Grants, Reimbursements, and Matching Funds

Congratulations! You’re applying for a grant, or you were just awarded one. So when will you receive the money, and what are you required to do before you get it? The answer to that question will depend on what type of grant it is.

Some funders simply write a check. Others require or challenge you to raise matching funds. In some cases, you must spend the money first, before you can receive the grant as reimbursement. In this post, we’ll discuss all three of these scenarios.

Be sure that you understand the structure and requirements of each grant before you apply, and incorporate those requirements into your fundraising strategy and project budget.

Simple Grants

The easiest type of grant to receive is one that comes with no requirements. You apply, your application is approved, and the foundation or agency sends you a check.

You will still have reporting requirements – established by the foundation or by common courtesy. In my next post, I’ll discuss grant contracts and managing and reporting on grants.

Challenge Grants

Depending on the size and length of your fundraising campaign, you might consider being open to a challenge grant. This means that the grantor would promise to give you a gift if you can raise some additional amount of money. If you’ve ever listened to an NPR radio station’s pledge drive, this is a tactic that they use often. The benefit – to the grantor, to you the recipient, and to other donors – is that every dollar raised is leveraged to bring in more money. In addition, a challenge grant can be motivating for many donors who want to help you reach that goal.

Challenge grants can come in different forms. Here are just a few examples:

  • If you raise $10,000, the grantor will match that dollar-for-dollar with a $10,000 gift.
  • If you raise 80% of your goal, the grantor will give you the other 20%.
  • The grantor will match every dollar you raise, up to $2,500.

If you are open to challenge grants, be sure to mention that in your cover letter or grant application. You might also ask several loyal donors to pool their gifts as a challenge grant.

Matching Grants

The term “matching grant” means that you are required to raise some amount of money to “match” the amount of the grant. The money you raise in addition to the grant is called “the match.”

Matching grants are similar to challenge grants, with the exception that the timing for your raising the match may vary. For example, a matching grant might require you to have the match in hand before you apply, or within some period of time after you receive the grant. Alternatively, a matching-grant donor might only require that you show proof of the match in your final grant report.

You can use two matching grants to match each other. For example, one of my clients received a $30,000 grant from the Texas Preservation Trust Fund and $25,000 grant from the Houston-Galveston Area Council, both of which required a $1-to-$1 match. The TPTF grant provided the full match for the H-GAC grant. In order to satisfy the TPTF match, we then only had to raise another $5,000.

Reimbursement Grants

Reimbursement grants require you to spend some or all of the grant amount before requesting payment. Generally, you have to submit copies of invoices and cancelled checks, and sometimes photographs of the completed work, with your request for reimbursement. This enables the grantor to be sure that you have done what you said you were going to do.

Since the terms of reimbursement grants vary widely, I find that it helps to make a plan and schedule for how and when we can apply for reimbursement, including the documentation required.

You might also be able to work with your vendors to move the reimbursement process along. For example, I have a client who had to raise $8,000 to pay for a Master Plan for their building restoration project. We received a $4,000 matching grant from the National Trust and a $1,700 reimbursement grant from the County Historical Commission. The National Trust doesn’t require you to have the match in hand right away, so we received that money immediately. By working with the architect to invoice us for $1,700 after the completion of an early milestone in the planning process, we can then submit our request for reimbursement to the CHC while the rest of the project is ongoing. That enables the client to have all of the grant funds in hand by the time the process is complete and they receive the architect’s final invoice.

Final Thoughts

  1. Don’t be surprised if you come across a reimbursement grant that also requires a match! This is a fairly common combination
  2. For all grants, record keeping is very important! You must keep copies of all invoices, cancelled checks, etc. in order to apply for reimbursement. You should also take pictures of the work being done, including before, during, and after the project is complete. If the project involves events, be sure to capture photographs of the different components of the event – not just a generic picture of a bunch of people in a room.
  3. Whenever you apply for a grant, whether you get it or not, send a thank-you letter after notification to let the foundation or agency know how much you appreciate the opportunity to apply. You would be shocked by how often people fail to say “thank you” – even when they receive a grant! With that said, most foundations do not want gifts or recognition plaques. A heartfelt letter from the Board president (and Executive Director, if you have one) is more meaningful.

Next time: Grant contracts, management, and reporting!

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