Federal grants often require grant recipients to match a percentage of the federal award with other sources of cash or in-kind (non-cash) resources. Previously, a majority of Kentucky nonprofits surveyed by Grant Ready Kentucky find match requirements to be a significant barrier to applying for public funds. With the implementation of the GRANT program, described below, match requirements are much more attainable. Below, the basics of federal grant match requirements and how to meet them are outlined below.
What is Match?
"Match", or "Cost-Sharing", means the portion of project costs not paid by the federal grant or other federal funds. Matches may consist of cash or in-kind donations of time, services, or goods.
Tip: In the United States, a specific set of federal regulations known as the “Uniform Guidance” outline the requirements that must be followed by entities receiving federal funding. These regulations are available publicly at 2 CFR 200, and specific rules relative to cost sharing or match can be found at 2 CFR 200.306. When in doubt, always refer to these regulations as the final authority or ask the funding agency for clarification as needed.
How Much Match Is Needed?
The percentage of match (cost-sharing) required means the percent of the total project cost.
Match requirements vary, from 0% in some cases, up to 50%, which means matching the federal grant dollar for dollar. This may be expressed as a 1:1 match. While most federal grants require between 20% and 50% match, it's important to read each Notice of Funding Opportunity (NOFO) carefully for specific calculation details.
For example, let's assume the total project cost is $100,000 and the federal grant requires a 30% cost share or "match". This means, of the $100,000, the federal grant will cover $70,000 (70%) of the total project cost. The organization's contribution to the total project cost is $30,000 (30%). Conversely, match is not the percentage of the government grant amount. In this example, the federal grant is $70,000. If the organization provides 30% of the federal grant amount ($21,000), the match will be insufficient and the application will be short of the total funds needed to complete the project.
Let's Review Real Examples From Recent Funding Opportunities
Match Required: Two Examples
EDA sets the federal share region by region using its own distress criteria, so the match rate for this program isn't fixed the way some others are. Two applicants with identical projects could face different match requirements simply because of where their project is located. Review GRKY’s resource on this funding opportunity for more information on how EDA determines the rate for a given area.
Appalachian Regional Commission's POWER Initiative
For some grant opportunities, such as the POWER grant from the Appalachian Regional Commission (ARC), the required match varies based on the economic status of each county served by the project, ranging from 20% to 70% of the total project budget. See ARC's match requirements for the current match rate by county designation. Review GRKY’s resource on this funding opportunity.
Tip: To quickly search a notice of funding opportunity, try pressing Control + F on the PC keyboard or Command + F on the Mac keyboard. In the pop up search box, try inputting terms such as “match” or “cost share” to quickly locate this information.
What Counts as Match?
Once the organization knows what percentage and dollar amount is required, it's time to develop a match plan. When an organization applies for federal grants, the grant application will include match as a budget line item, with space to describe the match the organization will provide.
Tip: Develop the match plan early in the grant application process and allow plenty of time to collect any needed commitments in writing. To prove match funds, it may be necessary to ask partners for a match letter or a memorandum of understanding (MOU).
There are generally two ways to meet match requirements: cash and in-kind resources.
Cash
Cash is the most common and easiest form of match to document. This is an actual cash contribution to the total project cost. Common sources of cash are:
- Grantee's own general funds or designated project/program funds
- Non-federal funds from a third party, such as a matching grant from a foundation or partner organization
- Proceeds from a fundraiser to benefit the project
TIP: The Kentucky GRANT Program, administered by the Kentucky Cabinet for Economic Development, provides matching funds statewide to help cities, counties, and 501(c)(3) nonprofits meet the local match component of eligible federal grant applications. For the latest program details, including match tiers, eligibility, and application timing, see GRKY’s resource Watch: Kentucky GRANT Match Program Updates.
In-Kind Resources
In-kind Resources are goods, services, property, or space provided instead of money. In-kind matches can be more burdensome to track and report. However, the organization may find that in-kind donations are necessary to meet match requirements. Examples include:
Services
- Training for project staff
- Professional/Expert Services for the project
- Staff Time dedicated to the project
- Volunteer time dedicated to the project
Goods
- Equipment
- Equipment rental donation
- Materials donated for the project
- Supplies or other expendables
Property / Space
- Real property such as land or a building
- The value of the lease or rent for the project location
Keep in Mind, in-kind donations of services, goods, and property or space are only match-eligible if they cover the cost of eligible project expenses. Is there a line item for it in the budget template? If so, then it is most likely eligible.
When in doubt, ask the funder!
Will the Federal Funder Accept My Match Plan?
Remember the Uniform Guidance? For federal awards, matching and cost-share such as cash and third party in-kind contributions must meet specific criteria stipulated in 2 CFR 200.306.
Before submitting a match plan, double check that all contributions are:
- Included in the approved budget when required by the federal awarding agency
- Necessary and reasonable to accomplish the project or program objectives. Make sure all cash and in-kind resources are necessary and directly tied to the funded project or program outcomes.
- Verifiable in the organization’s records. Document all match components and prioritize good record keeping
- Not double-counted or included as contributions for any other federal award. Don’t try to use the same contribution against more than one federal grant
- Not from federal sources. With very few exceptions, matching funds cannot be sourced from another federal award. When in doubt, check with the funding agency directly.
- Are allowable costs under the “Cost Principles” of 2 CFR 200 Subpart E and conform to other provisions of 2 CFR 200.306. Alcoholic beverages are an example of an unallowable cost
Again, when in doubt, ask the federal funding agency.
How are Match Commitments Documented?
Application
A federal grant application may require documentation of the match commitments to the project, which could include:
- Award or commitment letter from a foundation, corporation, or individual donor with the funding they will provide and designated use
- Letter of commitment from a donor of land, equipment, supplies, or space
- Letter from the organization describing staff working on, but not paid by, the federal grant-funded project
- Letter from a third-party organization providing professional services, training, or staff on loan specifically for the project
Post-Award
Post-award, the organization must keep records reflecting the value of all cash and in-kind donations, determined in accordance with the organization's usual accounting policies.
Provide and keep records of receipts for cash and in-kind donations as they are made, including value and designated use.
Valuing In-kind Donations
Generally, the donations of property, space, services, equipment, materials, and goods must be determined by fair market value and in accordance with the organization's internal procedures. For federal guidance on valuing in-kind match, review 2 CFR 200.306 here.
Property and Space
- The federal government has specific regulations regarding valuing donated property such as land or buildings. Consult the federal regulations before assigning a value.
- The value of donated space must not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.
Services, Staff, and Volunteer Time
- When a third-party organization provides an employee to work on the project, services must be valued at the employee's regular rate of pay plus a percentage of fringe benefits allocated to the person's donated time.
- Rates for a staff person dedicating time to the project must be at the employee's current pay rate plus allowable benefits.
- Rates for volunteer services must be consistent with those paid for similar work within the organization. If the required skills are not available, the rates must be consistent with rates paid in the local labor market. Fringe benefits that are allowable may be included in the valuation of services. Consider this article for 2026 when determining the value of volunteer time.
Equipment, Materials, and Supplies
- The value of donated equipment must not exceed the fair market value of equipment of the same age and condition at the time of donation.
- The value of loaned equipment must not exceed its fair rental value.
- The value of donated equipment, materials, and supplies must not exceed the fair market value at the time of the donation.
Frequently Asked Questions
Q: Will this grant help cover rent?
A: It's possible. The portion of the organization's space used for the project could be covered by the grant, or this portion of rent can be an in-kind donation to directly support the grant-funded project.
Q: Can other federal grants be used as a match?
A: In most cases, no. There are very few exceptions. Plan to use non-federal sources, and when in doubt, ask the funder.
Q: Can the time of volunteers that support the organization be used as a match?
A: Are the volunteers assigned directly to the project? Do they contribute directly to the work of this program? If yes, then their time can be used as an in-kind match. Remember that match amounts must be verifiable, so detailed records of volunteer hours will need to be maintained.
Disclaimer: All information provided in this article is general information for charitable purposes only. When in doubt, consult the Uniform Guidance (2 CFR 200) or direct specific questions to the federal funding agency administering the grant program. Grant Ready Kentucky does not provide legal, accounting, or tax advice, and nothing in this article is a substitute for obtaining legal, accounting, or tax advice from a qualified professional. Federal regulations are subject to change. Review GRKY terms and policies for more information.