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Building Leverage Through Matching Funds

Mar 19

Written by: Grants Office, LLC
Monday, March 19, 2012  RssIcon

By Susannah Mayhall
March 2012
 
Cost-sharing can be tricky waters for applicants to maneuver.  Cost-share or match components vary greatly between different funding programs. While some grants require a certain percentage of the total project cost in the form of a local cash match, others may allow in-kind matching, and still others may not require a match at all.  In these lean financial times, you may lurch at the idea of coming up with funds to match the grant; after all, you are seeking grant funding because you can't fund the project on your own, right?  However, there are several important aspects to consider with regard to matching, and you might want to hold off on tossing that grant aside before fully considering these pointers.
 
Why do funders require matches in the first place?  The answer is two-fold.  First, by requiring grantees to commit additional funds to the project, grant funds will be stretched as far as possible.  Remember, federal and state budgets are being slashed as well as local budgets, and by combining forces with local funds, that $300,000 federal grant could accomplish twice as much when coupled with a 50% local match.  A second reason matches are required is that, from the viewpoint of the funder, if a local entity puts some of its own into the project, that local project will be much more likely to successfully reach completion.  While many people have no limit to the number of pipe dreams they say they would accomplish with someone else's money, when your own money is on the line, the pressure is on to use funds wisely and demonstrate to your community that their money has gone to good use.  Using this rationale, federal funders may require a match as a sort of project insurance to ensure that the project won't be completed half-heartedly or abandoned altogether.
 
Taking this rationale into consideration, you can use a cash match offering to your advantage.  If the grant program and your budget allows, it's usually in your best interest to offer a higher match than the minimum required.  When faced with two equally meritorious projects, a funder may very well choose the applicant who proposes a 30% match over one with a 15% match.  Committing extra financial support to your project could be the leverage you need to tip the scales in your favor.  As federal grant programs become increasingly competitive, a few extra points garnished from a higher match, or a favorable review based on your commitment to your own project might make the difference between "funded" and "denied."
 
From a local perspective, collecting a cash match could also help provide you with stronger local support for your project.  Local officials and community members will be much more engaged in and concerned for the success of a project if their own budgets are on the line.  By involving a piece of your local budget in your project, you might also be acquiring a support network for yourself as you implement the project and work towards its successful completion.
 
If coming up with a cash match is not desirable or simply not possible, many applicants might try to present an in-kind match of personnel time, resources, or other commitments in place of matching funds, where allowed by the grant program.  However, while contributing an in-kind match might seem more doable than coming up with cash, be sure to carefully consider in-kind match claims.  Because personnel or equipment committed to the grant project are frequently utilized for other purposes, you will have to provide a solid demonstration to the funder that an appropriate percentage of your proposed in-kind match will be dedicated to the grant project.  The in-kind match must be directly tied to the project's success.  Should you fail to adequately demonstrate that connection, your match might be cut down to a percentage the funder considers more accurate or rejected altogether.  You don't want to jeopardize your chance at receiving funding by presenting a vague description of the in-kind match's tie to the project or how it will be utilized. 
 
The above being said, in-kind matches can effectively demonstrate local "skin in the game" and, whether presented as a required match or as a contribution to the project that's above and beyond the requirements, can be used to your advantage if properly accounted for. 
 
Despite the benefits to presenting a solid cash or in-kind match to a project, many applicants may simply be unable to spare any amount of their budget to support the project.  If you are in this boat, you might want to consider looking for alternate sources of matching funds outside of your organization's budget.  Possible sources could be local foundations, corporate sponsorships, or fundraising events.  As is the case with local official and taxpayer support for a project, building relationships with foundations or corporate sponsors can also serve to provide a support network for the project and could result in future funding for other projects and needs if the relationships is successfully sustained.  As always, be sure to thoroughly review the program guidance and become familiar with the specific requirements of the grant.
 
You can see how providing a local match might not be as bad as it initially seems.  From a funder's perspective, matching all comes down to putting your money where your mouth is.  By carefully considering your options, gathering matching funds could be the tipping point for not only pulling down grant funding for your project, but for bolstering your local support and seeing your project through to a successful completion.

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