01/01/2017
Can I Pay Grant Writer with Award Funds?
By Cris Johnsrud, Ph.D, Pathfinder principal
A frequent question I get from prospective clients has to do with whether or not they can pay me as a grant writer after they win funding from a proposal I help them create. The justifications run something like ... “If we submit a high quality proposal, we will win. Then, we can reward you for your assistance from the money we receive from the grant or contract.”
Cris-2A variation is, “We can only afford to pay you a small amount of your fee up front, but can pay you the rest along with a bonus or reward for your efforts after we win the grant/contract.”
This is a seemingly simple and straightforward option to some prospective clients, particularly business people, but the reality is more complicated.
First, government regulations and funding agency rules (including foundations) specifically forbid grant or contract funding to be used to develop a proposal.
That is, you may not pay a grant writer out of grant funds.
This is for several reasons, the most obvious one being that funding agencies expect the monies awarded to be spent as described in the budget section of the proposal. But there are other less-obvious reasons.
First, many — if not most — funding agencies require that the proposer be willing to invest in the effort independently—that is, have “skin in the game”— to demonstrate commitment. In fact, some funding agencies require a cash or in-kind contribution (called matching funds) from the proposing organization to go along with any government funding as a demonstration of commitment to the project or program to be implemented with the funding.
The reasoning is, if a company or non-profit is unwilling to invest its own resources into a project, why should the funding agency do so? Funders need to justify awarding a grant or contract to a particular company out of many that may have applied. An organization that has dedicated its own resources to the effort is considered more likely to be successful than one that has not.
Proposal Quality and Win Probability
Second, winning an award (funding) is not guaranteed for any proposal under any circumstances. This is because funding decisions may have nothing to do with the quality of any given proposal! Tying a grant writer’s compensation to a funding award reflects theassumption that funding awards are directly tied to only the quality of the proposal.
In fact, many high-quality proposals do not win funding for a variety of reasons, including unanticipated cuts to the funding agency’s budget. Other reasons include sudden shifts in an agency’s funding priorities because of political or environmental crises (think Zika virus or the Gulf wars). In both these cases promising projects were cancelled or put on hold as funding agency budgets were reorganized and reallocated.
A third reason a proposal of high technical quality may not win funding is if the agency deems the organization to be unprepared to manage and handle the funds received. This is a particular challenge for startups that may have only 1 or 2 employees and little internal infrastructure in place, such as accounting systems or research laboratories and facilities. However, a good grant writer can help you avoid this particular pitfall by assisting you to think strategically about how you implement the project and meet the post-award management requirements.
So how is a startup or entrepreneur to obtain grant writing assistance on a budget? There are several options to explore.
Does your state have special grant writing support resources, such as Florida’s Phase 0 SBIR grant support fund?
Can you enlist the help of professors or teachers in developing a proposal application?
There are also services available on-line, though I’d recommend you do your homework before hiring a cheaper freelance writer.
The best solution is to contact a grant writer and discuss terms, such as an upfront deposit and progress payments. In this way you may acquire the grant writing assistance you need while respecting the realities of your cash flow.
My next post will focus on how to convince a funding agency to take a chance on a new startup. Stay tuned!
