Matching Grant Bookkeeping: How to Track Your Match

A funder offers $50,000 on condition that your charity contributes $25,000 from other sources. The programme runs, the money is spent, and at reporting time somebody has to prove the $25,000 existed and came from somewhere the agreement allows. That proof is a bookkeeping problem, and it is a different problem from recording the grant itself. A match has to be tracked, sourced, valued and reported, and the value the funder accepts is not always the value that belongs in your financial statements. This guide covers both halves.

What counts as match, and who decides?

The agreement decides, and the definitions vary more than anything else in grant funding. Read the clause before you plan how to meet it.

Agreements commonly allow three kinds of match: cash your charity contributes from unrestricted funds or from another eligible source; in-kind contributions of goods or services used in the programme; and third-party contributions, meaning cash or in-kind from someone other than you or the funder.

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They also commonly exclude things. Other government funding is frequently excluded, particularly from the same level of government. Costs already counted toward another grant's match are almost always excluded. Some agreements exclude volunteer time; some allow it at a stated rate.

Copy the definition and the exclusions into your grant register when the agreement is signed. The match requirement is the term most likely to be interpreted optimistically twelve months in.

How do you track the match in the ledger?

With a match dimension or a set of memo accounts, so match spending is visible without distorting your revenue. The mechanism depends on what kind of match it is.

Cash match is straightforward. The costs are yours, paid from your funds, and coded to the programme with a match tag alongside the grant code. Nothing unusual happens on the revenue side.

Third-party cash is recorded in its own account, with a note tying it to the match requirement. When it becomes revenue follows your contribution recognition policy rather than the date the cheque cleared: an externally restricted contribution is recognised as the related expenses are incurred under the deferral method, or within the appropriate fund under the restricted fund method. If the third party is another registered charity, remember that funds received from another registered charity are reported at line 4510 on the T3010 and you do not issue an official receipt for them.

In-kind match is where the two halves separate, and the next section covers it.

Whichever applies, keep a running match schedule per grant showing the requirement, the amount met to date by source, and the shortfall. Checking it monthly is what stops a match gap becoming visible only at closeout.

What value goes on the match report, and what goes in your statements?

They can be different numbers, and treating them as one is the mistake to avoid. The funder's rules govern the report; accounting standards govern the statements.

An agreement may permit donated goods, discounted services or volunteer hours to count toward the match at a stated value or at fair value. That is a contractual permission about reporting, and you report it accordingly.

Your financial statements answer to a different rule. Contributed materials and services may be recognised, as a policy choice, only where fair value can be reasonably estimated and the materials and services are used in the normal course of your operations and would otherwise have been purchased. Volunteer time frequently fails that test, which is why so few charities recognise it.

So the match can be reported to the funder without appearing in the statement of operations. Where that is the case, the match lives on the match schedule reconciled to the ledger, and the schedule is what supports the report.

Where you do recognise a contributed good, record it at the value determined for accounting purposes. How a charity establishes fair market value for a non-cash gift is a subject of its own, and the receipting side of it is covered separately, so do not assume the funder's match value and the value on any official donation receipt are the same figure.

How do you document the source of the match?

With something a reviewer can trace to a person, a date and an amount, and evidence that it has not been counted twice. Documentation is what a match review is.

For cash match, the ledger detail is the evidence, plus a note of which unrestricted source it came from. For third-party cash, keep the correspondence or agreement confirming the contribution was for this programme.

For in-kind goods, keep a record naming the donor, the item, the date received, how the value was determined and who determined it. For discounted services, keep the supplier's invoice showing both the normal rate and the discount, since the discount is the contribution.

For volunteer hours where the agreement allows them, keep signed hour records with dates and activity, and the rate basis the agreement specifies.

The double-counting check is the one people skip. Where your charity has more than one grant with a match requirement, keep a single schedule across all of them, so the same donated equipment cannot support two matches. That is exactly what a reviewer tests.

What happens if you fall short of the match?

The agreement decides, and the remedies vary. Some agreements provide for a proportional reduction in the funder's contribution. Others require repayment, reduce a final instalment, allow a period to cure the shortfall, or set out something else entirely. Read your own clause rather than assuming the common one.

Where a pro-rata reduction applies, a charity that meets $20,000 of a $25,000 match on a $50,000 grant may find the funder's contribution reduced accordingly, with the difference recovered from the final payment or repaid.

Raise a projected shortfall early. Options that exist in month eight, such as reallocating an eligible cost into the programme or seeking a third-party contribution, do not exist at closeout.

Where a shortfall is unavoidable, document why. A funder that understands the cause is more likely to accept a revised plan than one presented with a number and no explanation.

Track the outcome in the ledger properly. A reduction in the funder's contribution reverses revenue and any receivable; it does not become an expense.

Setting up the match schedule alongside the grant structure at the start is a small job. Our guide to fund accounting covers the ledger structure it sits on, and recording donations covers the mechanics for the contributed side. Where a charity is running several matched grants at once, ongoing bookkeeping support should be maintaining the cross-grant schedule.

What is not a match?

Anything the agreement excludes, anything already counted elsewhere, and anything you cannot evidence. Three exclusions cause the most trouble.

An employer matching-gift programme is not a match in this sense. When a company matches its employees' donations to your charity, the question is a receipting one, about which party is the donor of which amount, and it belongs with third-party platform receipting rather than with grant cost-sharing.

Volunteer time is not automatically a match. It counts only where the agreement says it does, at the rate the agreement specifies, with hour records to support it. And a charity can never issue an official donation receipt for donated services, which is a separate subject with its own rules.

Costs incurred outside the grant period are not a match, even where they are the right kind of cost for the right programme. The period test applies to the match exactly as it applies to grant spending.

Frequently Asked Questions

Can we use another grant to meet a match requirement?

Usually not, and often expressly not where the other funding is from the same level of government. Check both agreements, because the restriction can appear in either one, and using restricted funds to match another grant can breach the first agreement as well as the second.

Does in-kind match go in our financial statements?

Only if it meets the recognition test for contributed materials and services: fair value can be reasonably estimated, and the goods or services are used in the normal course of operations and would otherwise have been purchased. Reporting an amount as match to a funder does not by itself put it in your statements.

Can we count volunteer hours?

Only where the agreement permits it, at the rate it specifies, supported by signed hour records. Note that permission to count hours toward a match has nothing to do with receipting, and a charity cannot issue an official donation receipt for donated services.

Who values donated goods used as match?

The charity does, and it needs to document who determined the value and how. Where the same gift is also being receipted, the receipting rules govern the receipt amount, and the two figures should be reconciled rather than assumed identical.

What if the donated item is worth more than we need for the match?

Report only what the agreement allows toward the match and record the rest in the normal way. Inflating a match beyond the requirement adds risk without adding funding.

How often should we check the match position?

Monthly, on the same schedule as the grant variance review. A match shortfall found in month ten is a problem with options; the same shortfall found at closeout is usually a reduction in the funder's payment.

This article covers bookkeeping for matching and cost-share requirements as at September 2026. What qualifies as match, at what value, and what happens on a shortfall are set by each grant agreement. Recognition of contributed materials and services in financial statements follows accounting standards and your organisation's stated policy.