In philanthropic giving, foundations and corporations often give money to nonprofit entities in the form of matching gifts. Corporate matches often take the form of employee matching gifts, which means that if an employee donates to a nonprofit, the employee’s corporation will donate money to the same nonprofit according to a pre-determined match ratio (usually 1:1).
For foundations, matching gifts are in the form of grants made directly to nonprofits, under the qualifying condition that the nonprofit raise a set quantity of money before the grant is bestowed. The benefit of foundation matching grants is that they provide greater incentive leverage when a nonprofit is fundraising from its constituency. If a foundation approves a 1:1 matching grant, donors know that their money will be doubled. On the other side, foundations who give matching grants receive assurance of the nonprofit’s capacity to raise adequate funds.