Peg:

I have made ends meet writing grants. I always sent the hourly rate vs a
percentage. For one, this is in accordance with being a member of NSFRE
(national society of fund raising executives) and it is a better way to
go. As the author, you have no control (in general) over how the grant
is presented to the funder, and prior relationship, etc.

Rates should be appropriate to your market. Grant writers as a job earn
in the high 20's in general.  I suggest that you go to a two -tier
pricing. There is a difference in skill for research, vs. designing the
grant vs. just writing up a grant that has been fairly well thought , vs
editing.  I charged a larger fee for on-site consultation. And in your
contract, state that the estimate of hours is in fact an estimate. Time
can add up if there are several people that have to review it.

good luck
Maureen Daly