Matching funds are contributions that match those from another sponsor or donor, commonly used in federal elections and charitable groups. They can attract more donors and are often limited to a maximum amount to prevent donors from withdrawing. Matching funds are also used by organizations such as the National Endowment for the Humanities and in US presidential elections.
Matching funds are contributions to a project or organization that match contributions from another sponsor or donor. The two main applications of matching funds systems are federal elections in some regions and charitable groups around the world. Matching funds allow a portion of donations to be duplicated by the matching contributor, and can be a great way to get more people involved in a charitable or nonprofit cause.
Many charities will look for donors, foundations, or companies that are willing to match funds for a charitable campaign or event. Generally, these funds are applied only up to a maximum, such as matching contributions of up to $5,000 United States Dollars (USD). This limits the possibility that a company or donor may have to withdraw from a matching agreement because the fund they are required to match has grown beyond their means. Having a maximum match amount lessens the chance that donors will be scared off by a successful campaign and instead be able to make a matching contribution within their means.
Programs that take advantage of matching funds may be more successful in attracting donors. Since donors are guaranteed that their donation will indeed double with the corresponding pledge, they may be more enthusiastic about giving. Those inclined to give even small amounts to charity may be happier to give their $20 to a group knowing that people willing to match will turn it into $40.
There are many organizations that specialize in matching donations, including some government programs designed to address certain causes. The National Endowment for the Humanities in the United States provides grants and support for projects based in the humanities, often through matching contributions. To apply for these grants, applicants often must submit lengthy proposals outlining how the money will be spent and why it should be awarded.
In presidential elections, the United States government provides matching contributions to certain candidates. To qualify, the candidate must raise at least $5,000 USD in 20 states. In a general election, a lower subsidy is allowed for eligible third-party candidates, who receive matching donations in proportion to the percentage of the vote they won in the primary election. In addition, candidates must agree to campaign spending limits, including personal spending. Candidates can opt out of the process if they wish, allowing them to pursue a campaign without spending limits. Federal matching funds allow you to match up to $250 USD of each individual contribution.
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