Matching funds and cost share: what they are, when they're required

Roughly 1 in 3 federal grants requires matching funds — a non-federal contribution that you put up alongside the grant money. This post explains what counts, how to source it, and what to avoid.

Types of match

Cash match. Actual dollars from your org, a partner, or a donor. Cleanest to track.

In-kind match. Non-cash contributions valued in dollars. Volunteer hours, donated space, donated equipment.

Third-party match. A partner organization's contributions. Must be documented with a letter of commitment.

What counts

• Volunteer hours at the Bureau of Labor Statistics rate for that occupation
• Donated office space at fair-market rent
• Salaries your org pays for staff whose time goes to the project
• Equipment your org already owns (pro-rated by usage)

What doesn't count

• Federal funds from another grant (with very rare exceptions)
• Funds you already committed to an existing obligation
• Future revenue that isn't yet pledged in writing

Common match percentages

• 10% (common for smaller federal grants)
• 25% (USDA, some Dept of Ed)
• 50% (Many state grants, some federal grants)
• 100% (Rare — you put up a dollar for every grant dollar)

Where to find match

1. Your own unrestricted revenue. If you have any, this is cleanest.
2. Local foundations. Many will fund "match for a federal grant" as a standalone small grant.
3. Corporate sponsors. Banks and utilities often fund community match.
4. State programs. Some states run "bridge match" programs specifically to help nonprofits close federal matches.

The sustainability trap

A match commitment you can't sustain will tank the project in year 2 or 3. If you're matching on volunteer hours, make sure you actually have the volunteer pipeline. If you're matching on donated space, make sure the landlord will sign a 3-year letter.