3 Tips to Master the Matching Game
By : Jane Ramachandran
Categories : funding, small business, not-for-profit, money, grant ready, cash flow, government grants, application, matching |
This article is a continuation of our series covering grant readiness. In my last post I shared three of the keys to grant readiness: a well-defined project, business systems and cash contributions. Now let's look at how a matching contribution strategy can help determine the best funding program for your project, demonstrate your grant readiness and enhance your chances for success.
The truth is, the definition of a matching contribution and how it is treated differs from one agency to another and even between programs from the same agency. Learning these differences will help you understand the related impact on your application's success, and even help determine which funding to pursue. Before we jump into how to navigate strategies for matching funds, here is a review of important terms.
A project Applicant is usually
- the project lead, and
- legally registered as a company, a not-for-profit, a charity, a college or a university.
The Applicant contribution refers to:
- contributions to the project and
- provided in cash or in kind.
A cash contribution is usually characterized as:
- money that is not already spent; and
- money that is used to pay for an eligible expense during the project term, either directly or through a project partner (e.g. a college or university).
In-kind contributions are usually characterized as:
- products, services, salaries, etc. from or acquired by the Applicant which represent a cost to the Applicant and are used within the project; and
- are measurable, quantifiable, and at market value.
General support contributions are usually characterized as:
- a letter or other such indication that you or a stakeholder believes in the merit of the project and encourages the agency to fund it; and
- is most impactful if customized (advice sidebar: never use the same template for general support letters).
Translated, funders value the above contributions something like this:
Having cash > Securing in-kind contributions > Demonstrating general support
Now for the kicker. The same contribution can be defined as cash or in-kind and matchable or not depending on the funding agency. Here are some examples from Canadian federal and provincial funding agencies:
Company salaries can be defined as:
- in-kind and matchable with the Natural Sciences and Engineering Research Council of Canada (NSERC)
- in-kind and not matchable with the Northern Ontario Heritage Fund Corporation (NOHFC)
- cash-equivalent and matchable with the Industrial Research Assistance Program (IRAP)
University / not-for-profit salaries can be:
- in-kind and not matchable with the Ontario Centres of Excellence (OCE)
- in-kind and matchable with the Ontario Research Fund (ORF)
Depending on the agency, the applicant contribution percentage ranges from 0-85% cash and 0-100% in-kind. Translated, you can pay nothing, all of it, or some value in between. The actual amount you pay depends on a number of factors, including which funding program you choose, your project details, who is the applicant, etc.
As you can see, it is not straight forward, highlighting the importance of understanding your needs and cash situation as well as funder requirements before putting pen to paper.
Here are three tips to navigate these agency matching rules:
Start with a clear picture of your money situation
Pay attention to what is considered cash and in-kind
Learn how to maximize your in-kind contribution
Bonus Tip: Don’t match with cash at all!
Yes you heard me correctly. As you consider the steps required for your project, think about whether you can initiate a first step through funding programs that require no matching cash. Examples include NSERC Interaction, Engage and Applied Research and Development Grants (Level 1), as well as some foundations.
Review how much cash and in-kind you have, and work out how much you need to do this project. (A great start to help get your bearings is to answer our classic Three Key Questions.)
If you are short on cash but have plenty of in-kind, direct your focus to the funding programs that will match or recognize that contribution as a cash equivalent. Examples include the NSERC Collaborative R&D program and IRAP.
A common mistake is to undervalue contributions, or miss some altogether. Don’t leave potential matching money on the table. Evaluate all potential in-kind contributions and learn how to maximize their value according to the rules of the respective funding agency. For example, some programs allow you to include salary benefits, some allow an overhead calculation, and others the value of in-house staff. These can potentially add up to thousands of dollars, which can be matched for new project cash.
The in-kind topic comes with a slight warning: make sure to document everything. If you report a contribution there is usually a requirement to show documented proof come reimbursement time. If you think that will be impossible to do, and you don’t have any funding administrative support, then be sure to only include the most easily reportable contributions in your application.
The matching becomes even more interesting when you realize that the same project can be worth more (or less) depending on what funding route you take. The key is in learning the programs and their matching rules (or get assistance) so that you know which one is right for you.
Inspired? Questions? Have some advice to share? Join in the conversation below!
Until next time,
PS - Next time we'll provide tactical advice on how to decrease your upfront matching cash cost when applying for funding. Be sure to sign up for our newsletter (yellow box on the right) to get these posts delivered straight to your inbox!comments powered by Disqus