We examine the distribution of Federal support for chemistry Research and Development (R&D) performed at U.S. universities from 1990 to 2009. Federal R&D funding is an essential source of funds for investigator-driven research at the nation’s universities. Previous studies have documented that aggregated federal R&D funding has become more dispersed over time and attributed this to political pressure to spread resources more evenly. There have, however, been few studies of the allocation of funds within narrowly defined scientific disciplines. By narrowing the focus and exploiting the panel nature of our data we are better able to analyze the correlates of funding variation, yielding a number of new insights not apparent in studies using more aggregated data. First, we find that R&D expenditures at the discipline level are considerably more volatile than aggregate funding. Second, we show a strong positive association between several measures of institutional research capacity and future funding. In particular, we find a positive association between the employment of postdoctoral researchers and higher future research funding.