Often, an energy or infrastructure project will be higher in cost than what a single grant can cover. Stacking resources is the practice of combining multiple resources to support a single project or initiative. This can also be referred to as braiding or blending resources.
Federal and state agencies are always interested in understanding whether your project, if funded, would bring in additional dollars from public, private, and/or philanthropic sources. This is considered leveraging resources – in other words, cash and other non-monetary resources that are included or pulled into a project as a result of an initial investment or award.
What Counts as Leveraged Resources?
Many federal grants require “leveraged resources” – often in the form of a cash match or direct cost share. However, in-kind resources also count as leverage (though not often for meeting cost share requirements) and can range from technical assistance received, staff time, pro bono services, and printed materials – of your organization and any partners. Note that while you can use a federal grant to leverage additional federal funding, you rarely can match federal funding with other federal dollars.
Even More Options with the Inflation Reduction Act
Since the Inflation Reduction Act passed, tax-exempt entities have even more options for stacking and leveraging resources. Beyond federal grants and loans, consider whether new technical assistance programs and tax credits (captured through Direct Pay) can advance a project. For instance, a city applying for a planning grant for a solar project may flag in its application that it intends to leverage the investment tax credit to support project construction. Clean energy tax credits are but one example. Other incentives exist at the federal, state, and local levels that may help advance your project, including Opportunity Zones, Enterprise Zones, historic preservation tax credits, low-interest loan programs for municipal energy projects, and projected revenue from site leases.
When in Doubt, Think Expansively
Whether resources are required for a grant or offer a competitive boost, thinking expansively about how you can stack and leverage resources supports not only your grant application, but your project’s financial viability long-term. Note: tax credits and other reimbursable grant programs funds will be received after the project is put in service. Therefore, you must plan to initially cover the project upfront with loans or other funding before receiving the credit or reimbursement.