Some programmes, such as Building Better Opportunities, have already been match funded. However, the majority of the remaining ESIF programmes have not been match funded by another organisation and bidding organisations must provide the match.
The European Social Fund (ESF) match funding rate is based on the region’s development category. The Leicester and Leicestershire region is more developed and therefore all programmes will require a 50:50 funding ratio (50% ESF funding and 50% match funding). ESF programmes will promote the programme at the total value of the project and bidding organisations will have to find half of this money.
For example, if a programme is worth £1,000,000 an organisation will receive £500,000 from ESF and they will have to make up the other £500,000 ready for the start of the project.
Match funding is treated the same as ESF funding, so the total eligible expenditure must be used for the agreed purposes and evidenced in the claim forms.
This guide will provide you with definitions and examples of the types of match funding you can use, how to incorporate the match funding in your financial tables and how to prove that the match funding is available.
In cash match funding, you provide the money to meet the match funding requirements yourself. For example, ESF will give you £500,000 of the total programme cost and your organisation will provide the other £500,000 in cash. There are two ways of raising this cash:
Revenue/Capital Match Funding
Match funding can come from money built up in reserves or made through trading. This money must be available at the start date of the project and evidence of it must be provided with the full application. The money must also be ring-fenced so that it is available throughout the life of the project.
If you receive funding from a public body, such as councils or trusts, you may use this as your match finding. You must have approval from the funders that the money may be used in this way. The managing authority will want to see evidence that the money has been awarded to your organisation and that it is available from the start of the project.
In some programmes “in kind” match finding may be used. This could be matching staff time or volunteer time. For all in kind match funding, please read the programme specification and guidance to see what types, if any, can be used.
You may use the time that someone works on the project as match funding. For example, if a member of staff is working for 35 hours a week on the project you may only claim for 17.5 hours of the time working on the project and the other half of their salary would be paid by the organisation. The staff member would have to spend all 35 hours on the project.
Previous experience of using volunteer time as match funding has proved too difficult for some organisations due to the amount of monitoring needed to demonstrate the value of volunteer time and that the work they are doing is solely for the ESF project. Therefore, any volunteer time that is used as match funding must be agreed by the managing authority and bidding organisations must also provide a 10% cash match. If using volunteers as a match fund, make sure that volunteer time is based on the theoretical value of the tasks performed by the volunteer. The Volunteer Investment Value Audit (VIVA) is a good resource for calculating the cost of volunteer time and can be used as evidence of match funding when submitting an application form.
A full audit trail will be needed for any staff or volunteer time used for match funding. This will include dated timesheets with a full description of the work carried out. Only the hours worked/volunteered can be claimed. If claiming for staff time proof of BACS and bank statements will be needed to show the wages have been paid.
Limits of Match Funding
Although there many ways that organisations can raise the match funding there are certain areas that cannot be used as match funding.
For ESF funding you cannot use any value of a building or land as a match fund, including donated space. You must cost out all room hire or building costs in your indirect costs unless exclusively used for the project, before rents can be used in direct project costs.
Charging for services
If in your project plan includes delivering services that other organisations may pay for, you cannot claim for half from the ESF budget and charge the other half as retrospective match fund. Match funding can come from previous surpluses made from charging for services and must be available to use at the start of the project.
Proof of match funding
All match funding promised to a project must be evidenced when submitting the application. If you are providing any form of cash match funding, bank statements and contracts will need to be provided along with a signed letter from your CEO or Chair that the money will be ring-fenced for the duration of the project.
If you are providing in kind match funding you will need to provide proof of job/volunteer descriptions, timesheets, and evidence that you are able to pay salaries.