Grant Match and Cost Sharing: What Counts Under 2 CFR 200.306
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How we wrote this: A plain-English summary of 2 CFR 200.1 and 200.306, checked October 29, 2026. General information, not legal or audit advice; your award terms and agency guidance control.
Definitions
Under 2 CFR 200.1, cost sharing is the part of project costs not paid by federal funds. Matching is cost share at a required level. The NOFO tells you whether match is required and at what share; see how to read a NOFO.
What must be accepted (2 CFR 200.306(b))
Agencies and pass-through entities must accept cost share, whether cash or third-party in-kind, and whether committed by you, a subrecipient or a third party, when it:
- is verifiable in your records;
- isn't counted toward any other federal award;
- is necessary and reasonable for the award's objectives;
- is allowable under the cost principles (subpart E); see allowable costs;
- isn't paid by another federal award, unless the authorizing statute allows it;
- is in the approved budget, when required; and
- conforms to the rest of Part 200.
Other sources of match
- Unrecovered indirect costs (200.306(c)) can count, with prior approval. That's the gap between what you charged and what your approved rate would allow; see the de minimis rate.
- Volunteer services (200.306(e)) from third-party professionals and other labor count if necessary for the program. Value them at rates consistent with what you pay for similar work, or the local labor market if you don't have those skills in-house.
- Donated services and property (200.306(d)) must be valued under the cost principles.
- Documentation: third-party in-kind contributions must be documented and, as far as feasible, supported the same way you support your own costs.
Practical tips
- Budget match by source: general fund, state grant, partner or in-kind.
- Get commitment letters from partners.
- Track match through closeout. It's reported on the SF-425; see SF-425 and closeout.
- Some programs set their own share. For example, EPA's SRFs require states to provide a 20 percent match; see state revolving funds.