Chapter 9: Ethical Considerations in Grant Writing

As you have likely figured out by now, grant writing is a significant activity for many public and nonprofit organizations seeking funding for their projects or initiatives. While the primary goal is to secure financial support, it is essential that the process is approached with a high level of integrity and ethical consideration. Ethical grant writing not only reinforces the trustworthiness of an organization but also ensures the sustainability of funding relationships over time. There are several ethical considerations in grant writing, such as honesty in presenting data, respecting funder guidelines, managing conflicts of interest, and maintaining transparency and accountability.

These are such consequential elements of the grant seeking and funding system that the associations of grant writers, such as the Association of Fundraising Professionals (AFP) have codes of ethics to lay out each item (see AFP Code of Ethical Standards, 2023; All Rights Reserved. Used with permission).

Michael Rosen, who at the time was the Executive Vice President of Client Development at Legacy Leaders, Inc., now known as Donor Compass, wrote that one of the biggest misconceptions when it comes to the study of ethics is that “good” people don’t need to worry about it. “Good” people can simply follow Jiminy Cricket’s advice, “Let your conscience be your guide”, right? Not right. Establishing and maintaining trust with funders and with the public is 100% necessary for organizations who need to raise money. There are lots of elements that can influence trust, however ethics are a major piece of the puzzle. Let’s go over a few of the major issues.

Relationships with Funders

In the spring of 2024,Will Zweigart, the Executive Director of Flatbush Cats, a Brooklyn-based cat rescue organization, received an email from a donor that caught his immediate attention. The email, addressed to two development staff and copied to Zweigart, was described by him as "inappropriate, unprofessional" and "severely out of line with our values." This incident was strike three for Zweigart, who noted that the donor had been problematic in the past. Within an hour, Zweigart had contacted the donor and terminated the organization's relationship with them, returning the donor’s gift of $28,860. Despite the immediate financial loss, he emphasized that the comment made by the donor was so misaligned with the organization’s values that there was no possibility of future collaboration.

While donors behaving inappropriately is, unfortunately, relatively common, it is their responsibility and yours to maintain professional relationships and behavior at all times. This can be difficult, as the donor has quite a bit of leverage over the grantee, and, unlike Flatbush Cats, most organizations are not in a position to return money, even if they find the donor to have been behaving unprofessionally

On the other hand, while it is important for you to learn as much as you can about your reading audience and try to develop a connection through a shared vision, you must keep some distance from funders. At no time should you contact the trustee of a foundation or speak with a trustee about a foundation grantmaking decision, even if you encounter the person outside the foundation environment and even if the trustee is your own father or mother. While it is generally okay to ask for feedback from the grant’s manager after a rejection, approach this carefully and, when you are told the reason for a “no,” accept it with grace. If the door is still open to future proposals, ask questions about how you can best approach the foundation with a different proposal next time.

Managing Conflicts of Interest

A conflict of interest, as defined by the Minnesota Department of Administration’s Office of Grants Management’s Policy 08-01, occurs when a person has actual or apparent duty or loyalty to more than one organization, and the competing duties may result in actions adverse to one or both parties. Conflicts of interest can be actual, potential, or perceived, and exist even if no unethical, improper, or illegal act results.

Actual conflicts of interest arise when a decision or action compromises a duty to a party without immediate action to eliminate the conflict. Examples include using one’s position for personal advantage or having a financial interest in the other party's organization.
Potential conflicts of interest may exist if one party has a relationship that could influence their decision or recommendation affecting that relationship. For example, serving in a volunteer capacity for another party may create a conflict depending on the nature of their relationship.
Individual conflicts of interest benefit an individual directly or through indirect gain to an immediate family member, business, or organization with which they are involved.
Organizational conflicts of interest occur when a grantee’s objectivity in carrying out the grant is impaired due to competing duties or loyalties, or when they have an unfair competitive advantage through unauthorized proprietary information.

Conflicts of interest in grant writing can occur when personal interests interfere with the organization’s interests or the interests of the funders. These conflicts might include personal relationships with funders or financial incentives that could influence the grant writer’s decisions. Ethical grant writing involves identifying, disclosing, and managing these conflicts of interest to avoid any bias or misrepresentation in the grant application.

Organizations should have clear policies in place to handle conflicts of interest. This could involve having multiple people review and approve the proposal, ensuring that no single individual has undue influence over the grant writing and submission process. Personal and professional relationships, such as family members or close friends, current collaborators, or recent supervisors, can all pose potential conflicts of interest.

Interests can include various types of commitments, duties, obligations, and values, such as contractual or legal obligations, loyalty to family and friends, financial interests, and professional duties. For example, loyalty to one's employer and a family business could conflict if the goals of these two entities clash. These potential interests can be categorized into four types:

Direct interests: These include an individual's personal self-interest, family obligations, and personal business interests.
Indirect interests: These involve the personal, family, and business interests of people or groups with whom the individual associates.
Financial interests: These encompass anything of monetary value, including services rendered, commercial dealings, or share ownership.
Non Financial interests: These involve personal or familial relationships and other potential sources of bias.

Conflicts of interest can take various forms and involve multiple interests, both personal and professional. Common types of conflicts of interest include (but are not limited to):

Self-dealing: This occurs when a person acts in their own best interest in a transaction at the expense of the organization or their clients. An example of self-dealing in grant writing could involve someone who has insider knowledge about an upcoming grant opportunity from their organization. Suppose a grant writer is a close friend of this person. The grant writer may obtain detailed, privileged information about the grant application process, requirements, and selection criteria from their friend, giving them unfair advantage over other applicants.
Nepotism: Favoritism towards family members or friends, such as hiring a relative despite their lack of qualifications over more suitable candidates, is a form of nepotism. An example of nepotism in grant writing could occur if a program manager is responsible for evaluating and recommending proposals for funding within their organization. If their family member or close friend submits a proposal, the grant writer might favor this proposal over others, regardless of its merits.
Multiple employers: Working for multiple organizations in the same sector can lead to conflicts of interest, especially if proprietary information from one job is used to benefit the other. An example of how working for multiple organizations as a grant writer may create a conflict of interest could involve a grant writer employed by two nonprofit organizations that both apply for the same grant. In this scenario, the grant writer has access to proprietary information and strategic plans from both organizations, which could lead to several potential conflicts:

Sharing Confidential Information: The grant writer might inadvertently or deliberately share one organization's confidential strategies, data, or approaches with the other organization, giving one an unfair advantage.
Prioritizing One Organization Over Another: The grant writer may prioritize the interests of one organization over the other, perhaps because of a personal preference or stronger loyalty, leading to a biased effort in preparing the grant applications.
Divided Attention and Resources: The grant writer may struggle to equally allocate time and resources between both organizations, potentially leading to a lower quality of work for one or both applications.

For example, if Organization A and Organization B are both applying for a highly competitive grant, the grant writer might use insights gained from working on Organization A's proposal to strengthen Organization B's application. Alternatively, the grant writer might spend more time and effort on Organization B's application because they feel a stronger personal connection or receive higher compensation from Organization B.

This situation creates an inherent conflict of interest, as the grant writer's divided loyalties and potential for biased actions compromise the fairness and integrity of the grant application process for both organizations.

Gifts: Accepting gifts from external parties to gain an advantage can improperly influence judgment and is a conflict of interest. An example of how accepting gifts can create a conflict of interest for a grant writer involves a situation where a grant writer receives a significant gift from a potential grant applicant. Here’s how this can lead to a conflict of interest:

Imagine a grant writer working for a foundation that awards grants to various nonprofit organizations. A nonprofit organization, eager to secure funding, gives the grant writer an expensive gift, such as a luxury item or a free vacation package, as a token of appreciation. This gift could influence the grant writer's impartiality and decision-making process.

The potential conflicts include:

Bias in Evaluation: The grant writer might feel obligated to favor the nonprofit that gave the gift, consciously or unconsciously giving their proposal a higher score or more positive review than it might objectively deserve.
Undermining Fairness: Other applicants, who have not provided such gifts, may be at a disadvantage, as the grant writer's impartiality is compromised. This undermines the fairness and integrity of the grant awarding process.
Pressure to Reciprocate: The grant writer may feel pressured to reciprocate the kindness shown by the gift-giving nonprofit, leading to preferential treatment.

For example, if the grant writer receives a gift from Nonprofit Organization X and then later evaluates grant proposals, they might rate Organization X’s proposal more favorably, despite other organizations having stronger proposals. This unfair advantage could result in Organization X receiving funding over more deserving applicants, solely because of the gift’s influence.

Ethical grant writing requires transparency and adherence to guidelines to manage these conflicts. By maintaining clear ethical standards and managing conflicts of interest diligently, grant writers can ensure their work supports the best interests of both the organizations they serve and the integrity of the funding process.

Respecting Funder Guidelines

Each funding source typically has specific guidelines that dictate the kinds of projects they support, the format and scope of proposals, and the reporting requirements. Adhering to these guidelines is a fundamental aspect of grant writing ethics. It demonstrates respect for the funder’s objectives and compliance with their procedures. Moreover, it ensures transparency and builds trust between the grant writer, the applying organization, and the funder.

When funders outline their requirements, they do so to streamline the evaluation process and ensure that their resources are allocated to projects that align with their mission and goals. By following these guidelines meticulously, grant writers show that they are attentive to the funder’s priorities and are committed to using the funds responsibly. This adherence not only increases the chances of the proposal being considered but also fosters a positive relationship with the funder, which can be beneficial for future funding opportunities.

Ethical dilemmas may arise when there is pressure to tweak a project’s goals to fit a grant’s focus areas artificially. This situation can occur when an organization is in desperate need of funding and may be tempted to make their project appear more aligned with the funder’s priorities than it truly is. Such practices can compromise the integrity of the project and the organization.

Grant writers should ensure that the project genuinely aligns with the funder’s interests and that any adjustments to the project do not compromise its core objectives or the mission of the organization. Ethical grant writing involves a thorough assessment of both the project and the funding opportunity to ensure a genuine match. This practice not only respects the funder’s guidelines but also upholds the integrity of the organization’s mission and goals.

Artificially aligning a project with a funder’s focus areas can have several negative consequences. If the project does not genuinely fit the funder’s priorities, it may fail to meet their expectations, leading to dissatisfaction and potentially damaging the organization’s reputation. Furthermore, if the project is awarded funding based on misrepresented alignment, it may struggle to deliver the promised outcomes, resulting in a waste of resources and a loss of trust from both the funder and the community the organization serves.

In cases where a project does not align well with a particular grant, it is more advisable to seek alternative funding sources. There are numerous funding opportunities available, each with its own set of priorities and focus areas. By carefully researching and identifying funders whose goals align with the organization’s project, grant writers can find more suitable and ethical funding sources. This approach ensures that the project remains true to its objectives and that the organization can deliver impactful results without compromising its values.

Honesty in Presenting Data

Honesty, transparency, accountability, and sustainability are the cornerstones of ethical grant writing, directly impacting an organization's credibility and its relationships with funders. Misrepresenting data (in a grant proposal or when reporting at the end of a grant cycle) is not only unethical but also fraught with risks and repercussions.

Brenda K. Banks, the Executive Director of Angels on Wheels in Omaha, Nebraska, serves as a stark example of the consequences of unethical grant writing. In 2018 and 2019, Banks submitted falsified documents to the Nebraska Environmental Trust (NET) and the Nebraska Department of Environment and Energy (NDEE) to secure additional funds. Her deceitful actions, which included altering checks and invoices and fraudulently obtaining a Paycheck Protection Program (PPP) loan, ultimately led to her conviction for wire fraud. The federal court sentenced her to four months in prison and imposed a substantial fine.

The story of Brenda K. Banks serves as a powerful reminder of the severe consequences of unethical behavior in grant writing. Beyond legal repercussions, dishonesty in grant applications can lead to a loss of trust and credibility that is difficult to rebuild. Once an organization is found to have submitted falsified information, it may face increased scrutiny and skepticism from funders, making it more challenging to secure future grants. This kind of grant fraud not only affects the organization but also the communities and causes it aims to support.

Grant fraud occurs when award recipients deceive the government about their use of award money, engaging in actions that the Department of Justice characterizes as "lying, cheating, and stealing." Such fraudulent behavior leads to inefficiencies and waste in the government, but the repercussions for the offending entities can be severe. The Department of Justice Office of the Inspector General outlines potential consequences, including debarment from future funding, administrative recoveries of funds, civil lawsuits, and criminal prosecution. As grant agreements are legally binding contracts, grantees are obligated to use their funds as outlined and act with integrity when applying for and reporting their actual use of funds. Properly tracking fund usage and maintaining adequate supporting documentation are also critical responsibilities.

Typical issues in grant fraud include unilaterally redirecting funds from their intended purpose, failing to adequately account for transactions, and providing false or misleading information in applications or reports. Fraud can take many forms, including deception, bribery, forgery, extortion, theft, conspiracy, embezzlement, misappropriation of funds, false representations, concealing material facts, and collusion. Examples of fraudulent activities include commingling grant funds with other funds and submitting false or altered documents for reimbursement. Instances of such fraud have occurred in academia, as seen in the cases of a Morgan State University professor who used $200,000 in grant funds for personal expenses, resulting in a three-year prison sentence, and a former University of Florida nuclear engineering professor who defrauded NASA funds, leading to a six-month prison sentence. These cases highlight the serious consequences of grant fraud and underscore the importance of adhering to ethical practices in grant management.

At the heart of ethical grant writing is the accuracy and honesty of the information presented in the grant application and then in the reporting. Misrepresenting data to make a proposal appear more appealing or to make a report line up with guidelines is fundamentally wrong and can have long-term negative consequences for the organization. Funders rely on accurate data to make informed decisions about where to allocate resources. When data is falsified, it can lead to the failure of a project to deliver on its promises, resulting in a loss of credibility and future funding opportunities.

Building and maintaining trust with funders is essential for the long-term success of any organization seeking grant funding. This trust is built on a foundation of honesty, transparency, and accountability. Grant writers must ensure that all data presented in their applications is accurate and that any potential challenges are clearly communicated. By doing so, they not only increase their chances of securing funding but also strengthen their organization's reputation and relationships with funders.

Transparency and Accountability

The term “transparency” means something allowing light to pass through so that objects behind it are visible. Transparency in our context refers to operating openly so that one’s process and products can be evaluated fairly. Thus, transparency is the bedrock of ethics, embodying values like honesty, respect, and responsibility. It's essential for creating an ethical climate within organizations and should be evident in all communications, practices, policies, meetings, and other interactions.

Transparency fosters trust and strengthens relationships. Being honest and truthful helps to build solid foundations for relationships, as respect builds trust, and trust builds relationships. This is vital for your purposes because people are more likely to give money to those they trust.

Transparency in grant seeking and administration means being open to scrutiny about your processes. This involves providing reasons for decisions and the exchange of information. Transparency also provides assurance that your processes are being carried out appropriately and in accordance with any applicable requirements. According to an international survey conducted by Harris Poll, transparency and accountability are the strongest indicators of ethical behavior. Accountability involves grantees, officials, and decision-makers being able to demonstrate and justify the use of public resources, necessitating that all parties keep appropriate and accessible records.

As actress Anna Farris said in her book, Unqualified, "Don’t do anything that you wouldn’t want to see on the front page of the newspaper.” Perhaps today, this should be expanded to include not doing anything you wouldn’t want your grandma to come across be ashamed to see on TikTok.

Grant Transparency Strengthens Accountability

Grant programs need effective communication to strengthen accountability. Improving transparency is not just about making numbers, data, and reports available to the public. It's also about communicating in ways that advance the improvement of outcomes and operational quality, strengthen accountability, and demonstrate results.

Achieving transparency in grants administration involves ensuring that:

Decisions relating to grants are impartial, appropriately documented and published, publicly defensible, and lawful.
Grants administration incorporates appropriate safeguards against fraud, unlawful activities, and other inappropriate conduct.

This includes establishing appropriate internal controls for grants administration, such as making different officers responsible for assessing grant applications, giving financial approval for expenditures, and ensuring checks and balances at various stages of the grants administration process.

Transparent and systematic grant administrative processes should be established and adhered to, with grant funds allocated based on clearly defined criteria.

Pre-Award Accountability Measures

Before applying for funding, implementing accountability measures can increase your likelihood of winning awards and save your team time in the long run. Key measures include:

Maintaining thorough and accessible application records: Having a standard process in place for tracking the grants you apply to holds both your team members and your organization accountable for the success of your grant portfolio.
Implementing a grant management system that is accountability-focused: Using outdated processes can lead to inconsistency and miscommunication. A modern Grant Management Software (GMS) system ensures adequate internal control systems are in place.
Investing in training at all levels: Training staff and those involved with grant management in regulations, proper GMS usage, and internal grant guidelines is crucial.

Award Management Accountability Measures

Once a grant is awarded, it's essential to ensure the accountability measures planned during the pre-award phase are integrated into daily tasks to maximize outcomes. These measures include:

Comparing expenditures to projections: This helps ensure grantees do not overspend and funds are expended within the predetermined grant period.
Using a system to audit performance consistently: Regular evaluations keep your team accountable and allow for adjustments to improve accountability.
Keeping grant information safely accessible to all integral parties: Transparency in managing grants ensures everyone understands how their tasks contribute to organizational accountability.

Closeout Accountability Measures

At the end of a grant cycle, increased future accountability can be achieved through:

Shifting reporting from compliance-centric to performance-centric outcomes: Demonstrating success and securing future funding requires relating costs to performance.
Personalizing reports for stakeholders: Tailoring reports to reflect the specific metrics of each grant showcases performance effectively.
Evaluating outcomes and adapting processes: Continuously striving for accountability by adjusting processes based on evaluation outcomes ensures ongoing improvement.

The Ethics of Compensation in Grant Writing

Grant writing is a specialized skill that requires time, talent, and resources. The ethical considerations surrounding compensation in grant writing are critical, particularly when discussing practices such as commission-based pay. Writing grants on commission, where a grant writer only gets paid if the grant is awarded and the payment is a percentage of the total grant, is widely considered unethical and is prohibited by leading professional associations such as the Grant Professionals Association (GPA) and the Association for Fundraising Professionals (AFP). This essay explores the ethical implications of such compensation practices and emphasizes the necessity of fair and transparent compensation for grant writers.

The primary ethical issue with commission-based compensation is that it does not fairly compensate the grant writer for their work. Writing a grant proposal involves significant effort and expertise, and the grant writer deserves to be paid for this work regardless of the outcome. Many factors beyond the grant writer's control can influence whether a grant is awarded. For instance, the organization applying for the grant may have a poor reputation, inadequate infrastructure, or may have failed to comply with previous grant requirements. These factors can result in a denied grant application, even if the proposal itself is well-written and compelling.

The GPA and AFP explicitly prohibit commission-based compensation. The GPA's Code of Ethics states, "Members shall not accept or pay a finder's fee, commission, or percentage compensation based on grants and shall take care to discourage their organizations from making such payments." This stance is grounded in the principle that grant writing is a professional service that should be compensated based on the time, effort, and expertise involved, not on the success of the grant application.

Grantmakers themselves typically do not allow grant funds to be used for pre-award activities, including grant writing. Using grant funds to pay for past activities is a violation of grant agreements and can result in the withdrawal of funding. Grantmakers want their funds to directly support the programs and services outlined in the grant proposal, not to cover administrative costs incurred prior to the award. This reinforces the ethical argument that grant writers should be compensated at the time services are provided, rather than based on the outcome of the grant application.

Commission-based compensation can lead to inflated grant requests, as grant writers might be incentivized to increase the grant amount to maximize their commission. This practice undermines the integrity of the grant application process. Grantmakers are vigilant about budget inflation and are likely to reject proposals that appear padded or unrealistic. Moreover, the philanthropic community relies on trust and transparency. If grant requests are consistently inflated to cover commissions, it could erode trust in the grantmaking process and damage the overall reputation of philanthropy.

Fair compensation for grant writers should be based on the time and expertise required to develop a high-quality proposal. For example, if a grant writer spends 75 hours on a federal grant proposal and charges $95 per hour, their compensation would be approximately $7,125. In contrast, a 5% commission on a $5 million grant would amount to $250,000, which is disproportionately high and unjustifiable. The ethical approach is to pay grant writers a reasonable fee for their work, ensuring they are fairly compensated regardless of the grant's outcome.

The ethical issues surrounding commission-based compensation extend beyond just the payment structure. They also touch on broader ethical considerations in grant writing and fundraising. Grant writers should prioritize the mission and needs of the organizations they serve over potential financial gain. Accepting commission-based compensation can create a conflict of interest, where the grant writer's financial incentives may not align with the best interests of the organization or its beneficiaries.

Furthermore, ethical grant writing involves transparency and accountability. Organizations should clearly communicate their compensation practices to grant writers and ensure that all parties understand the terms of their engagement. This fosters a culture of trust and mutual respect, which is essential for effective collaboration and successful grant outcomes.

Summarily, commission-based compensation for grant writing is unethical and problematic for several reasons. It fails to fairly compensate grant writers for their work, can lead to inflated grant requests, and undermines trust in the philanthropic community. Ethical compensation practices should ensure that grant writers are paid for their time, expertise, and effort, regardless of the outcome of the grant application. By adhering to the ethical standards set by professional associations like the GPA and AFP, organizations can foster a culture of transparency, accountability, and fairness in grant writing and fundraising.

Conclusion

Ethical considerations in grant writing are crucial for maintaining the integrity of the funding process. By ensuring honesty in data presentation, respecting funder guidelines, managing conflicts of interest, and committing to transparency and accountability, organizations can build strong, trust-based relationships with funders. The ethical approach to grant writing not only secures necessary funding but also contributes to the long-term success and reputation of the organization.

References

Association of Fundraising Professionals. (n.d.). Ethical standard deep dive: Standard 21. Retrieved from https://afpglobal.org/ethical-standard-deep-dive-standard-21

Association of Fundraising Professionals. (n.d.). Code of ethics. Retrieved from https://grantprofessionals.org/page/ethics

Carreau, M. (2009) Prof accused of spending NASA grants on cars, condos. Houston Chronicle. Retrieved from https://www.chron.com/news/houston-texas/article/Prof-accused-of-spending-NASA-grants-on-cars-1722521.php

Childress, R. (2024). Would your nonprofit return a gift from a ‘power drunk’ donor? This group did. The Chronicle of Philanthropy. Retrieved from https://www.philanthropy.com/article/would-your-nonprofit-return-a-gift-from-a-power-drunk-donor-this-group-did

Faris, A., & Paley, R. (2017). Unqualified. Dutton.

Grant Professionals Association. (n.d.). Ethics. Retrieved from http://www.agwa.us/ethics

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Minnesota Department of Natural Resources. (n.d.). Conflict of interest. Retrieved from https://files.dnr.state.mn.us/assistance/grants/passthrough/attachment-c-conflict-of-interest.pdf

O’Bannon, I.M. (2023). Younger workers say transparency is key to business ethics. CPA Practice Advisor. Retrieved from https://www.cpapracticeadvisor.com/2023/06/14/younger-workers-say-transparency-is-key-to-business-ethics/81003

Professional Grant Writer. (n.d.). Questions to ask if your grant request was denied. Retrieved from https://www.professionalgrantwriter.org/questions-grant-request-denied

Rosen, M. J. (2005). Doing well by doing right: A fundraiser's guide to ethical decision-making. International Journal of Nonprofit and Voluntary Sector Marketing, 10(3), 175-181. https://doi.org/10.1002/nvsm.11

Schultz, M. (2020). Transparency and the power gap. Peak Grantmaking. Retrieved from https://www.peakgrantmaking.org/insights/transparency-and-the-power-gap/

United States Department of Justice. (2024). Omaha nonprofit director sentenced to 4 months in prison for wire fraud. Retrieved from https://www.justice.gov/usao-ne/pr/omaha-nonprofit-director-sentenced-4-months-prison-wire-fraud

United States Attorney’s Office, District of Maryland. (2014). Morgan State University professor convicted in scheme to defraud the National Science Foundation and for obtaining kickbacks from students’ stipends. Retrieved from https://www.justice.gov/usao-md/pr/morgan-state-university-professor-convicted-scheme-defraud-national-science-foundation

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