- December 12, 2021
- Posted by: Robert Brown
- Category: Investing
This is one of the most common questions asked of grant writing and fundraising consultants when engaging new ministries or organizations in development services. In fact, most organizations don’t ask, they just assume that this must be how consultants are compensated for their efforts.
However, the answer is no. Grant writing and fundraising consultants that follow the ethics universally accepted by the profession do not and will not work on a commission, percentage, or bonus basis. Grant writing and fundraising consultants generally work on a flat fee for services provided.
There are a number of reasons for this decision. The first and foremost reason is that the ethics of our profession state that it is not ethical to accept percentage or commission based compensation. Some like to say this is still a debated or contested issue but the debate ended a long time ago. This standard is repeatedly stated by the major 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 shall not accept compensation that is based on a percentage of charitable contributions; nor shall they accept finder’s fees.”
AFP holds that percentage based compensation can encourage abuses, imperils the integrity of the voluntary sector, and undermines 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 finder’s fees.
ECFA’s Seven Standards state that “Compensation of outside fund-raising consultants or an organization’s own employees based directly or indirectly on a percentage of charitable contributions raised is not allowed.”
ECFA summarizes that “paying fund-raising consultants on a percentage of gift income can be tempting to an organization with no funds to pay the fund-raiser. However, percentage-based payments to fund-raisers are not in the best interest of donors, nor are they consistent with the trust that donors place in a charity. The payment of fixed amounts to compensate for fund-raising endeavors is an appropriate way to balance the charity’s evaluation of risk and affordability with the fund-raiser’s professional integrity and competence.”
CSA’s Code of Ethical Pursuit states that all members shall employ representatives on a predetermined standard fee or salary basis and will insist that the employee manage personal data entrusted to him solely for the benefit of the employer. Commission or percentage reimbursement for services rendered are deemed unethical and unprofessional practices in fundraising.
In addition to the ethical issues, paying for services based on a flat fee acknowledges the value and worth of the services provided. As Albert Anderson observes in his book Ethics for Fundraisers, “The set fee concept recognizes the value of professional counsel independently of the fund-raising outcome, which, of course, cannot be guaranteed.”
The services of a grant writing or fundraising consultant not only secure funds for an organization, but they also help to develop the funding capacity of the organization for many years to come. Commission based fees assume that if no money is secured then nothing happened. This is far from reality. Organizations are always better positioned for securing funds 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 to which they are applying.