Cascade funding, officially referred to as Financial Support to Third Parties (FSTP), has become an increasingly common mechanism in Horizon Europe and the Digital Europe Programme. It is designed to facilitate the participation of a broader group of stakeholders, such as SMEs, start-ups, research teams, and public or non-profit organisations, by providing them with a more accessible entry point into the EU funding landscape.

In a Nutshell: How Does Cascade Funding Work in Practice

1. Primary Grant
   The European Commission awards a large grant to a consortium of organisations for the implementation of a specific project under programmes like Horizon Europe or Digital Europe.
2. Sub-Grants
   When explicitly allowed or required in the call topic, the consortium launches open calls inviting other entities, who are not part of the original grant agreement, to apply for funding to carry out specific tasks that contribute to the broader project.
3. Application and Selection
   Interested applicants submit proposals, which are evaluated based on criteria set by the consortium, such as innovation potential, technical feasibility, and expected impact.

In the subsequent explanations we concentrate on cascade grants that are managed by consortia from projects of Pillar 2 Horizon Europe (so excluding FSTP from CO-fund projects and EIT cascade grants) and Digital Europe FSTP actions.

What are the benefits for an organization (including SME’s) to participate in a cascade call?

• Opportunities for internationalisation: It helps to kick-start the internationalisation process in research and innovation.
• Reduced administrative burden: Cascade funding involves simpler procedures and reporting compared to traditional EU funding application processes. Recipients do not need a PIC code, and have direct contact with the consortium.
• Agility: These are often shorter projects with fewer partners, enabling faster development and more efficient project management.
• Focus: Projects are tailored to specific needs or challenges

Where can I find cascade call opportunities for my organization?

The consortia that issue cascade grants have the obligation to publish them

1. On the Funding&Tender Portal

 You can use a filter to find these calls directly:  you can go to the section “call for proposals and select “Calls for funding in cascade” in “all filters.”

Follow this link for cascade calls under Horizon Europe and this link for cascade calls under Digital Europe.

2. On the project websites

Unfortunately, there is no list available of all the projects that are issuing cascading grants.

The obligation to publish cascade calls on the Funding & Tenders Portal is explained for Horizon Europe in the General Annexes of the Work Programme. For Digital Europe this obligation is explained in the specific call documents of FSTP grants in the item “eligibility”.

What is the typical grant amount provided through these calls, and for what types of activities can it be used in Horizon Europe?

For cascade calls originating from Horizon Europe Pillar II projects, there is typically a limit of EUR 60,000 per grant, applicable per beneficiary. However, exceptions to this rule do exist, and it is common to find cascade calls on the Funding & Tenders Portal offering grants above this amount. The financial support of the cascade grant may take any form (eg. Lump sum, prize, actual costs incurred by final recipients).  

Cascade funding can be applied to different types of activities. These are specified in the call text, and specific conditions may apply.

How are cascade grants organised in the Digital Europe Programme?

Under Digital Europe, Financial Support to Third Parties is a specific type of action. Call topics that are marked as FSTP instrument are obliged to dedicate the majority of the budget to cascade funding. The percentage of the budget that has to be dedicated to cascade funding as well as maximum amounts are detailed in the respective call document. While the funding rate for the initial consortium is 100% of eligible project costs, cascade projects will get 50% of their eligible costs reimbursed and have to cover the remaining 50% by own means and/or regional or national subsidies.

Financial support to third parties under Digital Europe can be used for various activities, such as small pilot projects, scholarships in education schemes or the development of digital solutions.