European Union Funding
As a development manager at a US-based international NGO, one of the constant issues faced was how to diversify funds: get away from USAID-dependence and attract non-US funding. Due to the politically sensitive work, and high-dollar programs, I did not focus too much time on foundation opportunities. Rather, I looked abroad, at other bilateral funding agencies such as UK’s DfID, Sweden’s SIDA and of course the big elephant, the European Union’s Development and Cooperation – EuropeAid.
I will lay out a few things in this series:
- Self-analysis: What your organization needs to know and be prepared for when applying for and managing EU funded projects. Decisions that need to be made.
- EU 101: A brief explanation of the EU structure and what is important from a development standpoint.
- Approaches for outreach and entry to European Union funding.
European Funding does not come overnight, and the complexity of the financial system, reporting and eligibility issues would put many suitors off. There are some questions you must ask yourself and be able to answer, before you apply for grants or contracts from an entity that your business is not necessarily prepared for.
Do you plan to have a EU-based office or will this be a US-based organization?
There are many different rules regarding eligibility for EU funds if you are a US organization, or if you have an office located within the EU. Suffice to say a stand-alone EU registered organization has a lot more opportunities, as funding is still very much restricted to EU registered organizations or organizations from the beneficiary country. Things are changing somewhat, and more global calls for proposals are available than even 3 years ago.
Do your contracts & finance teams understand the regulations for EU bids, and do you have the financial capacity to “supplement” EU funding?
Generally, EU overhead rates are a lot lower than what the US Gov will accept. For example, the max management cost for EU is 7% of the total EU contribution.
You may also need to set up a fund to supplement EU programs, as most EU programs will withhold 20% of 1st year funding, and 10% total funds are paid after final report is accepted. Donor may require advance/co-funding of a project.
Knowledge on compliance, regulations, and mechanisms with EU regulations to be able to accept EU funding is vital. The last thing you want is to apply for funding, and then not be able to accept their terms or reporting requirements.
Your team will need to inform those in your organization that look for funding in the field so that they are full aware of the opportunities and caveats of approaching the EU.
The Practical Guide should be the bible for all contractual issues.
Deal with sticky issues head on.
Some decisions will need to be made between your finance, contracts & HR divisions:
- Daily rates for staff, do you have different rates for different donors? Lower overhead rates and daily employee rates for tender may be necessary for a different market.
- Policy decisions on indirect costs i.e. danger-pay for non-USG funded programs. What happens when they are different for EU and US funded programs.
- West Bank /Gaza and Palestinian territories. Be careful about the US restrictions on working with some groups within the region. Even if it is with different funders, the US may deny funding of other programs if it deems you non-compliant.
- Hiring and benefit packages within EC standards
- Even such mundane issues like the required DOB and social status in EU CV templates can cause headaches for your HR team.
With full knowledge of EU regulations, a clear communications plan for your development and field staff, and a flexible organizational policy and financial system, EU funding can be obtainable.
