Project matching fund (co-funding) operates in the manner of a “down payment” which will become accessible when another source(s) or matching fund is secured. This way, a partner commits some financial or other support as an incentive for others to match their commitment in funding a project or initiative.

A matching fund is a flexible way of sharing responsibility and commitment among stakeholders and partners, and it inspires creativity in exploring various sources of funding and resourcing. A matching fund can be arranged in a variety of ways depending on the target amount, the number of target partners, or the nature of the project. For instance, a partner may match the budget earmarked by a state government or the federal government for supporting educational initiatives on the basis of 50-50% contribution, 60-40%, 50-30-10-10%, etc. The funds may or may not be tied to a specific project.

A commitment from a stakeholder, state government, beneficiary school or community in the form of a matching fund is a clear demonstration of ownership, an indication that they are invested in the project and will do their part in ensuring its sustainability.