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Matching Funds Required:  Outsmarting a Catch-22

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It takes money to make money.  Who hasn't lived this fatalistic cliche at some point in their lives?  Big salaries require expensive degrees, but expensive degrees require fat financing.  We need a car to get to work but we need a job to buy a car.  It is no different in local government.  Many of the cash strapped municipalities that  could benefit the most from grants are discouraged from applying because of the matching funds requirement.  While the challenge can be daunting, meeting it is not impossible.  Hidden escape hatches do exist in this particular catch-22, here are some suggestions where to look for them.

Unmasking a Match

A must read  is How To Uncover Matching Funds for Your Grant Application by Beverly Browning.  It explains the difference between hard matches which are actual monetary funds and soft or in-kind matches which can serve as  equivalents.  For instance, volunteer work may be an in-kind match depending on the grant.  In certain situations, activities that you may already be allocating funds for may also count.  Refer to the article for seven categories that may qualify as in-kind matches, as well as other strategies to explore.


Making a Match

Crowdfunding is an emerging way for local governments to come up with matching funds.  In our Civic Crowdfunding for Local Government article, we mentioned a bike share program in Kansas City that raised money for a match that way.  The icing on the cake was the additional $50,000 in grants they received because funders were  impressed by the level of community   involvement  in the  initial fundraising campaign.


Meeting Your Match

They are rare and everyone wants them.  While most grants have several restrictions on what they can be used for, there are some grants that can be used as matches for state, federal, or other foundation grants.  They are known as unrestricted or general operating support grants.  Here are three examples  that can be used to satisfy match requirements:

  • Bank of America offers grants  in  the areas of community and workforce development and education that can be used as as general operating grants.
  • Community Possible Grants from U. S. Bank also allows for general operating funds.  Projects they support relate to play, work, and home.  Arts and cultural programming, education, small business development, and affordable housing are subcategories under those three categories.
  • The Doppelt Family Trail Development Fund which helps converts old railroads to multiuse trails is not technically an unrestricted grant but does allow its award to be used to leverage other funding sources. 

The Doppelt Family Trail Development Fund proves that  occasionally, it is possible for local governments to find grants to help them meet their match. The snag in the first two programs is that only 501(c)(3)s are eligible to apply.  This is the case with many unrestricted or general operating support grants.  However, given the growing trend of Native American tribes, local governments and school districts to work closely with nonprofits, learning about these opportunities may still be of some use.   


A Movement for the Match

Since unrestricted grants are both extremely useful and hard to find,  grant recipients are reiterating their value while some funders are rethinking their strategies.  Jennifer Teunon of the Medina Foundation examines developing trends in her article Can General Operating Support Become the New Normal?


Further  Resources

Some local governments are setting up their own nonprofits to widen their eligibility for awards.  Read about how the Pima Association of Government (PAG) used this strategy to win grant funding:   Local Governments: Setting Up a Nonprofit to Acquire Private Sector Funding