Cost share and match, and what counts
Match is a documentation problem, not a funding one. The five criteria a contribution must meet, and the unrecovered-indirect option most orgs miss.
LAST REVIEWED 28 AUGUST 2026
When a grant carries a match or cost-share requirement, it is easy to read it as a funding problem — find the other 20% somewhere. The trap is that it is really a documentation problem. Unsubstantiated match is one of the most common audit findings there is, and it does not matter how real the contribution was if you cannot prove it the way the rules require.
What actually counts as match
Under 2 CFR 200.306, a contribution only counts toward cost sharing if it meets all of a short list of criteria. A contribution must:
- be verifiable from your own records;
- not be counted as a contribution for any other Federal award — no using the same match twice;
- be necessary and reasonable for achieving the objectives of the award;
- be allowable under the cost principles (subpart E);
- not be paid by the Federal Government under another award, unless the program’s authorising statute specifically permits it.
Unrecovered indirect costs can count
One useful and under-used option: 200.306 lets you count unrecovered indirect costs — indirect you were entitled to but did not charge — toward your match, with the prior approval of the Federal agency or pass-through entity. For an organisation struggling to find cash match, this can close part of the gap using costs you are already bearing. The catch is the prior approval; get it in writing before you rely on it.
The practical version is to track the match commitment on the award the same way you track the federal spend — as a running total against a target, with each contribution tied to a record — rather than assembling it in a panic at report time. That is the view Grantwell keeps per award, so the match is provable on the day it is claimed, not reconstructed after the fact.
This guide is general information about how grant compliance work is commonly organised, not legal, audit or accounting advice. Grant rules change, and terms vary by funder and award — always check your own award documents and the current regulation, and talk to your auditor about your specific circumstances.
Primary sources
- 2 CFR 200.306 — Cost sharing or matching — The criteria a contribution must meet to count as match, and the prior-approval route for counting unrecovered indirect costs.
- 2 CFR 200.407 — Prior written approval — The prior-approval requirement that applies to counting unrecovered indirect costs as cost sharing.
This guide is general information about how grant compliance work is commonly organised, not legal, audit or accounting advice. Grant rules change, and terms vary by funder and award — always check your own award documents and the current regulation, and talk to your auditor about your specific circumstances.