VA FAIRS has assisted numerous clients over the years with successful grant applications totaling over $3,000,000 in grant funding. In addition to our application assistance, we have also assisted our clients with the administration of awarded grants.

What are matching funds?

In the “General Requirements for Cooperative Services Grant Programs"; the code of Federal Register (7 CFR 4284 parts A) briefly defines matching Funds as “Cash or confirmed funding commitments from non-Federal sources unless otherwise provided by law.”

Wikipedia defines it more simply as “a term used to describe the requirement or condition that a generally minimal amount of money or services-in-kind originate from the beneficiaries of financial amounts, usually for a purpose of charitable or public good.”

Simply put, matching funds are cost sharing requirements from the Federal Government to the applicant.
Unless otherwise specified, matching funds must be at least equal to the grant amount. Unless otherwise prohibited, in-kind contributions that conform to the provisions of 7 CFR 3015.50 and 7 CFR 3019.23, as applicable, can be used as matching funds.

Matching funds are subject to the same use restrictions as other grant funds. Funds used for an ineligible purpose will not be considered matching funds.

As both definitions state, matching funds can be either cash or in-kind. The applicant as well as third party sources can both provide matching funds.

Cash Matching Funds – As the name implies, are actual cash contributions drawn from the grantees or third parties accounts. Promises of matching funds must be supported with bank statements or letters from bankers.
Matching funds from the applicant that are salaries, plant wages, utilities, and other direct cash payments are considered to be cash matches, not in-kind matches.  They must be verified by a bank statement submitted at the time of application.

Third Party Gifts of Money Given to the Applicant – Both restricted gifts (gifts that are given specifically in support of a project) and unrestricted gifts (gifts that may be used at the recipient's discretion) are eligible to be matched. The donors must give the gifts directly to the applicant. THESE FUNDS MUST BE USED TO SUPPORT BUDGETED PROJECT COSTS DURING THE GRANT PERIOD.

In-Kind Matching Funds – Under federal guidelines, these are defined as "contributions other than cash." While they usually add real value to a project, they do not require an actual cash outlay. Some examples of in-kind contributions are volunteer services furnished by professional and technical personnel, donated supplies and equipment, and donated office space, materials, and services provided by third parties.

Third-Party Contributions – Cash and in-kind contributions (use charges, donated labor, services, materials, equipment, space, indirect cost) of a third party (for example, a University is collaborating on the grant), may properly be listed as grant in-kind contributions. The only requirement is that the value can be supported and documented for audit.

Donated Labor or Services – The value of any resource that is not part of the indirect-cost base and that is donated or dedicated to a project is treated as an in-kind contribution. Labor is the largest and most recent item included here. For example, if a full-time employee of a supporting organization is to dedicate 10% effort to a project, the value of that salary, benefits, and imputed indirect cost is reported as an in kind contribution.

Buildings and Material (only eligible for the REAP) – The value of donated equipment at their fair market value, the value of donated space at a fair rental value of comparable space (as established by an independent appraisal), and the value of loaned equipment at its fair rental value all constitute in-kind contributions.

In order to count cost and third party in-kind contributions towards satisfying a cost-sharing or a matching requirement, there must be verification and accurate documentation from the records of recipients or cost-type contractors. These records must show how the value placed on third party in-kind contributions was decided.

The following do not qualify as contributions that are eligible to release federal matching funds:

• Grant Preparation Expenses - Costs of preparing the application package for funding are ineligible
• Federal Funds - Whether they are disbursed directly to the applicant by an agency of the federal government, or indirectly through another organization (for example, if an agency of state government or a state humanities council receives a grant, funds from this source cannot be used as a match for another federal grant).
• Income earned from a grant after the item is transferred to the applicant: for example, interest or rent.
• Gifts that are given to an individual or organization associated with the project that are not given specifically in support of the project and that are not transferred to the applicant.
• Registration fees, or any other fee or charge for participation in or attendance at project activities.
• Deferred Giving - for example, a charitable remainder annuity trust, a charitable remainder unitrust, or a pooled income fund;
• Money or property that can be withheld if threshold levels are not obtained that is made available to the applicant through a contractual agreement in which the donor establishes rights over products resulting from funded activities.
• Contributions with conflicts that are made under circumstances where there is the appearance the donor might benefit financially by contributing to a particular project, for example,
  1. contributions from any institution or individual involved in project activities if the individual, the institution, or persons in their employ will be paid from grant or cost- sharing funds for services rendered to the project, or
  2. contributions from persons closely related to and living in the same household with someone who directs a grant project, if the project director will receive some form of remuneration for work performed on the project.

VAPG- Equipment and construction are ineligible expenses. (Exception: up to 10% for office equipment with a Working Capital VAPG).

REAP- Equipment and Construction of approved activities are eligible for program (Exception: agricultural tillage equipment and vehicles are explicitly not eligible).

VAPG- Expenses incurred once the grant has been approved and the grant agreement is signed are eligible.

REAP- Post grant application submission expenses are eligible. Applicant assumes risk for those expenses that happen if the grant is not approved.

If you are interested in receiving grant assistance from VA FAIRS, please contact us.