How CFS Helps Applicants and Awardees Navigate the Challenges of Federal Funding

Federal funding plays a major role in supporting public services, infrastructure, economic development, health care, education, transportation, and other priority investments. A recent report from the Pew Charitable Trust shows that in FY2023, federal funds accounted for 36% of total state revenue, making them one of the most significant sources of public funding in the country. The study also found that the federal share of state revenue varied widely, ranging from 24.1% in Hawaii to 50.1% in Louisiana, with federal funds serving as the largest source of revenue in 13 states. 

That variability reinforces a broader point for applicants and recipients: every organization has a different level of federal funding exposure. While federal funding creates opportunity, it also creates risk for awardees that are not prepared to manage the full lifecycle of federal funding. 

Moving away from a deadline-driven approach and toward a lifecycle approach will allow you to assess that exposure and develop a plan should a worst-case scenario unfold. Rather than treating an application as a standalone task, CFS encourages analyzing the full funding path from opportunity identification to award implementation through program sustainability. This approach ensures that applicants are positioned to submit a high-quality proposal and, if funded, are better prepared to manage the award.

 

THE CHALLENGES 

For many federal applicants and recipients, the challenge often lies in managing the full complexity of pursuing and administering funding. It often results in a “dog that caught the car” scenario: an applicant finally secures a major award, only to realize it is unprepared to manage the funding or move the project forward. Pew’s report identifies several recurring themes that reflect what many organizations face when developing a strategy to pursue funding programs:

 

Challenge 1: “Federal Funding Levels Are Difficult to Project”

Federal funding streams are fragmented across agencies, programs, and timelines, making it difficult for organizations to determine where to focus their time and resources. Applicants and recipients must also monitor NOFO releases, agency guidance, appropriations activity, program updates, deadlines, and compliance requirements, and federal funding conditions can shift throughout the funding lifecycle. Evaluating these factors together to maintain strategic alignment requires significantly more time and coordination than many organizations initially anticipate.

Additionally, there is current uncertainty in the funding itself. Awards may be delayed, reduced, partially funded, or not renewed, which can leave organizations responsible for covering costs or scaling back planned activities. Pew's report emphasizes the importance of distinguishing between recurring and nonrecurring federal funds and planning for multiple funding scenarios. Tennessee, for example, requires agencies to consider the effects of federal funding reductions of 5%, 25%, and 100%. Most applicants will not need a contingency process at that scale, but they should still understand how their project would be affected if funding is delayed, reduced, only partially awarded, or discontinued, and identify the necessary adjustments in each scenario.

 

Challenge 2: “Applying for and Managing Federal Grants Is Complicated”

To win and manage a federal award, significant effort is needed to submit a competitive application and to establish the capacity to execute the award if selected. Applicants are often at a disadvantage when they begin project development only after a NOFO is released. Application windows may be too short to fully define scope, gather data, confirm budget assumptions, and obtain internal approvals. These challenges often continue after an award is made. Recipients must coordinate staff, systems, partners, and internal departments while managing award terms, procurement, documentation, budget tracking, reporting deadlines, and closeout requirements. Although these demands can be especially difficult for smaller or lower-capacity applicants, organizations of any size may struggle when a project lacks the structure, communication, and shared accountability needed to move effectively from application to implementation. These obligations can create financial risk when an organization must commit its own resources upfront, absorb unallowable or unreimbursed costs, or continue project activities, uncertain that all anticipated funding will be available.

 

Challenge 3: “It Is Difficult to Strategically Direct Federal Funds to Key State Priorities”

When funding decisions are made in isolation, without coordination across departments, leadership, and partners, the result is often a fragmented portfolio of awards that creates administrative burden without building toward longer-term goals. This challenge is compounded when internal departments operate independently throughout the grant lifecycle. If roles and responsibilities are not fully developed before an opportunity is released, organizations may unintentionally build operational silos and compliance risks into the proposal itself. Finance, program, legal, and leadership teams may each have critical roles in a federal award but engage at different times and with different information, leading to misaligned expectations, duplicated effort, and gaps in accountability.

Match requirements present a specific coordination challenge: committing noncash or in-kind resources across departments or partners requires advance planning and internal agreement that many organizations do not establish until after an award is made. Pew's report notes that applying for federal grants without appropriate interagency coordination can lead to misalignment, with resources being directed toward programs that are not the best fit for the organization's priorities or capacity.

For applicants, the parallel risk is pursuing available funding rather than aligned funding. A project may be eligible under an NOFO but still not be the right pursuit if the timeline is unrealistic, the match requirement is too burdensome, the project is not fully developed, or the organization does not have the capacity to manage the award. A proactive strategy that identifies organizational priorities first, then matches funding to those priorities, produces a stronger, more sustainable funding position than one driven primarily by what is open for application.

 

5 WAYS CFS RESOLVES THESE CHALLENGES 

1. Identify the Right Opportunities, Not Just More Opportunities:

CFS evaluates opportunities strategically by considering eligibility, competitiveness, funder priorities, project readiness, level of effort, budget fit, match requirements, and implementation needs. This helps clients avoid pursuing funding that is available but not well aligned. CFS also tracks relevant opportunities, policy developments, and program changes so clients can anticipate shifting priorities, deadlines, and risks to current or future pursuits.

 

2. Build a Funding-Ready Project Pipeline:

CFS develops and refines funding-ready project pipelines so they are better prepared when aligned opportunities open. A strong project pipeline allows clients to respond more strategically to funding opportunities. Instead of starting from scratch, clients can match pre-vetted projects to programs that align with their goals, needs, and capacity. This also helps reduce reactive decision-making. When federal funding levels, timelines, and program requirements are difficult to predict, a project pipeline gives organizations a stronger foundation for adapting to new opportunities as they arise. 

 

3. Strengthen Application Readiness:

CFS brings structure to the application process by developing schedules, identifying required materials, coordinating key inputs, organizing narratives, aligning budgets, tracking deadlines, and responding to NOFO requirements. CFS also coordinates across internal teams and external partners, including leadership, program, finance, technical, community, subrecipient, and consultant stakeholders, to build realistic proposals that reflect what clients can deliver and reduce unexpected implementation commitments after award.

 

4. Evaluate Financial Risk and Sustainability:

CFS helps clients identify financial and sustainability considerations before submission. Through application planning and project management, CFS works with clients to understand what the opportunity requires, what commitments may need to be made, and what risks should be discussed internally before the application moves forward. This includes helping clients articulate what will happen after the award period, what costs may continue, whether future funding sources are realistic, and whether the project can be scaled, sustained, or responsibly closed out. Post-award, CFS assists clients in maintaining compliance from implementation to closeout, while planning for additional funding streams to sustain initiatives. 

 

5. Prepare for and Support Post-Award Responsibilities:

CFS helps clients plan for post-award responsibilities by identifying reporting requirements, implementation milestones, budget commitments, documentation needs, and compliance considerations that may affect project delivery. CFS’s award administration support brings clarity to the post-award phase by organizing requirements and reporting timelines, supporting project coordination, and maintaining visibility into key award responsibilities. This helps reduce the risk of winning funding without a clear plan for what comes next. 

 

For award recipients, the key takeaway is that federal funding success truly depends on whether the organization can manage the award, comply with requirements, deliver the project, and sustain the impact after the funding period ends. CFS helps clients address these challenges by bringing strategy, structure, coordination, and lifecycle thinking to the funding process. From identifying aligned opportunities and building competitive applications to preparing implementation and post-award responsibilities, CFS helps clients pursue federal funding with greater clarity and readiness.