How Philanthropists Can Impact $60B+ of Innovation Funding

For nearly 50 years, the U.S. Department of Energy (DOE) has been the engine behind some of the world’s most transformative energy innovations. The technologies that power our modern world—nuclear reactors, solar panels, lithium batteries, even the techniques that unlocked shale oil and gas—were all developed with critical support from DOE and its predecessor agencies.

With DOE reform now dominating headlines and Congress actively debating the department’s future, we see defending DOE’s innovation capacity as a key priority for climate philanthropists, as we described in our January “All In” report. In particular, we want to ensure DOE is equipped to support clean energy demonstration and deployment, not just the R&D traditionally associated with it.

This year, our Climate Fund has made grants to multiple organizations that are working to protect and strengthen DOE’s innovation capacity.

We recently made a grant to the Energy Futures Initiative Foundation (EFIF), an energy policy think tank based out of Washington D.C. They just published a game-changing new report: “Modernizing American Energy Innovation: Five Ways to Re-energize DOE.”

Our investment in this project reflects a broader strategy: using targeted philanthropic support to influence federal energy policy and defend programs essential to America’s clean energy transition.

How Can Philanthropists Affect Big Budgets?

It might seem unrealistic to hope that funding reports can meaningfully impact the U.S. federal energy innovation budget. But there’s strong precedent for how strategic philanthropic funding of policy research can reshape billion-dollar federal programs.

Consider the fact that philanthropically funded research, including work from the EFI Foundation, directly led to the creation of DOE’s Office of Clean Energy Demonstrations (OCED)—a crucial funder of clean energy demonstration projects.

EFIF’s 2019 report with IHS Markit proposed centralizing existing DOE demonstration programs in a new office within the department. This idea built on multiple prior proposals for clean energy demonstration efforts from other nonprofits, such as the BPC’s American Energy Innovation Council. Their proposal became a reality when the 2021 Bipartisan Infrastructure Law established OCED with a five-year, $21B budget.

The OCED example isn't isolated. Philanthropic funding has repeatedly catalyzed major federal energy investments. A more recent example is EFIF's February 2023 “U.S. Hydrogen Demand Action Plan,” which recommended, among other things, the establishment of a demand-side program to support offtake for DOE's Regional Clean Hydrogen Hubs.

This report outlined the foundation for what would later become DOE's $1B Demand-Side Program, which the Department selected EFIF to design and implement in January 2024—another example of how strategic philanthropic support can affect billions in federal investment.

Why Is Defending DOE Capacity an Urgent Priority?

DOE has been the defining driver of American clean energy innovation for nearly 50 years.

The U.S. has committed unprecedented resources to DOE through legislation like the Bipartisan Infrastructure Law (BIL), the Inflation Reduction Act (IRA), and the CHIPS and Science Act. Combined, these laws have allocated nearly $1T for clean energy development and deployment—resources that could dramatically accelerate the global transition away from fossil fuels.

But out of the $61B allocated to DOE through the BIL alone, less than half has been obligated to specific projects, and only about $3B (5%) has actually been spent on the ground. The rest—more than $60B—remains trapped in administrative processes, and risks being lost. Even projects that have signed contracts with DOE are at risk, as evidenced by the nearly $4B worth of projects cancelled by DOE in May.

Figure 1. Flow of BIL Dollars, in Cumulative Totals, Through the DOE Award Pipeline

Source: EFIF. Data from: Outlayed and obligated funds published on the Department of the Treasury’s USASpending.gov and awards and appropriations reported by the White House on the now-archived Invest.gov.

We now stand at a critical moment. Republican senators are aiming for a July 4 deadline for their budget reconciliation bill, where DOE reform is prominent. Changes regarding both DOE’s budget and staffing are on the line. What happens next will have a major impact on the U.S.’s energy innovation capacity and, by extension, global decarbonization outcomes.

Our $550K Grant to EFIF

In May 2025, to help address this challenge, we made a $550,000 grant out of our Climate Fund to EFIF to invest in their ongoing research into DOE’s implementation bottlenecks.

EFIF is led by an exceptionally strong team, including CEO Ernest J. Moniz, 13th U.S. Secretary of Energy. Prior to our grant, they had been self-funding a study with new data on BIL projects affected by the funding freeze and reforms to improve DOE’s award process.

For this project, their team conducted in-depth interviews with 20 developers across 29 states. These developers represent over $9B in awarded funding, accounting for roughly a quarter of all BIL-awarded projects. These interviews revealed critical insights into the challenges of working with DOE and identified practical solutions.

EFIF’s research produced five big recommendations that can help unlock funding for innovation:

1. Build a staff with the skills needed to bolster American competitiveness. Despite increasing responsibilities, DOE’s staff has grown by less than 5% in the past 20 years. The research found critical skill gaps in project development, finance, and commercial execution—capabilities essential for moving beyond research to actual deployment.
2. Deploy underutilized funding tools to maximize the return on investment for taxpayers. DOE has powerful but underutilized authorities like the Other Transactions Authority (OTA) that could streamline funding and create more flexible, commercially-oriented partnerships.
3. Standardize and streamline DOE’s application and award processes to get money flowing. The average time from funding announcement to contract was a staggering 18 months, with some projects taking up to 3 years. Simplifying paperwork, clarifying evaluation criteria, and expediting award processes could accelerate innovation and ensure U.S. competitiveness.
4. Reform the department’s loan programs to boost infrastructure deployment and innovation without increasing deficits. With approximately $368B in loan authority backed by $14B in credit subsidy, the Loan Programs Office (LPO) represents one of DOE's most powerful tools for large-scale project finance. Updates to credit subsidy methodology and project eligibility could unlock billions in additional capital.
5. Harness the power of the DOE National Laboratories to guide technologies to market. EFIF recommends creating a new Office of National Laboratory Policy to better coordinate resources across the 17 National Labs, establishing a culture of entrepreneurship, and expanding programs aimed at fostering regional ecosystems around the labs.

Figure 2. Historical Changes in DOE Staffing Levels, Including Estimated Impact of Deferred Resignation Program

Source: EFIF. Data from: FedScope (DOE staff levels), Christa Marshall, E&E News by Politico (deferred resignation estimates).

EFIF’s research and recommendations help us navigate this key moment. By providing practical suggestions for deployment that align with America’s economic competitiveness, national security, and infrastructure development, this work helps create a pathway for continued progress toward global decarbonization.

This grant is one of several we’ve made to help defend the future of US climate and energy policy. Our grantmaking strategy centers on systematic risk reduction. We fund neglected solutions and opportunities, making bets that can minimize climate damage even if mainstream approaches fall short.

If you want to support more high-leverage work like this, consider donating to our Climate Fund.