Horizon Europe, the EU's flagship research and innovation program, uses different forms of grants to fund projects.3 The two most common are actual cost grants and lump sum grants.3 Knowing the difference shapes how you build your proposal budget from day one.
How Lump Sum Grants Differ
Official guidance on lump sums focuses on a limited number of aspects where this model deviates from the rules for traditional actual cost grants.1 The scope is deliberately narrow — the guidance covers only those aspects where lump sum funding deviates from the rules for traditional actual cost grants.1
The core deviations concern financial management: specifically, how the lump sum is fixed and how it is paid.1 These are the two financial management aspects the guidance specifically addresses.1
Lump Sums Are Not Free Money
A persistent myth is that lump sum grants come with looser oversight. They do not.3 Lump sum grants are not "free money" without oversight — accountability does not disappear under this model.3
A well-structured budget does not just add up the euros.3 It signals to evaluators that you have a realistic plan to deliver results, and that remains true under either funding model.3
What the Guidance Actually Covers
Lump sum guidance addresses the financial management rules — how the amount is determined upfront and what conditions trigger payment.1 The guidance addresses only the deviations; the broader rules for traditional actual cost grants continue to apply alongside it.1
Applicants should read the lump sum guidance alongside the broader grant rules, not instead of them. The two documents work together.
Building a Winning Budget
Guidance, at its core, means help and advice about how to do something or deal with problems.7 In the EU grants context, that translates to clear, actionable rules you can rely on during proposal writing.
Whether you choose actual costs or the lump sum route, your budget must convince evaluators you can deliver.3 The funding model is a tool; the proposal logic is what wins the grant.
What to Watch Next
The European Commission now offers lump sum grants alongside traditional actual cost grants across Horizon Europe.3 Applicants unfamiliar with how lump sums are fixed should consult the guidance document — it covers the financial management rules that differ from standard grants.1