In-Kind Contributions & Matching Funds Overview

Cost Savings
The Difference Between In-Kind Contributions &
Matching Funds

Some grants require an institutional match, i.e., a commitment of institutional resources to the grant activity. In other cases, an institutional match may be desirable in order to make a proposal more competitive, even if it is not explicitly required by the sponsor. Some peer-reviewed programs award points for institutional match: the larger the match, the more points awarded. ORD grants officers can assist in putting together competitive match packages.

Institutional match may take one of two forms: in-kind contributions or matching funds.

IN-KIND CONTRIBUTIONS are defined under federal guidelines as "contributions other than cash." While they usually add real value to a project, they do not require an actual cash outlay. Some examples of in-kind contributions are lecturer replacement, indirect costs not charged to the sponsor, third-party contributions, and donated labor, materials, and services.

Lecturer Replacement. The difference between a faculty member's actual salary and the cost of a lecturer replacement is an allowable in-kind contribution. For example, if a faculty member making $50,000 receives a 25% release (two classes) for the academic year (two semesters), the salary value of that release is $12,500. If a lecturer were hired at $2,000 per class, $4000 would be charged to the grant. The salary difference ($8,500) plus benefits ($2,409), plus imputed indirect cost ($5,180), would be the entire value of the in-kind contribution ($16,089).
Indirect Cost. If a sponsor allows less than EMU's full indirect cost rate (45.5% of wages and benefits), the difference between the allowed amount and the full amount is treated as an in-kind contribution. On a large, labor-intensive project, the amount shown can be substantial.

Third-Party Contributions. Cash and in-kind contributions (use charges, donated labor, services, materials, equipment, space, indirect cost) of a third party, (for example, a sister institution collaborating on the grant) may properly be listed as EMU in-kind contributions. The only requirement is that the value can be documented for audit.

EMU-Donated Labor, Materials, Services. The value of any EMU resources that are not part of the indirect-cost base and that are donated or dedicated to a project is treated as an in-kind contribution. Labor is the largest and most recent item included here. For example, if a full-time EMU employee is to dedicate 10% effort to a project, the value of that salary, benefits, and imputed indirect cost is reported as an in-kind contributions.


Matching Funds, on the other hand, are actual cash contributions drawn from ORD's matching fund account. While this account is generous, it is not inexhaustible, and ORD officers must use it with discretion, following these guidelines:

Matching funds may be approved for externally sponsored projects under any of the following conditions: (a) a match is required by the sponsor; (b) a match is recommended and rewarded by the sponsor; (c) items are required for the successful completion of the project that the sponsor is unwilling or unable to provide; or (d) the project is important to the University's mission, but sponsor funding is inadequate to conduct it.

When a match is required by the sponsor, matching funds should not exceed 25% of the total direct cost of the project. When a match is recommended by the sponsor, matching funds should not exceed 10% of the total direct cost. Exceptions to these rules of thumb require the approval of the Director of ORD.

To allow for the recoupment of unexpected funds, match should be allocated to non-personnel budget categories. When possible, match should first be allocated to capitalized equipment, insuring that the title to the equipment will belong to the University rather than the sponsor.

If matching funds are committed to personnel to demonstrate the institutionalization of a project, the commitment should extend for only one year, with an agreement from the appropriate University unit to provide funding in subsequent years.

Matching funds should not be allocated for general purpose office equipment without strong justification for its purchase.

If it is necessary to reduce the cost of a project to make it more competitive, it is preferable to allocate matching funds rather than to waive indirect costs.

When matching funds are added to a project, every effort should be made to recover full indirect costs.

Matching funds should always be used to supplement and support the projects for which they are provided. Matching funds must be spent within the project period for items that would conform to the terms and conditions of the agreement. Matching funds may not be used for future proposal development.

Matching funds may not be awarded during the post-award period. Exceptions to this rule may be made only by the Director of ORD, and only with strong justification after all other funding sources have been exhausted. In no case will matching funds be used post facto to cover project overruns.

(Further information can be found in the "Eastern Michigan University Policy Manual" and the "Federal Grants Management Handbook.")

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Content Posted 06/21/2011 | Design Posted 04/17/2012