Bookkeeper for Grant Writers

How do the different ways of charging for grants show up in your books?

Grant writers are paid in three patterns, and most of the owners we talk to use more than one of them: a monthly retainer, a flat fee for a full proposal, or hourly billing for extra work.

• Retainer. A set amount lands in your account each month while the client is active. One published pricing example describes foundation grant retainers running $1,500 to $3,000 a month, depending on how many proposals are in the queue. That is a clean, expected income line every month.
• Flat fee. You quote one number for the whole proposal. The most common split we found in the grant industry literature is roughly 45 percent when you start and the rest when the proposal is delivered. That means the work shows up in two different months of your income, and unless you book both pieces, your profit looks thin in the first month and unusually fat in the second.
• Hourly. This is the easiest model to record because you invoice for the hours actually worked, and the payment follows the invoice. It also gives you no ability to escape the trade-off of more work against more hours, which is why most owners try to move out of it.

Whatever structure your contract uses, the rule is the same. We record every fee against the client it belongs to, and we label it as retainer, flat fee, or hourly. When the work sits in one month and the payment lands in another, the books should be on an accrual basis or you are basically flying blind.

Can I charge a percentage of the grant when it comes through?

Charge it to yourself, and many reputable grant professionals will tell you flat out it is never a good idea. The grant is money for the for the client's future mission-related work, not money to reimburse the cost of raising it. The grant industry guidance is written out in public sources, and the regulated point is that grant money cannot be used to pay your fee for getting the grant.

We looked for a statute or a ruling that makes commission billing illegal in this trade, and the sources we found are not concrete. What they do say, repeatedly, is that charging a percentage is discouraged enough that it puts the client in a bad position if the funder looks at the books. Your own books should not have a revenue line called commission on a grant. Your fee comes from the client's operating account, and it shows up on your books as a fee, not as a slice of someone else's award.

Should my books use the same chart of accounts as my nonprofit clients?

It is surprising how often this comes up. When you search for a chart of accounts for grant writing, almost everything you find is the chart of the nonprofit client, not the chart of the grant writer. A nonprofit chart is built around the categories a funder cares about: assets, liabilities, net assets, revenue, and expenses by the funder's restriction. That is the right structure for your client's 990, and it is the wrong structure for your own business.

Your own chart is a simple service business chart: income, expenses, assets, liabilities, and equity. You do not track restricted funds. You do not track to the grant. You do not have a category called fundraising expenses, because that is the line your client uses to book what they pay you. The only thing your chart needs is clear income accounts per revenue type and expense accounts that reflect what it actually costs you to run the work.

What does a proposal actually cost me to produce?

The honest answer is: published numbers on running costs for a grant writing firm are hard to find, and the ones on hours to produce a proposal conflict from one source to the next. One trade source says a straightforward foundation grant runs 20 to 40 hours, while another says 15 to 20. For federal grants we have seen 60 hours in one, 100 plus in another, and 200 plus in a third. There is no shared number, and nobody publishes a reliable cost breakdown for the owner's own software, research, and overhead.

That gap is exactly why your own books have to carry the weight. Track hours per proposal to get the real cost. Record your own time at a conversation with your charging rate, and treat that very clearly as a cost of sale. Add the small cost buckets most owners have: databases, software, insurance, and anything outsourced. By the end of the year, you want to see the full cost of the proposals that produced revenue and the full cost of the ones that did not, because the ones that did not are a real input to the next price you quote.

Which report tells me whether a specific client is worth keeping?

The profit and loss statement across your whole business hides your best client and your worst one in the same number. The report you actually want is a profit and loss that breaks down by client, and the simplest way for a grant writer to get it is to set up each active client as a revenue sub-account that tracks its own expenses.

With that, you can see in one page how many hours you truly put into the foundation grant that only pays $2,400, and how many hours the long federal proposal took. Because the win rate in grant work is low in the sources we found, the math matters more here than in almost any other service trade. The trade average is around one proposal in ten. If you write ten proposals and one wins, the profitable one has to carry the hours you spent on the other nine. If your bookkeeping has not written that fact down, then the pricing you did this year was just a guess.

What should my books help me decide about pricing and hiring?

Two decisions sit at the center of this business and both come straight from the books. The first is what to charge next. If the books show a foundation proposal costing you an honest 30 hours of work, and roughly one of every ten proposals comes through, then the monthly retainer on that foundation can be far below your real cost. That number is not emotional, it is arithmetic, and it belongs in the books before you tell a client your rate.

The second decision is when to stop doing everything alone. A single owner who works 30 to 50 hours a week toward a $45k to $60k income is a common story in the trade, and the books are the only thing that keep that owner honest. If the books show that each active retainer adds real profit, then hiring a junior writer starts to make sense. If the books show that all the profit dies when you are not personally the one typing, then a hire does not solve the business, and the pricing, not the team, is the problem.