Grant Budgets
Matching Funds for Grants: How Match Requirements Work
Grant Writing Service Editorial Team
June 12, 2026 · 5 min read
Table of contents
Key takeaways
- Matching funds are the share of project costs you must cover from sources other than the funder, in cash or in kind.
- A 25 percent match can mean 25 percent of the total project or 25 percent of the grant; the difference on a $300,000 award is $25,000.
- Under 2 CFR 200.306, match must be verifiable, allowable, necessary, not counted on another federal award and not paid with other federal funds.
- Whatever match you put in an approved budget becomes binding, including voluntary match you offered but did not have to.
Matching funds are the portion of a grant-funded project's costs that the applicant must cover from sources other than the funder, either in cash or through in-kind contributions such as donated services, space or equipment. Federal rules call this cost sharing, and use "matching" for a required level of cost share (2 CFR 200.1). A match requirement is a condition of the award: you budget it, deliver it during the project, document it like grant spending, and report it.
Read the ratio exactly: three ways to state a match
The most expensive misunderstanding about match is the arithmetic. The same percentage can describe very different amounts depending on what it is a percentage of. On an illustrative $300,000 federal request:
| How the requirement is worded | Calculation | Match needed | Total project |
|---|---|---|---|
| One-to-one (dollar for dollar) | $300,000 × 1 | $300,000 | $600,000 |
| 25 percent of total project cost | Grant is 75% of the total, so $300,000 ÷ 0.75 × 0.25 | $100,000 | $400,000 |
| 25 percent of the federal share | $300,000 × 0.25 | $75,000 | $375,000 |
The wording comes from the program statute or regulation and is restated in the notice of funding opportunity. Copy that exact phrase into your planning sheet, and if it is ambiguous, ask the program contact in writing before you build the budget.
What can count as match
| Type | Examples | Main condition |
|---|---|---|
| Cash from your organization | Unrestricted funds, board-designated reserves, earned revenue spent on the project | Spent on allowable project costs during the award period |
| Cash from third parties | A foundation or corporate grant that permits use as match, local government funds | Not federal money in origin, unless a statute allows it |
| Third-party in-kind | Volunteer and donated professional services, donated space, donated or loaned equipment and supplies, partner staff time | Valued under 2 CFR 200.306 and documented |
| Unrecovered indirect costs | The gap between the indirect cost the award pays and what your rate would allow | Only with prior approval of the agency or pass-through entity (200.306(c)) |
How to value and document each in-kind type, with a full worked table, is covered in in-kind contribution examples.
The federal tests every match source must pass
Section 200.306(b) says a federal agency must accept cost share, cash or in-kind, when it:
- is verifiable from your records
- is not counted as a contribution to any other federal award
- is necessary and reasonable for the project's objectives
- is allowable under the federal cost principles
- is not paid by the federal government under another award, unless the program's statute allows it
- is in the approved budget, when the agency requires that
- conforms to the other rules in 2 CFR 200
Tests 2 and 5 catch most problems. Federal money that reaches you through a state agency is still federal, so a state grant funded by a federal block grant usually cannot match another federal award. And a volunteer hour counted on one award cannot be counted again on a second.
Match must also fall within the period of performance, and it follows the same cost principles as grant spending, so an item the grant could not pay for cannot be counted as match either.
Mandatory, voluntary committed and voluntary uncommitted
Federal rules distinguish three situations, and the difference decides what you are bound to:
- Mandatory match is required by the program. Without it the application may be ineligible.
- Voluntary committed cost sharing is match you offer in the proposal budget when none is required, or above what is required. Once in the approved budget it becomes a binding requirement of the award (2 CFR 200.1). For federal research grants it is not expected, and agencies may not use it as a merit review factor unless a statute or regulation authorizes it and the notice says so (200.306(a)).
- Voluntary uncommitted cost sharing is extra effort or resources you contribute without having pledged them, such as a researcher working more hours than budgeted. It is not tracked as match.
The practical rule: do not offer match you are not required to provide unless the notice says it will be scored, and do not round up a required match generously. Every committed dollar has to be documented.
Putting match in the application
On federal applications the non-federal share goes in Section C (Non-Federal Resources) of the SF-424A non-construction budget form, broken out by applicant, state and other sources, and in the non-federal column of Section A. The budget justification should then list each source, its amount and how it was valued. Third parties providing cash or in-kind match should confirm their commitment in writing; a commitment letter is stronger than a general letter of support because it names the contribution and its value.
Example 2 in our grant budget template and examples shows a two-year federal budget with its match table worked out.
After award: tracking and reporting match
Committed match is reported on the Federal Financial Report (SF-425): line 10i shows the total recipient share required, 10j the recipient share spent to date, and 10k what remains. The figures must reconcile to your records, so keep a match register from day one that lists each contribution, its value, its basis and where the evidence is. Our guide to federal grant reports covers the reporting cycle.
Check progress against the requirement at least quarterly. A shortfall discovered in the last quarter is hard to close. Failing to meet a required share is noncompliance with the award terms, and the remedies available to the agency under 2 CFR 200.339 include disallowing costs, withholding payments and withholding future funding. Match is also tested in the single audit when your federal spending reaches the audit threshold.
Matching grants in foundation funding
Foundations use "matching grant" or "challenge grant" in a different sense: the funder commits an amount but releases it only as you raise new money from other donors, often dollar for dollar by a deadline. The mechanics are simpler than federal cost sharing, but the same discipline applies. Know exactly what counts as new money, track it by donor and date, and report against the terms in the award letter.
For where match sits in the full budget-building process, see how to build a grant budget.
