Funding Intelligence

Commission-Based Grant Writing: What Your Organisation Needs to Know

26 May 2026 · 7 min read · Dr Jess Hodgson

At some point, most small nonprofits and conservation organisations will encounter a grant writer offering to work on commission: no fee upfront, a percentage of the grant if it is awarded. It sounds low-risk. It is not.

The offer tends to appeal most to organisations that are stretched thin and cautious about committing money they do not yet have. That is exactly the population most likely to be harmed by the arrangement. Here is what the evidence shows, what Australian law actually says, and what fair pricing looks like so you can make an informed call.

The short version

Every major grant writing peak body prohibits commission-based pay.

The US Association of Fundraising Professionals, the Grant Professionals Association, the Canada Revenue Agency, and the Fundraising Institute of New Zealand all prohibit or flag the practice. Australia's Fundraising Institute does not explicitly ban it, but three independent legal barriers make it a contractual risk most organisations cannot afford to take.

This is not a fringe view held by risk-averse accountants. It reflects decades of accumulated evidence about what commission-based arrangements actually do to grant programmes, organisational budgets, and funder relationships.

What the international consensus says

The Association of Fundraising Professionals (AFP) is the largest fundraising peak body in the world, with members in more than 30 countries. Its Code of Ethical Standards is explicit: members must never base compensation on a percentage of funds raised, and must decline receiving or paying finder's fees or commissions tied to grant outcomes. These are Standards 23 and 24 of the current Code, and they apply specifically to proposal writers, not just in-house fundraisers.

The Grant Professionals Association (GPA), which focuses specifically on grant writers, is equally direct. Its Code of Ethics states that members shall not accept or pay a finder's fee, commission, or percentage compensation based on grants, and that compensation should not be written into grants unless the funder explicitly permits it.

Compensation should not be written into grants unless allowed by the funder. Members shall take care to discourage their organisations from making such payments.
Grant Professionals Association Code of Ethics

In Canada, the picture is even clearer. The Canada Revenue Agency's Guidance CG-013 on fundraising by registered charities lists commission-based fundraiser remuneration as an indicator of unacceptable fundraising. That is a regulatory finding, not a membership preference.

The UK's Chartered Institute of Fundraising does not impose an outright ban, but percentage-based arrangements with commercial fundraisers trigger specific statutory disclosure requirements under the Charities Act 1992. The Charity Commission treats opaque commission arrangements as a trustee risk.

Why the arrangement creates problems for your organisation

The concerns fall into three clear categories.

Conflict of interest. A grant writer paid on commission is financially incentivised to pursue the largest and easiest grants, not the ones that best match your mission or your organisation's actual capacity to deliver. Over a 12-month period, this can quietly reshape your funding portfolio toward projects your team struggles to execute, simply because they attracted a higher commission.

Budget inflation. Writers paid by percentage gain financially from maximising the grant ask. Experienced grant assessors identify inflated budgets quickly, and it damages your credibility with funders. The risk is not just losing one application. It is the longer-term reputational cost with the funders you need to build relationships with.

The funding deed trap. This is the risk most organisations overlook entirely, and in the Australian context, it is the most serious one.

The Australian-specific risk

Grant writing is an ineligible expense under most Australian government funding agreements.

Commonwealth grant agreements, and many state and local government equivalents, explicitly exclude grant writing costs from eligible expenditure. If your grant writer's commission is paid from awarded grant funds, you are in breach of your funding deed. That can trigger grant clawback, ACNC scrutiny, and in serious cases, fraud exposure.

Beyond the Commonwealth rules, Victorian and NSW legislation both impose specific tests on commercial fundraiser remuneration. The Victorian Fundraising Act 1998 empowers Consumer Affairs Victoria to deregister a fundraiser that has paid "excessive commission." The NSW Charitable Fundraising Regulation 2021 requires that remuneration to commercial fundraisers not be "excessive when compared to money or goods received." Neither sets a numerical cap, which creates ongoing legal uncertainty.

What fair pricing actually looks like

The mainstream market in Australia is overwhelmingly fixed-fee and hourly. A 2023 survey of Australian grant writers found that nine in ten quoted flat fees or hourly rates. Commission-based offers were the exception, most associated with newer practitioners still building their client base.

A well-structured engagement typically involves a scoping conversation, a written brief, a fixed fee quoted upfront, and a staged payment arrangement that spreads the cost across the project without tying any portion to the outcome. Staged payments address the cash-flow concern that makes commission arrangements appealing in the first place.

Before you engage any grant writer

Ask three things. How do you charge? (Flat fee, hourly, or retainer are the expected answers.) Is there any portion of your fee tied to whether we win? (The expected answer is no.) And: will your fee appear anywhere in our grant application or budget? (It should not, for most government grants.)

If cost is the genuine barrier, the right question is not whether to offer commission. It is whether the scope can be adjusted, whether a grant-readiness phase makes more sense than a full application at this stage, or whether the organisation needs coaching to build internal capacity first. A commission arrangement largely trades one set of risks for another while creating the appearance of solving a cash-flow problem.

Key takeaways

Before you sign anything with a grant writer

  • Ask whether any part of their fee is tied to the outcome. If yes, read your funding deed and seek legal advice before proceeding.
  • Check your funding deeds for "ineligible expenses" clauses. Grant writing costs are almost always on that list for government grants.
  • Commission-based pricing is a minority practice in the Australian market and is not endorsed by any peak body. It is not the industry norm.
  • If cost is the genuine barrier, ask about staged payment schedules, a reduced-scope engagement, or grant-readiness coaching as a starting point.
← Back to Impact Intel

Dr Jess Hodgson

Keystone Impact Solutions

Work with KIS

Clear pricing, fixed fee quoted upfront, no surprises.

If you are navigating grant funding for the first time, or looking for ongoing support that fits how small teams actually work, a short conversation is a good place to start.

Book a call
Stay informed

Funding intelligence, direct to your inbox.

Grant opportunities, sector updates, and practical strategy. Sent when there is something worth saying.