Beneficiaries
Beneficiaries are characterized as legal entities that sign the Grant Agreement with the European Commission. Beneficiaries are full responsible for project implementation, including its technical aspects. They are also responsible for planning and documenting resource usage.
To qualify as a beneficiary, the legal entity must:
- Be registered in either an EU Member State or an associated country
- Be an organization in a low- or middle-income country
- Be registered in a country that has a bilateral funding agreement with the EU
- Be an organization that evaluators considered essential for the implementation of the project.
Third Parties
Third parties are legal entities that participate in a project without signing the Grant Agreement. They also do not have full responsibility for project implementation.
Not all types of third parties can be involved in all types of projects, so it is important to assess the purpose of the participation of a given third party.
In Horizon Europe, the following third parties exist:
- Affiliated Entities
- Associated Partners
- Third Parties providing in-kind contributions
- Subcontractors
- Recipients of financial support to Third Parties.
Even though Third Parties are not part of the formal consortium of beneficiaries, they are required to comply with confidentiality, ethical guidelines, and proper documentation of their contributions, as outlined in the Grant Agreement. Generally, their tasks must be included in the application for them to potentially be eligible for funding.
Affiliated Entities
Affiliated Entities are organizations that have a legal, contractual, or ownership relationship with a beneficiary. This can include parent or subsidiary companies, member organizations, or organizations with a cooperation agreement. The Affiliated Entities and their tasks must be included in the application and the budget.
Affiliated entities are required to:
- Carry out project activities and comply with reporting rules in the same manner as beneficiaries.
- Meet the same eligibility criteria as beneficiaries, such as being based in an EU Member State or an associated country.
However, the beneficiary’s responsibility includes:
- Ensuring that the Affiliated Entity delivers tasks and reports in accordance with the Grant Agreement.
- Reporting the Affiliated Entity’s costs and contributions.
Associated Partners
Associated Partners are organizations that participate in the project without receiving funding for their project activities. Their tasks and participation in the project must be specified in the application.
The Associated Partner must adhere to rules regarding confidentiality, ethical rules, and security.
Third Parties Providing In-Kind Contributions
Third Parties may provide in-kind contributions, which are eligible for support. In-kind contributions include:
- Personnel (working within their own organization or seconded to the beneficiary)
- Equipment
- Other services.
These contributions must not constitute project activities but should instead be supporting activities necessary for the project.
Key considerations when receiving in-kind contributions:
- These Third Parties must not be used to bypass eligibility rules.
- The beneficiary is responsible for accounting for these contributions with the European Commission.
- Contributions must be included in the budget of the given beneficiary and Third Parties and must be detailed in Annex 1 of the Grant Agreement.
- Beneficiaries must ensure that Third Parties can be audited by the European Commission.
Subcontractors
Beneficiaries can outsource minor parts of project tasks, but outsourcing must be reasonable and should not replace the inclusion of a supplier as a beneficiary.
Rules for subcontracting:
- Market prices must be assessed, and selection should be documented based on the lowest price or best price-quality ratio.
- Subcontracting must be described in the project description in the Grant Agreement and included in the budget.
- Other beneficiaries or Affiliated Entities cannot be used as subcontractors.
- Framework agreements are allowed if they are standard practice and properly documented.
- Subcontracting costs cannot be included in indirect costs.
Recipients of Financial Support to Third Parties
Recipients of financial support to Third Parties can include organizations that win a call for proposals or competitions within the project framework. This type of funding is also known as Financial Support to Third Parties (FSTP) or cascade funding.
FSTP or cascade funding is only an option if it is explicitly mentioned in the specific funding call.
The purpose of this funding is to enable the disbursement of funds to Third Parties based on the consortium’s own criteria. These criteria must be clearly defined in the application.
Examples of funding calls that the consortium can issue:
- Calls for solving specific tasks
- Prizes for the best problem-solving solutions
- Contributions to participants in project activities.
Requirements for providing financial support to third parties:
- A separate annex with selection criteria must be included in the application.
- The maximum amount per third party is €60,000, unless stated otherwise in the call.
- Exceptions: Higher amounts require a specific justification in the application.
Although third parties are not part of the consortium, beneficiaries must ensure that Third Parties can be audited by the European Commission.