Cost Share and Matching Requirements in Federal Health Grants Explained
Cost sharing and matching requirements are among the most misunderstood aspects of federal grant funding. Many otherwise eligible organizations hesitate to apply for grants because they see a match requirement and assume they cannot afford it. In reality, understanding how match works can open doors to significant funding that might otherwise go uncontested.
What Is Cost Share?
Cost share (also called "match") is the portion of a project's total cost that the grantee must cover from non-federal sources. When a grant requires a 20% match on a $500,000 award, for example, your organization must contribute $100,000 toward the project. The total project cost would be $600,000, with the federal share at $500,000 and your share at $100,000.
Cost share requirements are established in the authorizing legislation for each grant program and specified in the Notice of Funding Opportunity. Not all federal grants require cost share. Many HRSA Health Center Program grants, for instance, have no match requirement.
Types of Match
Federal regulations (2 CFR 200.306) define several types of allowable cost share:
- Cash Match: Direct financial contributions from your organization or third parties. This includes funds from state or local government, private donations, or organizational revenue dedicated to the grant project.
- In-Kind Match: Non-cash contributions that have a measurable value. Common examples include donated staff time (valued at actual salary and fringe benefit rates), donated supplies or equipment, donated office space (valued at fair market rental rates), and volunteer time (valued at rates consistent with the work performed).
- Third-Party Match: Contributions from partner organizations. If a hospital donates clinical supervision time to your grant-funded program, that time can count as third-party in-kind match.
Which Health Grants Require Cost Share?
Match requirements vary significantly across programs. Here are some common examples:
- USDA Distance Learning and Telemedicine (DLT): Requires a 15% match. In-kind contributions are allowed.
- SAMHSA Discretionary Grants: Some require match, others do not. Always check the specific NOFO. CCBHC Expansion grants, for example, generally do not require cost share.
- HRSA Section 330 (Health Center Program): No cost share required for most Section 330 awards, making these grants particularly attractive for under-resourced organizations.
- CDC Cooperative Agreements: Requirements vary by program. Some CDC programs require significant match, while others are fully federal-funded.
- ACF Community Health Worker Grants: Often include match requirements ranging from 10% to 25%.
How to Budget for Cost Share
If a grant requires match, build it into your budget from the start. Here are practical strategies:
- Identify in-kind contributions early: Staff time, existing equipment, and facility space that will be used for the grant project can often count toward your match. Document these carefully with time-and-effort reports and fair market value assessments.
- Leverage partner commitments: Letters of support from partner organizations can include specific commitments of staff time, space, or resources that serve as third-party match.
- Do not over-commit: You are legally obligated to provide the match you commit to in your application. If you cannot meet your match obligation, it can jeopardize your grant and future funding. Budget conservatively and only commit to match you are confident you can document.
- Track everything: Federal auditors will review your match documentation. Maintain detailed records of all cost share contributions, including timesheets, donation receipts, and fair market value calculations from the start of the project.
Understanding cost share requirements should not discourage you from pursuing federal funding. In many cases, the resources you are already dedicating to a program can count toward your match, making the grant more accessible than it first appears.