When you rub the balloon on a coarse surface, you give the balloon additional electrons, generating a negative static charge. Meanwhile, the match, delicately balancing inside of the cup, has a neutral charge.

When an object has a negative charge, it will repel the electrons of other objects and attract that object’s protons. When the neutrally charged object is light enough, like the match in this case, the negatively charged object will attract the lightweight object. But try attracting a match while it’s laying on a table… it doesn’t work! You need to reduce the amount of other forces acting on the match for this experiment to work, and that’s why you balance the match on the rim of a nickel. Balancing the match enables less surface area to be directly effected by friction, which enables the match to rotate more freely.

[Source: Steve Spangler Science | Via UD]