As a new grant writer, over two decades ago, I was intrigued when I first heard of a matching grant. I didn’t know what they were, if I should apply for one, or what was required to qualify. Luckily for me, I did some exploring and learned a lot about matching grants, and discovered how amazing they are as a tool to help build the capacity of nonprofits.
Let’s look at the ins and outs of a classic matching grant.
Q. What is a matching grant?
A. A matching grant is a conditional award that requires an organization to raise a specified portion of the grant through solicitation of new money and/or in-kind contributions, depending on the stipulation in the grant guidelines.
Q. What is the purpose of a match requirement?
A. Matching grants are meant to challenge an organization to increase its revenue and/or contributions and to encourage a nonprofit to diversify/broaden its base of support.
Q. What is meant by ‘in-kind?’
A. In-kind contributions are defined as donated goods and services and can include provision of staff, space, equipment or labor. Contributions such as these may be considered in meeting the match requirement if they are quantifiable and reduce the actual amount required in the budget submitted to the Foundation and on which the Foundation based its match requirements. (be sure to read the guidelines for each foundation/donor carefully for their own instructions.)
Q. What is mean by ‘new money?’
A. New money is defined as fund received from sources that have not made a contribution to the organization in a specific number of recently completed fiscal years (as defined by each foundation) and/or funds contributed by a donor in excess of the donor’s contributions in the prior fiscal year.
Q. Can the match requirement be satisfied with pledged funding?
A. With many foundations, pledges are allowed to satisfy matching dollars. Pledges are usually considered firm and binding. Again, you would want to confirm this with each foundation specifically. Many times you will see “dollars must be confirmed,” but don’t have to be in-hand.
Q. What is the general time frame given to organizations to meet a match requirement?
A. This varies based on the foundation. My experience has been that is usually required before you are given that portion of the granted funds. Often grants are a partial match, not 100% of the funds requested. you will want to refer to the guidelines and speak with program staff at the foundation to clarify for each grant.
Q. What paperwork is required to prove an organization met its match stipulation?
A. Again, this will vary by foundation. Some examples may include: If a matching portion was met with a grant from another foundation, one could submit a letter simply stating the name of the philanthropic organization, the amount committed, the date the award was granted and the intention of the nonprofit to use the gift to fulfill the Foundation’s match stipulation. For individual contributions, most organizations track a list of new donors and the amount each gives. For donors who are counted for increased giving, the organization typically tracks two pieces of data: 1) the amount given last year and 2) the amount given this year (to demonstrate increase). There are many ways to track and report matching dollars. Check with each foundation to learn their preferences. Many may have forms for you to use.
Q. What happens if a full match requirement is not met?
A. Some foundations may award a partial grant payment and others may not disburse a grant at all if the requirements are not met in full. These are great things to know before beginning the process of a matching grant. Are you confident you can get the match in the required time frame?
Now that we have discussed a bit about what matching grants are, let’s chat for a minute about how to find matching dollars. This will vary based on the type of program and/or agency you have, as well as the type of funds you are requesting.
Let’s say we are working with an educational institution on a grant with a required match. This grant requires a 100% match, dollar-for-dollar. The overall proposal being submitted will likely be around $60K. We are challenged with where to find these matching dollars.
Luckily the organization has a nice little sum of cash to allocate to the match, which takes care of about $10-$15K. Nice! Where else can we look?
As we have brainstormed the actual contributions from the organization that help make this program possible, we have listed space, portions of staff salaries, equipment, and in-kind services from partner agencies.
Basically, what I try to explain to new grant writers, is you need to create your needs list first. Sit down and write every possible thing you will need to make this program happen. A lot of times people overlook the things like:
- Portions of overhead expenses (think about things like power, utilities, rent, etc.)
- Marketing materials and the tools to create them (like copiers, ink, toner, paper, etc.).
Once you have that needs list, compare it to the items you are requesting from the potential donor/agency. Anything you are not requesting in the proposal budget, are things you will either have to acquire, you will have donated (in-kind hopefully), or are things you already possess. These are the items that will become in-kind matches.
EXAMPLE | One of my favorite, and easiest to understand examples is this:
Funding For Good wrote a federal grant for an after-school program a few years ago. We were required to have a 20% match. This came out to $120,000/year.
That seemed like a lot at the time. Ultimately, it was not very much at all.
The school was providing a gymnasium, a football field, a lunchroom, and a media center every day after school for 2.5 hours. During the school year that was 5 days a week times 40 days = 200 days.
We took the rental value of each of those facilities (because that rental fee is documented with the school system, we did NOT make it up) and calculated what it would cost for space if we had to rent it for the program.
Check it out (*these numbers are guesstimates because I don’t remember the exact numbers):
- Gymnasium @ $100/hr x 2.5 hr/day x 200 days = $50,000
- Football Field @ $100/hr x 2.5 hr/day x 200 days = $50,000
- Lunchroom @ $100/hr x 2.5 hr/day x 200 days = $50,000
- Media Center @50/hr x 2.5 hr/day x 200 days = $25,000
Total for 1 Year of In-Kind Space = $175,000
Now, this was a year-round program, and we have not even calculated the space for the summer portion of this program. Just imagine what we COULD have matched!
We would take a similar approach to determine value of staff, media, technology, overhead, transportation and so on.
When you get to your first matching or challenge grant, or as you move through current grants that have matching requirements, don’t freak out. It is doable. It may take some creative thinking on your part, but it is doable.
Hope this helps as you continue to grow for good.