Securing Matching Funds for Grant Applications

What Are Matching Funds?

Matching funds — also called cost share — are contributions that your organization or its partners commit to a grant-funded project beyond what the funder provides. Many grants require matching funds as a condition of the award, while others award bonus points to applicants who demonstrate additional investment.

The purpose of matching requirements is twofold: they leverage the funder's investment by ensuring that other resources are directed toward the project, and they signal that the applicant has genuine commitment and institutional support for the proposed work.

Match requirements vary widely. Some programs require a one-to-one match (you contribute one dollar for every federal dollar), while others require a smaller ratio such as 25 percent of total project costs. Some programs distinguish between mandatory cost share (required to be eligible) and voluntary cost share (offered by the applicant to strengthen the proposal).

Types of Match

Cash Match

Cash match consists of actual monetary contributions from non-federal sources — your organization's operating funds, state or local government appropriations, private donations, or other grant funds (if allowed by both funders). Cash match is the most straightforward type because it involves real dollars that can be tracked through standard accounting.

In-Kind Match

In-kind match consists of non-monetary contributions that have a quantifiable value. Common forms include donated professional services at their fair market rate, volunteer time valued at an appropriate hourly rate, donated equipment or supplies, use of facilities at their fair rental value, and contributed staff time from your organization or partners.

In-kind contributions require careful documentation because the value must be reasonable, allocable to the project, and verifiable. You cannot inflate the value of in-kind contributions, and you must use consistent valuation methods.

Third-Party Match

Third-party match comes from entities other than the grantee — partner organizations, subcontractors, community groups, or businesses that contribute resources to the project. Third-party match is valuable because it demonstrates broad support for the project, but it requires formal documentation from the contributing entity.

Identifying Sources of Match

Institutional Resources

Your own organization is often the largest source of matching funds. Institutional contributions might include staff time allocated to the project beyond what is charged to the grant, use of facilities, administrative support, or unrestricted funds dedicated to project activities.

State and Local Government

State and local government agencies may provide matching funds through appropriations, in-kind services, or dedicated program funds. If your project aligns with state or local priorities, approach relevant agencies about cost-sharing arrangements. Government-to-government match is often valued highly by federal funders.

Partner Organizations

Collaborating organizations that benefit from or contribute to the project may be willing to commit matching resources. Universities might contribute faculty time, hospitals might provide clinical space, and community organizations might contribute staff effort. Formalize these commitments through memoranda of understanding (MOUs) or partnership agreements.

Private Sector

Businesses may contribute matching funds through sponsorships, equipment donations, or discounted services. If your project addresses workforce needs in a specific industry, employers may be willing to invest in the project as a matching partner.

Other Grants

Some funders allow you to use other grant funds as match, but this is subject to strict rules. Federal funds generally cannot be used to match other federal funds unless a specific statute authorizes it. Always verify with both funders before counting one grant as match for another.

Documenting Match in Your Proposal

Budget Presentation

Present your matching contributions in the budget alongside the requested funds. Most federal applications include a dedicated column or section for cost share. Show the source of each matching contribution, its value, and whether it is cash or in-kind.

Commitment Letters

For each source of match, include a signed commitment letter that specifies the nature of the contribution, its value, the time period, and any conditions. Commitment letters should be on the contributing organization's letterhead and signed by someone with authority to make the commitment.

Vague or unsigned commitment letters significantly weaken your application. A letter that says "we intend to explore a partnership" is not a commitment. A letter that says "we commit to providing 500 square feet of office space valued at $15 per square foot per month for the 36-month project period" is.

Valuation Methods

Explain how you calculated the value of each in-kind contribution. Common methods include using published rates for professional services, applying the organization's established salary rates for contributed staff time, using independent appraisals for donated equipment, and citing fair market rental values for donated space.

Valuations must be reasonable and consistent with what you would pay for the same resource on the open market. Overvalued in-kind contributions are a compliance risk and can jeopardize your award.

Compliance Considerations

The Uniform Guidance

Federal grant cost sharing is governed by 2 CFR 200 (the Uniform Guidance), which establishes rules for what counts as acceptable cost share. Key requirements include that matching contributions must be verifiable, not included as a contribution for any other federal award, necessary and reasonable for the project, allowable under the applicable cost principles, and not paid by the federal government under another award.

Tracking and Reporting

Once the grant is awarded, you must track matching contributions with the same rigor you apply to grant expenditures. This means maintaining time records for contributed staff time, documentation for in-kind services, and accounting records for cash match. Failure to meet your match commitment can result in reduced grant funding or audit findings.

Voluntary vs. Mandatory Cost Share

Be cautious about offering voluntary cost share. Under the Uniform Guidance, once you include cost share in your proposal, it becomes a binding commitment if the award is made. If you promise a 30 percent match to make your proposal more competitive, you must deliver that 30 percent throughout the project. Only commit what you can reliably provide.

Common Pitfalls

• Committing to match that you cannot realistically deliver over the full project period
• Failing to get signed commitment letters from third-party match sources
• Overvaluing in-kind contributions, which creates compliance risk
• Using federal funds as match for another federal grant without statutory authorization
• Not budgeting staff time for tracking and reporting cost share

Securing matching funds requires planning, relationship-building, and careful documentation. Start identifying match sources early in the proposal development process, formalize commitments with signed agreements, and budget for the administrative effort required to track and report contributions throughout the project.