Sometimes someone thinks there idea is so great that others would pay to work on it, and they are actually doing you a favor by letting you work on it for free. Or maybe they don’t have the money yet but with your help they surely will get funded! Or better yet, they want you and a dozen others to work on the project and in the end they will pick the best work and only pay that person. Rings a bell? You may not know the word for it, but you surely have been asked to contribute to projects like that. It’s called speculative work, spec work, or working on specs and it’s seriously frowned upon by any professional worth their salt.
So much so that there is a website entirely dedicated to eradicating spec work: http://www.no-spec.com/
Creativebusiness.com also has a free article on why one shouldn’t do speculative work and the Graphic Artists Guild Handbook Pricing & Ethical Guidelines has a whole chapter about it. Basically, by working without any guarantee to be paid, not only you make yourself appear to be unprofessional and cheap, but you also increase your overhead, which means that in order to be able to do a decent amount of money, you will have to charge your paying customers more! So you are punishing good customers by helping bad customers. So I’m joining the no spec crew in urging you to turn down these spec work request, it’s bad for you and everyone in your business!