Types of Match Funds

All applications for ARC funding must include documentation from the matching source indicating a commitment to provide the required match (e.g., a letter from the match source or a matching grant award agreement). 

Cash as Match

Cash is a common form of match. Cash matches may be drawn from grantees’ own funds or cash donations from third parties, such as partner organizations. A cash match contribution is an actual cash contribution. Loans are also counted as cash. 

Another form of cash match includes grant awards from other federal, state, or local governmental entities and other forms of governmental financial assistance. ARC generally permits match funding from these sources. However, whether the match will be accepted by ARC may depend on the circumstances, including the terms and conditions of the financial assistance and the agreement of the awarding agency. 

Guidance for Alternative Cash Match Sources

Unrecovered Indirect Costs

Unrecovered indirect costs are the difference between the amount charged to the federal award and the amount that could have been charged to the federal award under the recipient’s or subrecipient’s negotiated or de minimus indirect cost rate. Unrecovered indirect costs may be included as part of matching funds if included in an approved budget.      

Program Income

Program income may be used to meet the match requirements if approved by ARC. If an applicant intends to use program income as match, it must be accurately accounted for in a project budget and further explained or described in the corresponding narrative. Please see 2 CFR § 200.307 for more information.

Federal, State and Local Grants

While ARC permits the use of other grants as applicant match or cost share, including those offered by federal agencies, this may not be the case in return. If an applicant intends to use another federal grant as match on an ARC project, it is important to first obtain the approval of the other federal awarding agency. 

In-kind Match

Match funding can also be pledged as “in-kind” or non-cash donations, which are allocated to the budget in accordance with the value of the contribution. An in-kind match can be in the form of real property (including land and buildings), equipment, supplies, services, training or other contributions. 

Examples of in-kind donations include but are not limited to the following: 

  • Personnel time given to the project
  • Donation of or use of equipment, like use of a crane or bulldozer
  • Expert services, like engineering or architectural services
  • Value of a lease for project space

In general, in-kind contributions may take the form of any allowable cost for the project, provided an appropriate value may be allocated.  

Valuation and Application of In-kind Match Funds

Match funds, including cash and in-kind contributions, must meet the following criteria to be allocable to an ARC grant:

  • Verifiable from the recipient or subrecipient’s records; 
  • Not included as contributions for any other federal award;  
  • Necessary and reasonable for achieving the ARC award objectives;  
  • Allowable under the Uniform Guidance Subpart E;  
  • Provided for in the approved budget or as otherwise authorized by ARC; and,
  • Conform with applicable provisions of the Uniform Guidance, federal law, and ARC’s terms and conditions. 

Values attributed to in-kind match funds must be consistent with the principles of the Uniform Guidance, including any limitations in Subpart E. See 2 CFR § 200.306 for more information on the valuation of in-kind match.  

Guidance for Common In-kind Match Sources

Personnel Time

Grant recipients and subrecipients may provide a match that represents the time and effort spent on the grant project by their own personnel or those of other entities in service of the grant.  

When allocating the time and effort of a grant recipient or subrecipient’s employee as match, the recipient or subrecipient should follow the same rules as they have utilized for award funds. This includes making sure the match allocation is consistent with the recipient or subrecipient’s policies and procedures and with the Uniform Guidance (see 2 CFR § 200.430 and 431). 

When a third-party organization provides the services of an employee, these services must be valued at the employee’s regular rate of pay plus an amount of fringe benefits that is reasonable, necessary, allocable, and otherwise allowable. The organization’s applicable indirect costs may also be included. See 2 CFR 200.306(f) for more information.

Services

Services provided at a discount by a contractor may be used as match if the service is a necessary part of the ARC project. Procurement of the contractor must still adhere to the Uniform Guidance Procurement Standards (Subpart D), and the contractor’s undiscounted rate must be reasonable. The value of the match in this instance would be the difference between the undiscounted rate and the discounted rate.

Values for recipient or subrecipient contributions of services must be established in accordance with the cost principles in the Uniform Guidance Subpart E. If third-party professionals, consultants or other personnel provide work on a voluntary basis for the grant project, the rates allocated to those services should be consistent with that paid for similar work by the recipient or subrecipient. However, if the recipient or subrecipient does not perform this sort of work, rates should be consistent with those paid for similar work within the recipient or subrecipient’s labor market. 

Property

The value of property provided as match must be determined in accordance with the principles provided in 2 CFR § 200.306

Land and Buildings

Recipients and subrecipients may use buildings or land as match for construction projects or another long-term use, with ARC approval. The value of the donated property for matching purposes would be the lesser of: 

  1. The value of the remaining life of the property recorded in the recipient or subrecipient’s accounting records at the time of donation; or  
  2. The current fair market value as established by an MAI (Member of the Appraisal Institute) appraisal or another independent appraiser if approved by ARC.

However, ARC may approve the use of the current fair market value of the donated property, even if higher than the value of the remaining life of the property, if there is sufficient justification. 

Space

Recipients and subrecipients may use as match the value of space being used for grant purposes. The value of this donated space must not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality. 

Equipment and Supplies

Recipients and subrecipients may match the ARC award with the value of equipment and supplies provided to the project by themselves or by third parties. The value of property provided by a grant recipient or subrecipient would must be consistent with the Uniform Guidance Subpart E. When property is donated by third parties, special rules apply:

The value of donated equipment and supplies cannot be higher than the fair market value of the property at the time of the donation.

If the third party makes the grant recipient or subrecipient the owner of the equipment they are donating (transfers the title), the appropriate match value of the equipment would be determined by the scope of the project it is being used on. If the purpose of the grant project is to acquire equipment, the full fair market value of the donated equipment may be allocated to the grant. If the purpose of the grant project is to conduct activities that only necessitate the use of equipment, generally the recipient or subrecipient should allocate depreciation charges as match. However, ARC will consider the allocation of the fair market value on a case-by-case basis depending on the nature of the grant project. 

Loaned Equipment

Recipients and subrecipients may also match award funds with the value of equipment loaned by a third party for temporary use on the grant project. In that case, the match value must not exceed the equipment’s fair rental value.