Let’s delve into cascading funding, and its benefits for entities that want to approach European design.
What Cascade Funding is (and where to find it)
Cascade funding, also called at the technical level Financial Support to Third Parties (FSTP), is a European Commission mechanism for the indirect disbursement of funds. In essence, within a funded project (e.g., Creative Europe), the Consortium that is the assignee of the project (the primary beneficiary), redistributes a certain amount of the budget to external parties, called “third parties” or third parties (which can be, as the case may be, small civil society organizations, SMEs, etc.) through the publication of open calls (open calls) within the project itself. The Consortium acts as an intermediary by handling the development of the call, selection, monitoring and payment of third parties.
The funding cascades meet several needs and objectives of the European Commission. In general they allow:
- Simplifying access to European funds: cascading funding is dedicated to civil society organizations, SMEs, and other smaller entities with less management capacity. In this sense, cascade funding is a tool for breaking down barriers to entry in European project design through simplified application forms and reporting procedures;
- Greater capillarity and geographic distribution of funds: these calls often act as a bridge between the transnational/European dimension and the local dimension. The beneficiaries are in fact organizations and entities that, while less structured, are nevertheless more present at the territorial level;
- The testing of solutions in the field: particularly in the case of projects that develop new technologies, cascading funding allows for the involvement of realities, such as SMEs, that can test and validate the solutions developed within their own context. Waterfall financing makes it possible to stimulate digitization and innovation processes even in smaller business realities that would otherwise remain excluded from direct funding.
Cascade Funding opportunities are not always as visible as the main calls. Available cascade funding is also posted monthly on the Guidebook Calls Portal. You can also find calls of this type in the Funding & Tenders Portal by applying the “Cascade Funding” filter in the “Type of grants calls” section.
But what are their characteristics and what makes a “cascade” call different from a “standard” European project call? Let’s look in more detail at the typical features of this type of funding.
Main elements of Cascade Funding
Key features of the FSTP calls include:
- Maximum funding threshold: usually funded projects cannot exceed the €60,000 threshold, except in specific cases duly justified by the announcement;
- Less complexity in the form: although they often take up typical elements of standard project forms, the forms for these types of calls are generally much more concise and with simplified language, suitable even for organizations that are unfamiliar with European calls, as well as often being in the local language (and not necessarily English);
- Opportunity to apply for individual organizations: cascade funding is usually targeted to individual organizations, reducing the complexity, management and design, of having to build a consortium with several partners;
- Local dimension: the project is often carried out locally, although the call for proposals may contain specific requirements on eligible countries (these are usually the countries involved in the source project from which the allocated funds are derived);
- Shorter duration: “standard” European projects can have different durations, but often run between a minimum of 12 and a maximum of 36 months. Projects funded by cascade calls usually have a shorter duration of 6-12 months. This is due not only to the fact that they are projects with smaller actions, but also from the fact that project costs must take place within the timeframe of the main project that “disburses” the funds;
- Simplified reporting: arrangements are simplified and based on the lump sum (flat-rate costs) model.
When applying to cascade calls, it is important to keep two key points in mind: 1) always remember to read the “parent” project from which the cascade call derives, because you will be required to contribute to the outcomes and goals of that project; 2) keep in mind that simplification does not mean superficiality: even if the forms are shorter, competition is often very high, and it becomes important to be able to tell your project story in a way that makes clear results and impact.
As an example, we will present in the coming weeks the experience of the European project “No Planet B,” funded by the DEAR program and coordinated by PuntoSud, with the support of Fondazione Cariplo. Here you can see the calls published within this cascading project.
Organizations that manage Cascade Funding.
We have focused on cascade funding mainly from the perspective of possible beneficiaries, but it is useful to mention some of the tools for organizations on the other side that also publish cascade funding calls within their projects.
It is crucial to remember that, although quite widespread, this mechanism is not always applicable, so you should read the call carefully before including such a funding modality in your project. The possibility, or otherwise, of cascading funding is normally provided for in the work program (Work program) and detailed in the grant agreement (Grant Agreement).
There are also official tools and templates to guide organizations in writing a cascading call and managing it. Funding & Tenders’ IT guide includes operational instructions for opening a funding cascade within one’s ongoing project. Also published by the European Commission is the Guide “Good practices for implementing FSTP in EU grants,” inspired by good practices in use, such as those described in the “Guidance on Enhanced Outreach to CSOs – Collection of good FSTP practices in Neighborhood and Enlargement countries.”
Cascade funding as a European design workshop
Funding cascades are more than “simplified” projects: they represent an opportunity and a European design workshop for all those entities and organizations that are afraid to approach European calls for proposals (after all, you are not always really ready to do so). Therefore, especially if you are a small organization, we recommend that you continue to keep an eye on these types of calls, through the official channels and our Calls Portal.
