In my work, I have occasionally addressed the question of what the ROI of hiring a grant writer is. I always turn the question around and ask what the cost of not hiring a grant writer would be for an organization. Money spent hiring a grant writer is not money taken away from the bottom line when you consider the return that grant writers provide in the way of grant funding. Hiring a grant writer may in fact result in significant savings over doing the work in-house.
Let me define my terms. According to “Investopedia,” ROI is “a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.” Thus, ROI looks like this:
Cost of Investment
In this case, many would assume that the Cost of Investment would equal whatever a fund seeker has agreed to pay the grant writer. But more can and should be taken into account. For instance, the Cost of Investment does not include compensation for one or more employees to do the work of the grant writer, assuming they had the skills and inclination to do so. It also does not address the time spent away from these individuals’ normal duties. Needless to say, this would entail extra costs. Also, what about the costs in both time and salaries associated with cultivating funding sources through phone calls, letters of inquiry and even, potentially, face-to-face meetings? Each of these labor-intensive activities can be assigned a dollar figure.
In addition, the Cost of Investment likely does not reflect the fact that the client does not have to pay the grant writer any benefits, unemployment, sick leave or other time off, social security or any other taxes, etc., and that they have no liability to them beyond the terms of the agreement. It also does not take into account the money spent by grant writers on one or more search engine subscriptions used to make appropriate matches.
Redefining a Grant Writer's ROI
I would propose to set up the ROI ratio somewhat differently, or at least to reformulate the Cost of Investment not only to include the cost of paying a grant writer but also to deduct the savings resulting from not having to pay for each of the other criteria mentioned above. In other words:
These are likely not the only line items that could be deducted from the original Cost of Investment. But they shouldn’t be discounted, either. Obviously, if each of these criteria were considered, then the Return on Investment of hiring a grant writer should look very attractive.
About the Author
David Lipten, Ph.D., has written winning federal grant proposals on behalf of a number of electric utilities, garnering nearly $40 million in U.S. Department of Energy grants, among other successes. He is based in Tallahassee, FL. Dr. Lipten is the owner/consultant at GrantWorks and can be reached at email@example.com.