How Many Foundations Require Matching Funds for Grants?

Taking a challenge.
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How many foundations require "matching funds" as a contingency for making a grant? What is the philosophy behind matching funds for grants?

When a reader posed this question, I turned to the Foundation Center for answers. It turns out that the Center does not track the number of foundations that require matching funds to receive a grant. But its online database shows more than 2,500 grantmakers that may provide (but do not require) matching/challenge support.

 

The Foundation Center explains the philosophy of matching funds in this way:

"Matching or challenge grants are often used by foundations to help a recipient organization to expand its existing donor base. A challenge campaign can be an opportunity to inspire existing donors to give more or to encourage new donors to make an initial contribution." 

Why Do Foundations Ask for Matching Funds? 

It could be one of several reasons, such as:

  • the foundation asks all grant seekers to produce matching funds.
  • the foundation believes in what your org is doing but wants to see if it has broad community support as well
  • the grantor may think you haven't budgeted enough for the proposed project and wants to see more money on the table
  • the foundation wants to help you expand your pool of donors

Where Do Charities Get the Matching Funds? 

There are several possibilities, such as:

  • A major donor who is already invested in your cause
  • By running a fundraising campaign specifically to raise the matching funds
  • Finding another foundation to provide the matching funds. That's why it's a good idea always to apply to several foundations to support your project. If one offers a grant with a matching funds contingency, you can approach the other foundations that you applied to and let them know you have one source with a contingency and are seeking another source to help with the match.
  • Combining all of these sources to come up with the total matching funds.

Should You Accept a Matching Contingency? 

Absolutely! It's not a negative that the foundation offers a contingency. It means that they think your project is worthy, and they are willing to help you leverage additional support.

Matching is not the only contingency that a foundation might come up with. Sometimes a contingent award is all about confirming certain partnerships or permissions, or the submission of your strategic plan. It could be conditional upon hiring a particular staff position or some other action related to the funded project.

Make sure you understand the contingency or conditions of the matching requirement and the deadlines for meeting them. If something is not clear, don't hesitate to contact the funder for clarification.

Want to explore matching funds further? Here are some sources:

What Are Matching Grants? I'll Explain... Seeking Grant Money Today. Written in 2008, this basic explanation is still accurate. 

Challenge Grants—Georgia Center for Nonprofits. Excellent explanation of a cousin of matching grant contingencies called challenge grants. 

Examples of foundations that provide matching/challenge grants:

Shumaker Family Foundation

Jewish Funders Network

Thanks to the Foundation Center for providing information about this topic.