Grantors sometimes ask grantees to provide matching funds in order to make a project successful without full project funding by the grantor. And sometimes grantors will allow matching funds to be a mix of cash and in-kind contributions.
There are several possible reasons why matching funds may be required. First, the requirement means that the company receiving a grant has “skin in the game” and is therefore more motivated to make the project successful. Second, some grantors need to report that their grant money is “leveraged” by private resources. This is often important to the ultimate sources of funding, which may be government legislators or individual funders. Third, a grantor may want to achieve goals for projects that they alone are not able to fund. Matching funds are the only way to achieve such goals.
As with many other grant details, matching fund details need to be well understood. For example, state grants from one agency may not accept grants from another state agency as matching funds, but they might accept federal grants. And in-kind contributions usually cannot be “double counted” across multiple different grants.