More than 60% of federal resilience funding in the Bipartisan Infrastructure Law requires a local match, with an additional 13% requiring a match under certain conditions.
Requirements for matching funds have been included in federal funding programs to promote economic efficiency and ensure communities have “skin in the game.” In practice, however, they can impose insurmountable burdens on communities, creating disadvantages for rural and lower-capacity communities that cannot afford the required match.
Previous research has demonstrated how scoring criteria, the benefit-cost analysis, reimbursement models, and other application requirements create inequities in federal funding distributions. Local match requirements compound these inequities.
What is a local match?
A local match, in the simplest terms, is nonfederal cash or in-kind contributions that a grantee is required to contribute toward project costs funded by a federal grant award.
The terms “cost sharing” and “match” are often used interchangeably. Match requirements are a type of cost sharing – typically measured as a percent of project costs. Many federal grants require applicants to pledge to pay 20-30% of the total project cost. For federal awards, cash and in-kind contributions that are reasonable, necessary, and eligible can fulfill matching requirements.
Match requirements are shown to create barriers
In 2022, two U.S. Government Accountability Office reports – one on Flood Mitigation and one on Disaster Recovery – highlighted how local match requirements prevent some communities from investing in climate risk mitigation. The reports noted that communities need more flexibility with cost share requirements and suggested that one solution was to standardize, reduce, or even eliminate match requirements in climate hazard mitigation programs.
The Building Resilient Infrastructure and Communities (BRIC) program, FEMA’s flagship climate resilience grant program, has been heavily scrutinized. It aims to shift the federal focus away from reactive disaster spending and toward proactive investment in community resilience. However, evaluations of BRIC have found geographic inequities in funding distributions and suggest waiving or reducing local match requirements to better reach underserved populations.
FEMA’s BRIC program also scores applicants higher when they can provide more than the minimum local match, further exacerbating inequities. In the FY2021 and FY2022 BRIC competitions, FEMA provided an additional five points to applicants that provided a 30% local match instead of the required 25%. The intent was to incentivize local investments, but in practice the scoring rubric made it more difficult for smaller communities to compete.
“Matching funds are one of the most discriminatory policies against disadvantaged communities, communities in persistent poverty counties, and communities in states that have very limited philanthropic investment.”
Ines Polonius, CEO of Communities Unlimited, Reimagine Rural podcast, A visit to Washington, D.C.