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Matching Grants for Small Nonprofits: What They Are and How They Work

eleo blog matching grants for small nonprofits

You’ve probably heard of matching gifts, which are typically offered by employers to essentially double the donations of employees. You’ve probably heard of grants, which are typically financial awards from a foundation, government agency, corporation, or individual to qualifying nonprofits.

But have you ever heard of matching grants?

Just like grants and matching gifts can be extremely valuable sources of funding for small nonprofits, matching grants can take your fundraising to a whole new level! Let’s take a look at what matching grants are, how they work, and where to find them.

What is a matching grant?

A matching grant, also called a challenge grant, is a monetary gift awarded by a grantor that agrees to match a certain amount of money that the nonprofit raises independent of the grant. 

While the primary purpose of a matching gift is to encourage employee giving, the primary purpose of a matching grant is to encourage nonprofits to raise funds on their own to trigger additional grant funding. That’s the challenge!

A matching grant starts like any other grant. Let’s say your small nonprofit receives a grant for $10,000. You’re guaranteed to receive that amount. In the case of a matching grant, the grantor will set a specific matching amount that your nonprofit must raise on its own within a certain timeframe to qualify for the match.

The grantor essentially says, “If your small nonprofit raises $5,000, we’ll award you with another $5,000 on top of the $10,000 you’ve already received.” In some cases, the matching amount will be more than a dollar-for-dollar match!

Why is a matching grant valuable to a nonprofit?

Obviously, a matching grant is an opportunity to significantly increase revenue. Most matching grants are focused on a particular campaign or initiative, and a matching grant can help you unlock more funds and reach your goal quickly. 

A matching grant also motivates nonprofits to increase their own fundraising efforts with a specific goal in mind. In other words, it gives you skin in the game. A matching grant helps you make the grant-funded program more sustainable so you can continue to make a difference after the grant funds have been awarded and spent.

If there’s a downside to matching grants, it’s the complexity of the process. Once you apply and are approved for a matching grant, you’ll have to track all donations to the matching grant fundraising campaign, submit reports to the grantor for verification, await review of reports and disbursement of funds, and update the grantor on how funds are used. 

The good news is that donor management software simplifies many of these tasks. This allows you to focus on optimizing your fundraising strategy and making progress with key initiatives that support your mission!

Want to start looking for matching grants? Check foundation websites, grant databases, and state and local government agency websites. Sign up to receive grant alerts to find out about grants as they’re announced. Remember, matching grants can be a tremendous funding source that enables you to make a bigger difference!