Co-op or MDF: what's the difference?

What is the difference between co-op and MDF?

The clearest definition I've found is from Channel Futures, in 2014, and it still holds. Co-op funds accrue, usually as a percentage of a partner's sales or another performance measure. MDF is directed to partners ahead of sales, and it's discretionary: the vendor awards it on the behaviour it expects.¹

Put simply, co-op rewards partners who already sell. MDF is a bet on a plan, and the vendor decides who gets it.

The names blur in real programs. AWS allocates its MDF based on your Partner Path progress, your Specializations and the programs you're in, so it behaves partly like earned money.² Always read the program guide before you trust the label.

How do you earn co-op funds?

Microsoft is the clearest example. In its incentive programs, your earnings are split between a rebate and co-op, for example 60% rebate and 40% co-op. You get the rebate on the program's normal payout schedule. Microsoft holds the co-op part for you.³

Co-op runs on six-month periods. Earnings accrue during one earning period, you use them over the next six months, and you claim them in a separate claiming window. In Microsoft's own example, money earned from July to December is used from January to June and claimed between February 16 and August 15.³

Miss the usage period and you forfeit what you earned.³ There's also a floor. If your co-op earnings for a period stay under Microsoft's threshold, they become a rebate at the end of the semester.³

What co-op pays for: marketing that builds awareness of Microsoft products and grows your pipeline, plus readiness work such as specializations and certifications.³

How do you claim co-op?

In Partner Center. You need the Incentives admin or Incentives user role, and your bank and tax details have to be set up before your first claim.⁴

1. 1Create the claim: pick the location and the usage period.
2. 2Upload one of two documents, a third-party invoice or a Certification Service Report.
3. 3Enter the execution date. It has to fall between the campaign's start and end dates.
4. 4Add the pre-approval ID if Microsoft approved your marketing materials ahead of time.
5. 5Submit. After that you can't edit the claim unless a reviewer asks for more information.

Microsoft says it finishes its review before the last day of the month after you submit your proof of execution.⁵ Keep the original documents for 24 months after the activity date, because Microsoft can ask for them.³

How do you get MDF?

You ask for it, with a plan. I'll use AWS as the example. Its MDF helps offset marketing costs that drive demand and pipeline, paid in cash or in AWS Promotional Credits.⁶

Before anything else, you need an AWS Payee Central account. AWS won't take an MDF request without one.⁶ Then look at the Create fund request button in Partner Central. If it's greyed out, your account isn't eligible yet, because of your Partner Path status or because you have no MDF wallet.⁷

For cash MDF, AWS co-funds up to 50 percent of completed eligible activities. The activities it names include email, telemarketing, display and search advertising, paid social, and customer webinars and events.²

The request then goes through business approval and finance approval. Once it reaches pre-approval, you can run the activity.⁸ The MDF request guide covers how to write one AWS approves.

How do you claim MDF?

After the activity. You submit your actuals and AWS reviews them. Once they're approved, Partner Central gives you a link to send your invoice through Payee Central.⁸

Claims are due within 30 days after the activity's completion date, or by December 15 of the year of the request.⁹ You can extend a request once, by up to 90 days, before it expires. The new end date can't fall between December 16 and January 1, and MDF can't cross into the next year.⁹

One small thing that costs people days: a spreadsheet with formulas can get quarantined. Send proof as PDF.⁸

Why do partners leave co-op and MDF unclaimed?

Back in 2014, Channel Futures blamed vendors first: the funds were poorly promoted to partners, and disbursement and reimbursement were too cumbersome. It also found that many partners simply didn't know how to spend the money.¹

Twelve years later, the gap is measurement. In Omdia research reported by Channel Dive in July 2026, over 40% of partners weren't sure which MDF activity had the greatest impact. More than half said vendors didn't provide enough marketing resources.¹⁰

What I do: plan the claim on the day I plan the activity. Who collects the proof, in which format, by which date. Then I count the pipeline, so next year's request has a number in it.

If this is all new to you, start with what channel marketing is.