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Managing a Horizon Europe Lump Sum Grant Project



Horizon Europe is set for the first “significant wave” of lump sum calls in 2023 and 2024, with up to a quarter of large-scale collaborative research projects set to adopt this approach. But what does a lump sum grant entail, and how does it differ from more traditional or conventional grant awards?


What is a lump sum grant?


Lump sum grants are offered as an alternative to traditional grants, which require real cost reporting. In contrast, lump sum grants are paid out without the beneficiaries having to file timesheets or report on each item of spending. The inclusion of this type of grant payment has been talked about since before the pandemic, but is finally becoming more widely available in 2023.


Besides the method of payment, the planning, evaluation, and execution of projects is no different from a traditional grant. In particular, the payment of lump sums is not dependent on successful outcomes, which are never certain in research and are not required by any aspiring projects. Lump sum projects follow the same payout schedule, enjoy the same degree of flexibility, and their performance is judged by the same standards as traditional Horizon Europe grants.


Why are lump sum grants offered?


One of the main goals of offering these grants is to reduce bureaucratic overhead and high error rates in EU spending on research. It is intended to particularly benefit smaller institutions and companies with less experience in EU programmes, with nearly 75% of awards earmarked for smaller organisations that hold only one or two grants and do not have the capacity to deal with actual cost reporting.


Lump sum awards make the programme simpler by removing the need to report actual costs, allowing for these small organisations and newcomers to cope with the complex rules for actual costs. The award payments are defined up-front and fixed in the Grant Agreement, and are then paid upon completion of the activities in work packages.


Lump sum grant options

There are two options when applying for lump sum grants: standard amount (proposed by the EC) or project estimation amount (proposed by applicant).


Option 1: Standard lump sum pre-fixed by the European Commission


For the first option, applicants in the project proposal provide a breakdown of the lump sum showing the share per work package and within each WP, as well as the share assigned to each beneficiary. The proposal must describe the activities covered by the lump sum share for each WP. Evaluators then check that adequate resources are committed and compare to other potential applications to make a final decision.


Option 2: Amount of the lump sum is proposed by the applicants


For the second option, project proposals can submit a detailed estimate of eligible direct and indirect costs. Beneficiaries must make a declaration that they have followed their own accounting practices. EC experts then evaluate costs, comparing them to the statistical data on costs and resources from the previously funded, comparable projects and they may make recommendations before coming to a decision.


Pros and cons of lump sum grants

Below is a summarized list of the main positives and negatives of applying for and receiving lump sum funding from a Horizon Europe grant.


Pros:

  • Generous pre-financing.

  • Easier financial reporting.

  • Simplified Grant Agreement.

  • Better way to engage SMEs and less experienced organisations.

  • Simplified methodology.

  • Exchange rate reporting eliminated.

  • Focused on completion of planned activities.


Cons:

  • Innate joint liability.

  • Greater emphasis on technical reporting.

  • Higher risks associated with financial commitments.

  • Detailed budget required at proposal stage.

  • Planned activity non-completion risk assessment required at proposal development stage.

  • No adjustments to previously reported costs.


What are the five most important things to know about lump sum Horizon Europe grants?

  1. Lump sums grants are defined up-front and are fixed in the Grant Agreement.

  2. Funds are paid out upon completion of activities in the work packages.

  3. The payment of lump sums does not depend on successful outcomes (which are never certain in research) and follows the regular EC payment schedule.

  4. Lump sum projects enjoy the same degree of flexibility as traditional actual cost projects, and their performance is judged by the same standards.

  5. There is no need to keep specific records on the actual costs incurred in lump sum projects.


Linq Consulting can help with lump sum grant management


Linq Consulting specializes in all areas of creating and managing successful proposals and projects, with dedicated project planning specialists that have experience with multi-million Euro collaborative funding applications. Our team of expert researchers, writers, and project managers can help with all aspects of not only writing a work plan and budget, but also carrying it through and implementing it for Horizon Europe proposals or project management.


The dedicated experts at Linq Consulting are available to assist with Horizon Europe proposals at every stage of the writing and application process. With our expertise in grants management, we can help you secure funding from Horizon Europe, as well as any other grant opportunities that may be available.


For more information on how we can help, get in touch with us at info@linq-consulting.com.


Be sure to follow us on Twitter @linq-consulting and connect with us on LinkedIn as well.


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