A 50% grant doesn't mean half the bill. Here's what you'll actually pay.

The short answer: a co-contribution, often called matched funding, is the share of the project you pay for yourself when a grant only covers part of it. Many Australian grants ask for one, set as a percentage or a ratio such as dollar for dollar. It's usually worked out on eligible costs, so with excluded costs on top you can end up paying well over half the project. Your guidelines will say whether you need one, how much, and what counts.

Finding a grant that offers "up to 50 per cent" can feel like the project is half paid for. It often isn't, and the gap usually shows up late, when you're finalising the budget or signing the agreement. Working out your real share early takes the pressure off and tells you whether the project is affordable at all.

1. What a co-contribution is, and whether you need one

A co-contribution is money or support you put into the project alongside the grant. Funders use different names for it: co-contribution, matched funding, applicant contribution or your share. They all mean the same thing: the funder pays part, you pay the rest.

Whether you need one depends entirely on the program. Some grants, often small community grants, don't ask for any contribution. Others make it an eligibility requirement. The federal Industry Growth Program guidelines, for example, state plainly that you're "required to contribute" to the project.

Look for a section in your guidelines called "grant amount", "funding" or "co-contribution". If there's a required contribution and you can't meet it, your application may not be considered at all.

2. How ratios and percentages work

Funders express the contribution in a few different ways. Three real examples show the range:

• A percentage of eligible costs. The Industry Growth Program's Early-Stage Commercialisation grant pays up to 50 per cent of eligible expenditure, and treats the remaining eligible costs as your contribution.
• Dollar for dollar (1:1). The City of Whittlesea's B2B Grant Program offers up to $10,000, and the business must match the funding dollar for dollar.
• A smaller ratio. Strathbogie Shire Council's grant budget guide says its Event Grants need a minimum contribution of $1 for every $5 of grant funds. On a $5,000 event grant, that's at least $1,000 from you.

A 50 per cent grant and a 1:1 match work out the same on eligible costs: for every grant dollar, you put in a dollar. A "minimum" contribution is a floor, not a target. Some programs may let you contribute more, so check whether that affects how your application is assessed.

3. It's calculated on eligible costs, not the whole project

This is where most of the surprise comes from. When a grant pays a percentage, it's usually a percentage of eligible costs, the costs the program allows. Anything excluded is yours to pay in full, on top of your matched share.

Here's how that works in our fictional worked example, where the grant funds 50 per cent of eligible expenditure:

The grant is "50 per cent", but the business funds $18,000 of a $30,000 project, which is 60 per cent. Its matched share is $12,000 and the excluded costs add another $6,000.

Caps can widen the gap further. If a program has a maximum grant amount and your eligible costs are large, the percentage stops applying at the cap. The Industry Growth Program also notes that if you incur extra costs, you must meet them yourself, so cost overruns land on you too.

GrantAlly separates your costs into eligible, excluded and unresolved against the program's rules, then works through the funding percentage, cap and your contribution, so you can see what you'll need to fund before you apply. See project budgets.

4. Cash and in-kind contributions

Your share can sometimes include in-kind contributions: non-cash support such as volunteer time, donated materials, or equipment and space you already own. Rules vary a lot, so check before you count them.

• The Industry Growth Program accepts cash or eligible in-kind contributions, but caps in-kind at 10 per cent of eligible project expenditure. It also says that if in-kind values look out of line with market rates, it may ask you to put in more cash.
• Strathbogie Shire Council accepts cash and in-kind for its contributions, and values volunteer time at $40 an hour for general help and $80 an hour for specialist work, such as a tradesperson's.
• Some programs, especially business grants with a dollar-for-dollar match, may expect a cash contribution. If the guidelines don't say, ask.

Whatever you include, use the funder's valuation method and keep a note of how you got each figure. Even where a program accepts in-kind support, it's usually only part of the answer: the cash still has to come from somewhere.

5. Can another grant pay your share?

Sometimes, but often not. Programs take different positions:

• The Industry Growth Program says your contribution can't come from other Commonwealth, State, Territory or local government grants.
• Strathbogie Shire Council's guide lets you list other income in your budget, but only money that's confirmed. It says you can't include projected income, such as ticket sales, or an external grant that hasn't been confirmed.

So check two things: whether other government funding is allowed to count towards your share, and whether it has to be confirmed at the time you apply. Many programs also exclude costs that are already funded from another source, so be careful not to claim the same cost twice.

6. Evidence you may need to provide

Funders want to know you can pay your share, because a project that runs out of money halfway helps no one. Depending on the program, you may be asked for:

• a bank statement or loan agreement showing the funds are available
• a funding strategy explaining where your share will come from
• a declaration from your accountant confirming you can fund the project
• letters from partners or sponsors confirming any cash or in-kind support they've promised
• quotes showing what the costs are based on.

The Industry Growth Program, for example, asks for evidence such as a bank statement or loan agreement, and an accountant declaration that confirms your ability to fund the project. Strathbogie Shire Council asks for a quote or similar evidence for planned spending. Smaller programs may ask for less, but the principle is the same: only count money you can show you have.

7. Plan your cash flow, not only your budget

A budget shows who pays what in total. Cash flow shows when the money actually moves, and that's often the harder part. Many grants don't pay the full amount upfront:

• The City of Whittlesea says its B2B grant is paid after the project is completed.
• The Industry Growth Program pays according to a schedule in the grant agreement, and only after it receives satisfactory progress reports with evidence of spending.

In practice, that can mean paying suppliers for the whole project, including the funder's share, and waiting weeks or months to be reimbursed. Before you apply, map out when each cost falls due and when each grant payment is expected. If there's a gap, work out how you'll cover it: savings, an overdraft, staged purchasing or supplier payment terms. Your accountant can help you test whether it's realistic.

8. If you can't fund your share

It's better to find this out now than after you've signed an agreement. A few options to consider:

• Reduce the scope to a smaller, self-contained stage you can afford, if the guidelines allow it.
• Look for a program with a lower contribution, such as a smaller ratio or none at all.
• Line up confirmed funding first, such as a loan or a partner's commitment, then apply in a later round.
• Talk to the program contact about whether in-kind support or staged payments could help.

Don't overstate what you can contribute to make the application look stronger. If you can't fund your share, the project may stall, and you'll still have obligations under your grant agreement.

Frequently asked questions

Is matched funding the same as a co-contribution?

Mostly, yes. Both describe the share of the project you fund yourself. Matched funding usually means a set ratio, such as dollar for dollar, while co-contribution is a broader term. Your guidelines define what they mean by it.

Does a 50 per cent grant mean I pay half?

Not always. The percentage usually applies to eligible costs only, so you pay your half of those plus all of the excluded costs. In our fictional example, a 50 per cent grant still leaves the business paying 60 per cent of the project.

Can volunteer time count as my contribution?

In some programs, yes. Many community grants accept in-kind contributions such as volunteer time at set hourly rates, while some business grants cap in-kind support or expect cash. Check what your program allows and how it values in-kind support.

Can I use a loan to fund my share?

Often, yes, as long as the money is confirmed. Some programs ask for a loan agreement or bank statement as evidence. Check whether your guidelines restrict where your contribution can come from, and talk to your accountant about whether the repayments are manageable.