Matching funds

Matching funds

Matching funds is a term used to describe the requirement or condition that a generally minimal amount of money or services-in-kind originate from the beneficiaries of financial amounts, usually for a purpose of charitable or public good.

Charitable causes

In example, Dr. Booker T. Washington, a famous African-American educator, had a long-time friendship with millionaire industrialist Henry Huttleston Rogers who provided him with substantial amounts of money to be applied for the betterment and education of black Americans in the late 19th and early 20th centuries.

Dr. Washington later wrote that Henry Rogers had encouraged projects with at least partial matching funds, as that way, two ends were accomplished:

  1. The gifts would help fund even greater work.
  2. Recipients would have a stake in knowing that they were helping themselves through their own hard work and sacrifice.

Using the matching funds philosophy, after Rogers' death, Julius Rosenwald and the Rosenwald Fund continued and expanded the work, eventually funding over 5,000 Rosenwald Schools between 1912 and 1932. During that time, over US$4.6 million additional dollars were contributed by blacks in the communities responding to the challenge thus presented.

U.S. federal funding

In the United States, many projects in the various states and communities are partially funded with federal grants with a requirement for matching funds. For example, the Interstate Highway System was primarily built with a mix of 90% FHWA funds from the Highway Trust Fund and 10% matching state DOT funds.

In politics

In American politics the term matching funds refers to the money a presidential candidate is given by federal government to match the money they have raised personally. Candidates can expect up to US$250 extra from public funds for each contribution from an individual they receive.

This usually only applies to the two main parties; as for third party candidates gaining the benefits of matching funds they must additionally have received 5% of the popular vote in the previous election. Hence the anomaly of Ross Perot standing as Reform Party candidate in 1992 and receiving 18% of the vote, yet receiving no matching funds because the Reform Party did not receive 5% of the vote in 1988; whilst Pat Buchanan, running as the Reform Party candidate in 2000, did receive matching funds despite winning only 0.4% of the vote.

The source of the funds comes from a $3 voluntary checkoff on the U.S. Income Tax form.

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