards state that “Compensation from outside fundraising consultants or from an organization’s own employees based directly or indirectly on a percentage of the charitable contributions collected is not permitted.”
ECFA summarizes that “paying fundraising consultants on a percentage of donation income can be tempting for an organization with no funds to pay for fundraising. However, percentage-based payments to fundraisers Fundraising is not in the best interest of donors, nor is it consistent with the trust donors place in a charity. Paying fixed amounts to offset fundraising efforts is a good way to balance risk assessment and affordability of the charity with the integrity and professional competence of the fundraiser. “
CSA’s Code of Ethical Tracking states that all members will hire representatives at a predetermined standard fee or salary and will insist that the employee manage the personal data entrusted to them solely for the benefit of the employer. Commission or percentage of reimbursement for services rendered are considered unethical and unprofessional fundraising practices.
In addition to ethical issues, paying for services based on a flat fee recognizes the value and worth of the services provided. As Albert Anderson observes in his book Ethics for Fundraisers, “The flat fee concept recognizes the value of professional advice regardless of the fundraising outcome, which, of course, cannot be guaranteed.”
The services of a grant writing or fundraising consultant not only secure funds for an organization, but also help build the organization’s funding capacity for many years to come. Commission-based rates assume that if the money is not secured, nothing happens. This is far from the truth. Organizations are always better positioned to secure funding after working with a good grant writing or fundraising consultant. They are better organized, better prepared to apply for funding, and much more attractive to the funding sources they apply to.