Basic rules of grants
A grant is a direct financial contribution, by way of donation, from the EC budget or the EDF (see Funding strategy), in order to finance:
- either an action intended to help achieve an objective forming part of a European Union policy (Action grants);
- or the functioning of a body which pursues an aim of general European interest or has an objective forming part of a European Union policy (Operating grants). The purpose of an operating grant is to provide financial support towards the functioning of an organisation in its core activities - over a period that is equivalent to its financial year - in order to carry out a set of activities.
For EC-grants for external actions, EuropeAid sets a framework for the award and monitoring mechanisms involving specific provisions for implementing the principles of transparency, equal treatment, co-financing, prohibition of retrospective awards and quality control.
Basic rules of grants state that:
- they are a form of complementary financing:the EC only exceptionally finances projects up to 100%. The maximum contribution varies according to the call for proposals and the nationality of the applicant (e.g. in some CfPs the co-financing threshold for EU12 or local NGOs is usually 90%). Most often, the applicant must contribute to the action with its own funds or by finding another donor. The expected sources of co-financing must be declared at the moment of submission of the proposal;
- they cannot lead to a profit for their beneficiaries:the funds received through a grant must be fully used for the achievement of the objectives of the action and the implementation of the relevant activities;
- they cannot be awarded retroactively for actions that are already completed: Grants only cover costs incurred after the date on which the Grant Contract is signed. A grant may be awarded for an action which has already begun only where the applicant can demonstrate the need to start the action before the contract is signed. In any case, expenditure incurred prior to the deadline for submitting proposals or, in the case of direct award, the date of submission of the grant application, and if applicable the date of signature of the relevant financing agreement (for decentralised management), is not considered eligible;
- they are based on the reimbursement of eligible costs: Grants cover costs effectively incurred by the beneficiaries that are deemed necessary for carrying out the project activities. The EC financial contribution, as specified in the Grant Contract, can never be augmented even if the final cost of the Action is higher than the one initially estimated;
- only one grant may be awarded for the same action: no single Beneficiary may receive more than one grant from the EC Budget or EDF to finance a given action. A Beneficiary may be awarded only one operating grant financed by the EC Budget or EDF per financial year.
Sources and useful links