Over the next 10 years, an unprecedented amount of federal funding will be directed at spurring the clean energy transition and securing U.S. independence in high tech manufacturing and critical materials. These opportunities will be highly relevant to a variety of organizations, but federal funding comes with some unique requirements. Below are five factors to consider when deciding if federal funding is right for your organization.
Pursuing Federal Funding? 5 Factors to Consider
1. Can my organization meet the cost share and/or application fee requirements?
Nearly all federal grants have a cost-sharing requirement, often up to 50% of project costs. Similarly, federal loan programs usually have application fees or facility fees. (This is not true for most funding for tribes.) While these costs may not be large to your organization as a whole, sometimes they come from budget lines that are stretched thin. A thorough understanding of any costs at the outset will help you decide if an opportunity is a fit.
2. Does the award time frame fit my organization’s timeline?
This seems basic but takes many organizations by surprise: pursuing federal funding takes a long time. A grant process typically takes a year from when the application opens until work begins on a project. A loan application can also take up to a year, possibly longer. If you are looking to fund work that cannot wait, federal funding may not be the best fit. Federal funding is best for those with flexible timelines.
3. Is my organization comfortable with the disclosure and intellectual property (IP) terms of the funding agreement?
Government funding involves sharing more information than many companies are accustomed to. Federal research agreements have some IP provisions that some organizations do not find protective enough. Meanwhile, obtaining a federal loan requires a significant amount of disclosure not just about finances, but also about project details.
4. If my organization’s project involves construction, are we prepared to meet federal requirements?
Federal funding for projects involving construction come with specific requirements. The Davis-Bacon Act spells out the local prevailing wage at which workers must be compensated. Build America Buy America requires domestic procurement of certain products like steel. These requirements can increase cost, but the bigger challenge is often planning. For instance, if you pursue a loan after construction has started, you may already have materials on hand that are not compliant with Buy America Build America. Ensuring the proper order of operations will make federal funding smoother.
5. Is my organization able to meet the requirements of the Community Benefit Plan?
Most federal funding now comes with the requirement for a community benefit plan (CBP). For competitive awards, the CBP can comprise around 20% of the award scoring criteria. These are not broad company value statements. They are project-specific and location-specific plans designed to address four main goals:
Community and labor engagement
Investing in job quality and workforce continuity
Advancing diversity, equity, inclusion, and accessibility (DEIA)
Contributing to the Justice40 initiative
CBPs require advance planning and appropriate staffing during the project period.
Preparation is the Key to Success
Federal funding can be transformational for a technology, a facility, and even a company. It can elevate your project, provide connection with the Administration, and even open doors in Congress for future activities. Thinking through these five factors before applying for funding can be the critical detail that sets your organization up for long-term success in the funding process.