Government capacity helps explain variance in public sector organizations’ performance, and measuring capacity helps identify deficiencies that may be addressed in order to improve the efficiency and effectiveness of these organizations. This study examines the capacity of regional economic development districts to leverage federal grant funds in the counties they serve, controlling for additional sources of potential capacity and demand for federal grants. A decade of data reflecting federal grant funding to counties in one state was compiled from the Federal Awards Data System and analyzed using pooled cross-sectional time-series analysis with panel-corrected standard errors. The results indicate that regional economic development districts demonstrate varied but significant capacity to leverage federal grant funds in the counties they serve. The results suggest that similarity in the purpose and structure of regional economic development districts within a state are not enough; we need to better understand the resources within the organization and the mission that determines how those resources are applied.