Help, I’m preparing a Horizon Europe Lump Sum proposal – Part 1: The budget

Although the first pilots already stem from 2018, Lump Sum funding is introduced in mainstream European grants starting in the 2024 calls. In Research and Innovation Action proposals, this new type of funding replaces the funding based on actual costs. The Lump Sum funding scheme is designed to simplify reporting during project execution. While this new scheme will significantly decrease financial management workload during the project, it does mean that in the proposal development stage the project budget needs to be much more elaborate than before.

Budget tool

What is Lump Sum funding?

For funded Lump Sum projects, there is no need to report actual costs. This means no more time sheets! Instead, you receive your budget based on the completion of work packages (WPs). Note that this doesn’t mean you only receive funding when the WP outcome is successful: if all tasks in a WP are completed, project partners get the funding assigned to them. Of course, a substantial part of the budget is still provided at project start (pre-financing), to make sure you have funds to start the research.

Preparing a Lump Sum budget

For Lump Sum funding, much more budget details need to be provided at proposal stage. Budget estimations per cost category are needed split among consortium partners and among WPs. There is also more focus on the budget in the evaluation of proposals.  An added evaluation criterion now is that budgets are ‘reasonable and non-excessive’. If deemed too high, budgets can be cut during the grant preparation stage. Specifically for personnel costs, we recommend to check the EC dashboard. If your proposed rate for personnel costs is higher than the 80th percentile of costs for your country and organization type, this requires explicit justification.

Money follows tasks

Coordinators need to submit much more budget details in the proposal stage in the Lump Sum funding scheme. At Fundament, we are convinced that gathering detailed information from all partners is the best way to generate a sensible and manageable project budget. Rather than dividing the total grant budget evenly among the consortium partners, the division of budget should follow the principle ‘money follows tasks’. Partners and/or work packages with more, larger or more complex tasks require a larger share of the budget than others. Budget divisions should always mirror the content of the project. While this sounds pretty common sense, you’d be surprised by the amount of project budgets that are drafted based on an equal distribution amongst partners or project partners invited to commit to projects for a certain budget regardless of their actual specific contributing tasks.

When ballpark figure budgets are negotiated based on the task distribution, then it’s time to ask your partners to specify their detailed budgets in terms of person months, costs for materials, etc.

The Fundament Horizon budget tool

At Fundament, we work with our own online Horizon budget tool, specifically designed to support the drafting of European consortium project budgets. Through the online tool we collect all budget details from your partners that are required for Lump Sum proposals – as well as for Horizon proposals working with actual costs. As a coordinator, you can use this tool to easily keep track of partner input and assess where budgets are higher or lower than expected. This provides a basis for budget negotiations with partners based on the content of work. Eliminating calculation errors and annoying excel sheets, the Fundament budget tool provides the exact cost reports needed for the proposal.

We use the Fundament Horizon Europe budget tool as an integral part of our full support trajectories but we now offer separate budget support for those only needing help with that. Feel free to contact us!

Author: Linde van Ittersum

Co-founder and Research Funding Professional at Fundament.

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