The benefit of foundation matching grants is that they provide greater incentive leverage when a nonprofit is fundraising from its constituency.
On the other side, foundations who give matching grants receive assurance of the nonprofit's capacity to raise adequate funds.
Some companies facilitate the process, allowing employers to match the gifts of more than 18 million individual employees across the United States.
In 1954, the General Electric Foundation created the Corporate Alumni Program to match donations to the colleges and universities from which its employees had graduated.
In some cases, borrowed money may be used to meet criteria for a matching grant; the $550 million Canadian federal government investment to connect a Detroit River International Crossing to Interstate 75 in Michigan qualified the state for US$2 billion in US federal matching grants that could rebuild other Michigan highways even though the Canadian money was nominally a loan, to be repaid by tolls on the new bridge.
[11] That usually applies to the two main parties; as in order for a candidate to gain the benefits of matching funds, they must raise $5,000 from 20 states during the primaries or have received 5% of the popular vote in the general election.
Former New Mexico Governor Gary Johnson, the Libertarian Party candidate for president, qualified for federal matching funds in the 2012 US presidential election.
[13] Prior to a 2011 Supreme Court decision, states like Arizona, Maine, New Mexico, North Carolina, and Wisconsin were using a system that distributed "additional funding to publicly financed candidates when they face big-spending opponents or opposition groups".
[14] The combined cases, Arizona Free Enterprise Fund v. Bennett (2011) and McComish v. Bennett (2011), held that "the law impermissibly forces private candidates and independent political organizations to either restrain their spending or risk triggering matching funds to their publicly financed opponents".
Finally, besides diluting the power of major givers, these programs led candidates to reach out and engage a more representative set of constituents during fundraising.
For example, "after implementing the public matching funds program in NYC, [the] most recent mayoral election of 2009 witnessed the lowest voter turnout it's had since the 1960s".
[20] Others argue that the matching funds system benefits candidates with higher name recognition, especially if they are tied to a measure of popular support.