3.3 Matching or Cost Sharing Requirements
Types of Match
Match is typically stated as a percentage of the total project costs for an award. For example, a 20 percent match on a $100,000 project would be $20,000, where $80,000 is provided by the Federal Government and $20,000 is provided by the recipient. There are two kinds of match:
- Cash match (hard) includes cash spent for project-related costs. An allowable cash match must include costs which are allowable with Federal funds, except acquisition of land, when applicable.
- In-kind match (soft) includes, but is not limited to, the valuation of non-cash contributions. “In-kind” may be in the form of services, supplies, real property, and equipment.
For example, if in-kind match is permitted by law (other than cash payments), then you can use the value of donated services to comply with the match requirement. Also, third party in-kind contributions may count toward satisfying match requirements, provided the recipient of the contributions expends them as allowable costs.
Documentation supporting the market value of in-kind match must be maintained in the award recipient files. Valuation of in-kind match may take one of the following forms:
- Valuation of donated services.
- Volunteer services. Unpaid services provided to a grantee or subgrantee by individuals will be valued at rates consistent with those ordinarily paid for similar work in the grantee's or subgrantee's organization. If the grantee or subgrantee does not have employees performing similar work, the rates will be consistent with those ordinarily paid by other employers for similar work in the same labor market. In either case, a reasonable amount for fringe benefits may be included in the valuation.
- Employees of other organizations. When an employer other than a grantee, subgrantee, or cost-type contractor furnishes free of charge the services of an employee in the employee's normal line of work, the services will be valued at the employee's regular rate of pay exclusive of the employee's fringe benefits and overhead costs. If the services are in a different line of work, please review the Code of Federal Regulations link referenced below.
- Valuation of third party donated supplies and loaned equipment or space.
- If a third party donates supplies, the contribution will be valued at the market value of the supplies at the time of donation.
- If a third party donates the use of equipment or space in a building but retains title, the contribution will be valued at the fair rental rate of the equipment or space.
- Valuation of third party donated equipment, buildings, and land.
- If a third party donates equipment, buildings, or land, and title passes to a grantee or subgrantee, the treatment of the donated property will depend upon the purpose of the grant or subgrant, as follows:
- Awards for capital expenditures. If the purpose of the grant or subgrant is to assist the grantee or subgrantee in the acquisition of property, the market value of that property at the time of donation may be counted as cost sharing or matching.
- Other awards (1). If assisting in the acquisition of property is not the purpose of the grant or subgrant, and approval is obtained from the awarding agency, the market value at the time of the donated equipment or building or the fair rental rate of the donation may be counted as cost sharing or matching. In the case of a subgrant, the terms of the grant agreement may require that the approval be obtained from the Federal agency as well as the grantee. In all cases, the approval may be given only if a purchase of the equipment or rental of the land would be approved as an allowable direct cost. If any part of the donated property was acquired with Federal funds, only the non-federal share of the property may be counted as cost-sharing or matching.
- Other awards (2). If assisting in the acquisition of property is not the purpose of the grant or subgrant, and approval is not obtained from the awarding agency, no amount may be counted as donation, and only depreciation or use allowances may be counted as an allowable expense. The depreciation or use allowances for this property are not treated as third party in-kind contributions. Instead, they are treated as costs incurred by the grantee or subgrantee. They are computed and allocated (usually as indirect costs) in accordance with the cost principles specified in Title 28 CFR Part 66.22, in the same way as depreciation or use allowances for purchased equipment and buildings. The amount of depreciation or use allowances for donated equipment and buildings is based on the property's market value at the time it was donated.
Please refer to Title 28 Code of Federal Regulations (CFR) §66.24 [PDF – 144 Kb] for more information about types of match and match requirements.
Figure 8-1 explains how match calculation works.
|Step 1||Award Amount||÷||% of Federal Share||=||Total (Adjusted)
|Step 2||Total (Adjusted)
|x||% of Recipient’s Share||=||Required Match|
|Match Requirement = 80/20 (Federal/Recipient)|
Federal Award = $100,000
|Step 1||$100,000||÷||80% Federal Share||=||$125,000|
|Step 2||$125,000||x||20% Recipient’s Share||=||$25,000|
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