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August 17, 2022

Subsidy programs – The money is lying on the street

With about 300 billion euros of unclaimed subsidies in the European Union, an inglorious record was set (cf. Ueberbach 2021), according to a calculation by the EU Court of Auditors (cf. Greive and Riedel 2020). Of this, Germany accounted for about 20 billion euros (cf. Komuno n.d.). But how can this be?

August 17, 2022

Subsidy programs – The money is lying on the street

With about 300 billion euros of unclaimed subsidies in the European Union, an inglorious record was set (cf. Ueberbach 2021), according to a calculation by the EU Court of Auditors (cf. Greive and Riedel 2020). Of this, Germany accounted for about 20 billion euros (cf. Komuno n.d.). But how can this be?

The idea behind subsidy programs

We often encounter funding programs and subsidies in our individual daily lives as well as in the daily news. For example, many students take advantage of the Erasmus program to finance their semester abroad or, as frequently mentioned in the headlines recently, the ‘Digitalpakt’, which promotes the digitization of general education schools. Both of these examples involve funding programs or subsidies, one issued by the European Union and the other by the federal and state governments.
Subsidies are therefore funds that are spent by the public sector, such as the European Union, the federal government or the respective federal state, in order to achieve a specific political or economic goal (see Kochale 2019). As a rule, subsidies do not have to be repaid, yet they are by no means a gift.

The crux of public funds
The funds are there, the purposes are honorable, and yet there are not enough buyers, but how can that be? A question that comes up again and again in the debate and yet has a relatively simple answer. When inquiring in public as well as in private, one hears again and again that the bureaucracy and the complex application procedure have a deterrent effect on interested parties, or even that the resources are lacking to write a complex application. Thus, funding programs are always accompanied by a highly complex application process and rigid as well as high requirements for the projects to be funded, non-compliance with which can result in the repayment of the funding amount. Many interested parties are afraid of the high costs involved in submitting an application and the risk that they will have to finance the project entirely from their own funds or not even start it in the first place if the funding guidelines are not met. A concrete example of this is the Digital Pact mentioned at the beginning of this article. According to the German school portal, only around 55% of the funding for the digitization of educational institutions was applied for and approved after two years (cf. Kuhn 2021).

Funding program offerings are diverse and can be found in a variety of places

Support programs can be issued by various bodies and address a wide variety of topics such as housing, mobility, sustainability or digitization. Depending on their design, the programs are aimed at a wide variety of groups of people such as private households, companies or public institutions. Multiple eligibility is also possible, so that a funding program is aimed at several groups of eligible persons. However, content and eligibility are by no means the only distinctions that can be made.
Programs also vary in their funding amounts, funding and application periods, and funding guidelines.
To express this in figures, the funding database of the Federal Ministry of Economics and Climate Protection can be consulted. Due to multiple eligibility, the total number of active funding programs in Germany is difficult to estimate. However, there are currently around 1,840 subsidy programs for companies, followed by 1,206 subsidy programs for public institutions, municipalities or associations and 466 subsidy programs for private individuals (cf. subsidy database n.d.).

Subsidy consulting can offer a large increase in value

As respectable as the basic idea behind funding programs may be, their implementation in practice is complex. But this is precisely where potential applicants need by no means be left to their own devices. Vindelici Advisors offers a service that helps both private and public applicants to obtain their funding without having to pay for the consulting services themselves. For example, according to the guidelines of the Federal Office of Economics and Export Control (BAFA), a federal authority within the scope of the Federal Ministry of Economics and Climate Protection, small and medium-sized enterprises are allowed to make use of consulting services provided by external, qualified consultants and to have the costs subsequently reimbursed via the subsidies (cf. BAFA n.d.).
In this way, companies can hand over most of the work involved in submitting the application to a strong partner and at the same time have a project financed by public funds made available for this purpose. Thus the subsidy consultation represents a Win Win situation for the subsidy giver and the applicant.
The subsidy consultation itself runs then essentially over three phases. In phase 1, the applicant’s company is analyzed in detail and suitable funding programs at EU, federal or state level are identified. This longlist of potential funding programs is then evaluated according to the suitability and relevance of the program, as well as the applicable funding guidelines, and consequently a shortlist of the most promising funding programs is generated. The shortlist is then discussed with the client and a decision is made on which programs to ideally apply to.
Finally, in close coordination with the applicant, the grant applications, including all agency- and measure-related documents, are prepared and submitted to the respective granting agency in due time

Our success stories

In 2021, we were able to celebrate a great success as a young company in the field of subsidy consulting. For example, we supported two municipal transport companies in their application for a nationwide program to fund a model project to strengthen local public transport, issued by the Federal Office for Goods Transport. A total of 600 applications were received nationwide for the funding program, of which only 16 applicants were selected. Among these 16, both companies which we supported with their application were awarded funding in the seven-digit range. This was a great success for our customers, for us as a company and a strong sign that subsidy consulting pays off.

BAFA (o.J.): URL https://www.bafa.de/DE/Wirtschaft/Beratung_Finanzierung/Unternehmensberatung/unternehmensberatung_node.html.

Förderdatenbank (o.J.): URL https://www.foerderdatenbank.de/FDB/DE/Home/home.html.

Greive, Martin und Riedel, Donata (2020): Staat sitzt auf mehr als 30 Milliarden Euro – und kann das Geld nicht ausgeben. Handelsblatt. URL https://www.handelsblatt.com/politik/deutschland/investitionsstau-staat-sitzt-auf-mehr-als-30-milliarden-euro-und-kann-das-geld-nicht-ausgeben/25391642.html.

Kochale, Sven (2019): Warum Fördermittel nicht abgerufen werden. Deutschlandfunk. URL https://www.deutschlandfunk.de/investitionsstau-warum-foerdermittel-nicht-abgerufen-werden-100.html.

Komuno (o.J.): Fördermittel. URL https://komuno.de/lexikon/foerdermittel/.

Kuhn, Annnette (2021): Geld aus Digitalpakt Schule kommt nur langsam in Schulen an. Das deutsche Schulportal. URL https://deutsches-schulportal.de/bildungswesen/was-hat-der-digitalpakt-schule-bislang-gebracht/.

Ueberbach, Stepahn (2021): 300 Milliarden Euro Fördergelder nicht abgerufen. Tagesschau. URL: https://www.tagesschau.de/ausland/europa/eu-foerdergelder-101.html.

Dennis Grünewald