EU Guidance on Financial Support to Third Parties (FSTP)

For future Living Labs and Lighthouses, challenges are often encountered with designing financial support to third parties (FSTP). This document is designed to help applicants and beneficiaries manage FSTP grants in EU funding programmes. Grants with financial support to third parties (‘FSTP’ or ‘cascade funding’) are EU grants which include a budget window that can be used by the beneficiaries to publish calls for recipients downstream, in cascade mode. They are allowed if the call conditions of the EU call provide for it. FSTP grants allow to reach also smaller projects and consortia that wouldn’t necessarily have the capacity to apply directly for EU grants. They use the specific know-how, infrastructure and resources of beneficiaries to channel and distribute the EU support at larger scale and in smaller segments. However, they also imply challenges and risks with regard to complexity and administrative and financial burden for beneficiaries. This guidance is based on efforts to take stock and analyse the different kinds of FSTP that are currently in use (see, for instance, the Guidance on Enhanced Outreach to CSOs – Collection of good FSTP practices in Neighbourhood and Enlargement countries). It aims to clarify the conditions and assist beneficiaries in designing their FSTP, by sharing best practices, along with specific examples and templates derived from past experience with the use of FSTP. Published in 2025