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Market Development Cooperator Program
Matching Funds
Cash, In-Kind, and Federal Share
| Example 1 | Federal share | Cooperator Match |
|---|---|---|
| Cash | $300,000 | $300,000 |
| Cash or in-kind | $300,000 | |
| Total | $300,000 | $600,000 |
Each dollar of federal funding requested must be matched on a 2-to-1 basis. The applicant must put up the first dollar of match. The second dollar of the match may be in-kind contribution by the applicant or it may be contributed by other organizations.
The match provided by the applicant must include at least one dollar of cash outlays for the project for each federal dollar requested. The balance of the applicant's support may consist of in-kind contributions, as noted above, or cash.
For example, an applicant requesting $300,000 of federal funds must supply, at a minimum, $300,000 of cash contribution. As illustrated in Example 1 to the right, the remaining $300,000 of the required match can be made up of additional cash or in-kind contributions.
In Example 1 the federal share is the maximum 33.33% because the MDCP award is $300,000 and the match is $600,000 for a total project cost of $900,000. This means that each time this cooperator reports its total project expenditures in its reimbursement requests through Grants Online, the Department of Commerce will reimburse the cooperator 33.33% of that amount. The reimbursement request should be made based on total project-related resources (cash and in-kind) expended in the period since the cooperator's previous reimbursement request.
Include Indirect Costs in Match
Every cooperator receives a 10% indirect cost rate. Use this rate to ensure that you account for indirect costs that you will incur as part of your project. Include indirect costs in your budget following the example to the right.
First, calculate your direct costs. Then apply the indirect cost rate to the total direct costs. Take the amount that results and include it as part of your cash match.
| Federal Share |
Cash | In Kind (or cash) |
Total | |
|---|---|---|---|---|
| Total Direct Costs | $300,000 | $218,182 | $300,000 | $818,182 |
| Indirect Costs at 10% of Direct Costs | $81,818 | $81,818 | ||
| Total | $300,000 | $300,000 | $300,000 | $900,000 |
Claim Program Income as Cash Match Only if There is Value Added
Need a source of cash match?
Program income expended on project activity may be counted as cash match if it represents value added by the cooperator for project activity. For example, a cooperator could claim as program income fees paid to it by the prospective exporter for technical seminar participation if these fees are paid in recognition of the value added by the cooperator's project. In this example, the value could be evident in the technical-seminar participation package that the cooperator creates. This might include organizing pre-seminar training, finding optimal hotel accommodations, securing group airfare, meeting with seminar organizers beforehand, and organizing a reception. Such a cooperator package helps determine project success.
Buy-in by participating U.S. firms
When companies seeking to export pay fees for such a package to the cooperator, they are doing more than getting themselves to a technical seminar; they are agreeing that the project itself has value. Because the cooperator's package adds value and furthers project goals, the cooperator could charge fees, use the fees to pay for the project package, and claim the fees paid as cash match. Payment by a prospective exporter to a cooperator may only be claimed as program income and cash match if the payment is for a project participation package created by or facilitated by the cooperator.
Cannot count expenses incurred by participating firms
If it is a prospective exporter participating in your project that makes the arrangements, then the cooperator has not added value that the exporter is paying for and the cooperator cannot claim any program income.
Example
This can be illustrated in the example of a prospective exporter that attends a technical seminar as part of a cooperator's project. If the prospective exporter negotiates amounts for its own arrangements with vendors, pays the total amount to the cooperator, then has the cooperator pay the amount to the vendors, the cooperator has not added value that the exporter is paying for. Except for the final payment to vendors, it is the prospective exporter, not the cooperator that has made all of the arrangements. The prospective exporter's payment to the cooperator is not in recognition of any value that the cooperator had added with its project. Accordingly, it could not be claimed as program income. When structuring participation packages designed to elicit program income an applicant may include expenses that a prospective exporter might otherwise arrange and pay by itself. Common examples include hotel accommodations and exhibition hall booth rental. By grouping such expenses together, negotiating more favorable group rates, and adding additional activities that a prospective exporter is unlikely to arrange on its own, the cooperator adds value. The prospective exporter's payment to the cooperator for the full amount of the participation package recognizes this value. Accordingly, it is program income to be counted as cash match.
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