Methodology · Overview
Cost Share Methodology
Reviewed by Byron Malone · Last reviewed .
Primary sources
Federal grant cost share (matching) is governed by 2 CFR §200.306 (Cost sharing or matching) under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). This regulation applies to all federal agencies that award grants to non-federal entities.
The definition of allowable cost share: contributions must be verifiable from the recipient's records, not from another federal award, necessary and reasonable, allowable under the applicable cost principles, and meet all other requirements of 2 CFR §200.306(b).
In-kind vs. cash matching
2 CFR §200.306(d) allows non-cash (in-kind) contributions as match if they meet the allowability tests. The value of in-kind services is computed at the employee's regular compensation rate plus fringe benefits — we use the user-entered hourly rate × hours as the in-kind value calculation.
Third-party in-kind (subrecipient contributions) must be documented with records adequate for audit. We compute the cost-share ratio including in-kind but flag that documentation requirements are heavier than cash match.
Cost share ratio calculation
Cost share ratio = (total project cost - federal share) / total project cost. For a program requiring 50% match: for every $1 in federal funds, $1 must come from non-federal sources. Our calculator computes total project cost, required match amount, and achievable match from user-entered non-federal resources.
SBIR Phase I has no cost share requirement. Phase II has no mandatory cost share but agencies may prefer applicants with industry partnership contributions — we model this as a 'competitive match' signal, not a compliance requirement.
Limitations
Cost share allowability is program-specific — some programs prohibit in-kind match. Program income (revenue generated during the project period) may offset cost share in some agency policies. Unrecovered indirect costs are allowable as match only if the award does not require full indirect cost recovery — this is agency-dependent.
Update protocol
This category is reviewed quarterly. Immediate updates are triggered by changes to the primary source documents listed in the citations above — rate table revisions, new agency guidance, or regulatory amendments.
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