When Are Grants Worth It — and How Founders Can Make Them Pay Off

Lessons from Enduring Planet & Friends’ January 2026 Community Event

At Enduring Planet & Friends’ recent community event, “When Grants Are Worth It & How to Make Admin Actually Pay Off,” over 170 founders, investors, operators, and service providers gathered to unpack a more useful question than whether grants are good or bad. The real question is how founders can actively make grants worth the squeeze.

Moderated by Hannah Friedman, the panel brought together perspectives across the grant lifecycle: Erin Davis (operations and cash flow), Joel Armin-Hoiland (grant strategy), Morgan Babbs (founder execution), and Elke Trilla (legal and compliance).

What emerged was a clear takeaway: grants don’t fail founders — misalignment and poor preparation do.

2026 is a new grant environment: Different, not necessarily “harder”

After a “wait and see” 2025, new Federal grant opportunities are emerging in 2026, especially through DoD (Department of War) and programs tied to critical minerals/metals, advanced manufacturing, nuclear, and AI applications. At the same time, DOE rescissions and shifting agency priorities mean founders may need to re-orient projects and pursue a broader mix of federal, state/municipal, international, and private/philanthropic pathways. State, municipal, and county grants are broadly available across the US, in some cases at larger levels than in 2025.

Federal grants are more political, more scrutinized, and less forgiving

The operational implication is important: federal grants are now more politically influenced, more closely scrutinized, and less forgiving of misalignment. Final decisions increasingly sit with political appointees rather than purely technical reviewers, termination and reimbursement rules are stricter, and expectations around outcomes are higher. Founders who succeed in this environment are the ones who adapt their strategy — not just their applications — to reflect this reality with a more deliberate, documented, relationship-driven approach.

“Relationship management” is now a core part of grant execution

Partnership structure plays a major role. Note the importance of building relationships with career civil servants and program staff (especially Program Officers, not just elected officials). These long-tenured program managers provide continuity across administrations and are often the most valuable allies during both application and execution. Clear, proactive, and well-documented communication with them is one of the most underappreciated levers founders control. 

SBIR/STTR: paused, not dead

SBIR/STTR programs are currently paused due to policy negotiations (e.g., addressing “SBIR mills”), but expectations are that these will resume by mid-year with near-zero likelihood of elimination—meaning founders should keep preparing.

Grant ROI is largely determined before you apply

Grant ROI is largely determined before an application is ever submitted. Founders who pursue grants opportunistically — applying broadly or chasing eligibility alone — often find themselves burdened with reporting, compliance, and timelines that don’t meaningfully advance the business.

Grants should be jet-fuel for what you already wanted to achieve with the business anyway

The strongest outcomes come from a more disciplined approach: applying to fewer, higher-value grants with a realistic probability of success, designing projects that align tightly with the technology roadmap and commercialization path, and scoping work in a way that limits downstream administrative drag. 

Project design should be built around work you needed to do anyway, with milestones that advance your roadmap and a scope that’s engineered to minimize ongoing compliance drag. Flexibility is also a design feature: you want enough room to adapt without triggering renegotiations or change orders that stall the project.

In practice, this means treating grants more like enterprise sales than lottery tickets: qualifying opportunities carefully, understanding timelines, and allocating effort only where the return justifies the cost.

When evaluating strategic fit, experienced grant consultants like Climate Finance Solutions can be worth the cost when they improve win rates, compress timelines, and help you anticipate compliance issues before they become expensive surprises.

Structure matters: prime vs subrecipient, fiscal sponsors, indirect rates

Similarly, decisions around being a prime recipient versus a subrecipient — or engaging a fiscal sponsor — should be made strategically, not out of a desire to avoid paperwork. Founders should understand key roles and definitions:

• Prime (full compliance responsibility) vs Subrecipient (narrower scope under a prime) vs Fiscal sponsors (nonprofit fiduciaries who support with compliance)
• NOFO (Notice of Funding Opportunity) and FOA (Funding Opportunity Announcement) requirements and evaluation criteria must be read closely

Don’t default into subrecipient status just to “avoid admin.” Choose roles based on eligibility, project design, strategic positioning, and capacity, not convenience. For some private/philanthropic opportunities, fiscal sponsors can unlock access. Indirect cost rates can materially improve sustainability by recovering overhead.

Once awarded, execution requires systems

Once a grant is awarded, execution becomes an operating function, not a side project. Many delays attributed to “the government” are actually caused by weak internal systems — late submissions, incomplete documentation, or inconsistent cost tracking.

Strong grant execution rests on three pillars: technical reporting, financial reporting, and effort/time reporting. You can’t ignore any one of them. While not every team needs enterprise-grade grant software on day one, spreadsheets alone rarely scale. Repeatable processes, clean attribution, and reliable tracking systems are what ultimately keep cash flowing and compliance manageable.

Additionally, ownership must be explicit: Consultants may help pre-award, but after award, internal operators have to run the project. Grants carry real legal and financial responsibility, and the companies that do best treat them with that level of seriousness. When something needs to change, the right move is rarely “ask forgiveness later.” Engage your program officer early and keep communication clean and documented.

The biggest risk: cash-flow timing, not whether you’ll “win” the grant

Cash-flow planning is critical: Founders must plan for 60–90+ day reimbursement delays (often longer), integrate grant timing into forecasts, and maintain working-capital buffers. Don’t fund core operations assuming grant cash arrives on schedule, and don’t expect equity investors to solve grant timing problems. 

Grants themselves can often also have diversification. International grants, such as those supporting cross-border collaboration, continue to operate with relative stability. Private and philanthropic grants, while structurally different from federal programs and often requiring fiscal sponsors, can complement public funding when aligned with mission and impact goals. Consider the timing of various grant sources.

Grants are most powerful as part of the capital stack

Grants should not be evaluated in isolation. Their real value shows up when they’re intentionally integrated into the capital stack. Best practice is to use grants to:

• de-risk technical and market milestones
• lower the blended cost of capital and preserve dilution
• create credibility with agencies, partners, and customers
• complement other instruments (debt for assets/CapEx, equity for growth)

Used well, non-dilutive funding lowers the blended cost of capital by reducing equity dilution, preserving ownership for later stages, and making subsequent financing conversations easier.

Critically, grants should never become a company’s primary revenue source. One example shared highlighted using debt to finance infrastructure, grants to subsidize services in underserved markets, and equity only where it truly accelerated scale — a disciplined approach that maximized flexibility and long-term ownership.