You’ve almost certainly encountered them, but if you’re new to grant seeking, matching grants can be a bit anxiety-inducing. Between determining cost share, finding cash or in-kind contributions to cover it, and developing a bigger-picture strategy, these grants bring some baggage. 

But are they anything to be scared of or avoid? No!

Matching grants are extremely common, especially for federal and other government funding opportunities. Understanding how they work and the extra considerations they bring will be worth the effort whether you’re looking to fund your nonprofit’s projects or develop a grant freelancing career.

Let’s take a look at these grants, how they work, why they’re worth understanding, and a few pro tips for approaching them with confidence.

What are Matching Grants?

Matching grants or match funding grants are funding opportunities, usually offered by government agencies, that require grantees to cover a set portion of the funded project’s total costs. This portion covered by your nonprofit (potentially with help from donors and other funders) is referred to as the match or cost share.

You’ll find matching grants posted all over the typical grant posting boards and databases, particularly and state-level databases.

Note: You may have seen the term matching gifts before—be aware that these are a different form of fundraising (employer-sponsored matches of individual gifts) than structured grants from a funding organization.

Why Do Funders Use Matching Structures?

Funders create matching grants primarily to share costs across jurisdictions or with the private sector, which can be a big concern for government offices under budgetary pressures. Essentially, the goal is to maximize impact while reducing costs.

Matching grants can also help promote the sustainability of funded projects, ensuring that organizations are equipped to keep running their new programs over time once the funding ends. Many multiyear grants include step-down structures for this purpose, requiring the nonprofit to cover a greater proportion of the cost each year until the project is self-sustaining.

How Do Matching Grants Work?

The core concept of cost share for matching grants is straightforward:

Let’s say your new program has a total cost of $20k to launch and run for the first three years.

If you find a grant that offers a 50% match, you’ll need to apply for $10k in funding. Once you win the grant (congrats!), you’ll need to cover your cost share of $10k. 

If the grant is intended to payout over those three years and includes step-down requirements, the cost share may be structured so that you cover increasing portions each year to receive the next installment.

Matching grants may require you to cover the cost share in certain ways: with cash, in-kind contributions, or a mix.

  • Cash cost share matching grants. In these cases, your organization, donors, or other funders pay cost share with liquid contributions (i.e. cash) to cover necessary expenses during the project.
  • In-kind cost share matching grants. These grants count in-kind contributions to the project as part of the cost share, usually in the form of volunteer hours, donated equipment, supplies, and services. You’ll need to estimate the fair market value of these contributions using defensible valuation methods.

Additionally, there are a few important points about cost share to keep in mind. 

Cost share usually cannot include federal funding sources (money from other federal grants), although there are some exceptions for tribal organizations. Cost share requirements can also vary greatly between grants. It’s highly recommended to print out the guidelines and read, reread, and highlight them to deeply understand the grant’s structure and what’s expected of you in terms of both cost share and reporting.

Reporting for Matching Grants

Reporting is especially critical for matching grants since funders need to know that grantees are adhering to the cost share requirements. 

Federal matching grants often trigger financial audits even when tracked very carefully, so be prepared and organized from the very start of the process. Keep track of all expenses during the planning, launch, and implementation of your funded project in a double-entry bookkeeping process—expenses on one side and how much grant match it represents on the other. Each expense needs its pair!

The bottom line: As with any grant, follow reporting requirements to a T. Your organization will be under increased scrutiny while receiving and using a federal matching grant, so be prepared. Treat this grant management process with the same priority and organization as your other compliance needs.

Why Should You Master Matching Grants?

Matching grants warrant your time and attention for a few reasons:

  1. They’re common. Getting comfortable with matching grants unlocks broader sources of funding for your nonprofit or grant writing clients.
  2. They necessitate more intentional Funding Strategies to use effectively (more on these below). While this does require more work, developing a bigger-picture grant strategy will sharpen your skills and make for much more compelling proposals. Demonstrate preparedness, urgency, and thoughtfulness, and you’ve got a major leg up!
  3. They allow you to show off the community support behind your nonprofit and its projects. When you seek outside support for your cost share, use the opportunity to strengthen your relationships with other funders, donors, and local businesses.
  4. They can give you serious reputation boosts. Matching grants aren’t insanely difficult, but they are more challenging than other types of grants. By winning and effectively executing them, you show that your organization is organized, dependable, and well-connected.

Extra Tips for Succeeding with Match Grants

How can you set yourself and your organization up for success when pursuing matching grants? Here are a few top recommendations:

1. Create a Funding Strategy.

A Funding Strategy is a collection of 2-5 grant opportunities that you identify and pursue as part of a coherent funding push. For matching grants, this means finding additional funding options that can help you cover part of (or maybe all!) of your cost share ahead of time and charting out a plan to pursue them.

Putting in this work upfront creates a good impression on funders, boosting your chances of success, and will drastically simplify things down the line.

Just be sure to look closely at the requirements of the match grant, as they might stipulate what other kinds of grants you can and can’t use to cover cost share. The additional grants in your Strategy might help cover other program or operating costs if they can’t be applied directly to the cost share of the matching grant.

To actually pay your cost share, you have a few options. Your nonprofit’s general operating unrestricted funds are set aside for these kinds of purposes, and many organizations also create specially allocated funds for match grants. 

But remember that commitments from major donors and corporate sponsors can be part of your Funding Strategy, too! These commitments might even be more appealing than other types of appeals because they’re very specific, time-bound, have clearly defined outcomes, and allow supporters to drive a lot of impact (enabling the project, securing funding for your organization, and providing funding of their own to see it to fruition).

2. Understand the potential sources for your cost share.

The expenses or in-kind contributions that might count towards your cost share of a matching grant can be quite diverse. For cash cost share, you likely (but not always) will be able to include line items like:

  • Personnel costs, wages, and salaries related to the project
  • Employee benefits paid for during the project
  • Associated travel expenses
  • Equipment purchases and rentals

Your organization would pay many of these expenses (like salaries) regardless of whether or not you receive the grant, so understanding where and how you can use the requirements to absorb expenses is extremely helpful. 

And for in-kind cost share, remember that you can (typically) include:

  • All donated services for the project, including training
  • All donated materials
  • Other indirect and miscellaneous costs associated with doing business, but be mindful of more specific requirements

For a closer look, Learn Grant Writing’s guide to matching grants reviews these costs and contributions in greater detail. 

3. Get some grant writing training.

Finally, don’t be afraid to hit the books and get more real-world guidance if you’re still anxious about jumping into matching grants. An extra professional credential never hurts, either!

Online grant writing resources and classes can help immensely to give solo grant writers and nonprofit professionals alike the background, examples, and templates they need to confidently approach these projects. Look for resources that provide training on:

  • Federal grant seeking
  • Matching grant structures more specifically
  • Reporting and grant management
  • Budgeting for grant writing
  • Project management for grant writing

The logistical elements of reporting, budgeting, and project management are always important for grant seeking, but especially so for matching grants due to their more complex nature. 

Take stock of your current strengths and gaps in your knowledge, and start exploring your options—if you’ve got a matching grant lined up already, the expense of brushing up on your grant management expertise might even fit into your cost share!

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