1 SUPPORT TO PILOT SOCIAL ENTREPRENEURSHIP INITIATIVES FOR CSOS
This action is in line with the EU commitment to increase support to Armenian civil society as specified in the Single Support Framework (SSF) 2014-2017, the EU Roadmap for Engagement with Civil Society in Armenia, endorsed in 2014. The revised European Neighbourhood Policy (ENP) places a special emphasis on increased engagement with civil society through a partnership with societies, helping CSOs to develop their advocacy capacity, their ability to monitor reform and their role in implementing and evaluating EU programmes. Commission Communication (2012) "The roots of democracy and sustainable development- Europe's engagement with Civil Society in external relations" prioritises overcoming capacity constraints of local CSOs ranging from limitations in technical management and leadership skills, fundraising, to results management and issues of internal governance. More generally, the EU is committed to reinforce its support to the capacity development of CSOs, particularly of local actors, as part of a long-term, demand-driven and flexible approach, giving particular consideration to constituency building and representativeness. This also includes support to building long-term and equitable partnerships for capacity development between local and European CSOs. Therefore, tailored funding constitutes an important component of the EU's engagement with CSOs and should allow better access for local organisations.
Through this programme, the EU will seek to build the capacity of CSOs in Armenia to support CSOs to engage in pilot social entrepreneurship type of activities as a way to strengthen the sustainability of their activities and diversify their resources. The definition of a social enterprise in the context of CSOs is non- profit organisations which apply business models to fulfil their primary mission.
The Armenian CSOs are characterized by deficiencies in organizational capacity, internal governance and financial sustainability but also intense negative perceptions and lack of trust from the public. Lack of diversified sources of funding that would offer an alternative to donors' grants makes Armenian CSOs very vulnerable in terms of responsiveness to community needs and prioritization of public accountability. Together with lack of professional and strategic approach to organizational management, this contributes to the low level of institutional development of Armenian CSOs. Modifications are being introduced in the regulatory framework for CSOs which will allow direct involvement of the civil society organizations in income generating activities through social entrepreneurship. This is an important momentum that needs to be capitalised by the proposed initiative in order to strengthen financial sustainability and diversification of CSO financial resources.
1.2 OBJECTIVES OF THE PROGRAMME AND PRIORITY ISSUES
The global objective of this call for proposals is to promote financial sustainability and diversification of
resources of CSOs.
The specific objective of this call for proposals is to support pilot social entrepreneurship type of activities implemented by the civil society organisations as a way to strengthen the sustainability of their activities and diversify their resources.
The actions shall contribute to social cohesion, employment and the reduction of inequalities as well as provide communities with economic opportunities and solutions to other critical social problems.
1.3 FINANCIAL ALLOCATION PROVIDED BY THE CONTRACTING AUTHORITY
The overall indicative amount made available under this call for proposals is EUR 700,000. The
Contracting Authority reserves the right not to award all available funds.
Size of grants
Any grant requested under this call for proposals must fall between the following minimum and maximum amounts:
minimum amount: EUR 200,000
Any grant requested under this call for proposals must fall between the following minimum and
maximum percentages of total eligible costs of the action:
Minimum percentage: 50 % of the total eligible costs of the action.
The balance (i.e. the difference between the total cost of the action and the amount requested from the
Contracting Authority) must be financed from sources other than the European Union Budget or the
European Development Fund .
2 RULES FOR THIS CALL FOR PROPOSALS
These guidelines set out the rules for the submission, selection and implementation of the actions
financed under this call, in conformity with the Practical Guide, which is applicable to the present call 5
(available at http://ec.europa.eu/europeaid/prag/document.do?locale=en) .
2.1 ELIGIBILITY CRITERIA
There are three sets of eligibility criteria, relating to: (1) the actors:
The lead applicant, i.e. the entity submitting the application form (2.1.1),
if any, its co-applicant(s) (where it is not specified otherwise the lead applicant and its
co-applicant(s) are hereinafter jointly referred as "applicant(s)") (2.1.1),
and, if any, affiliated entity(ies) to the lead applicant and/or to a co-applicant(s). (2.1.2);
(2) the actions:
• Actions for which a grant may be awarded (2.1.4);
(3) the costs:
• types of cost that may be taken into account in setting the amount of the grant (2.1.5).
2.1.1 Eligibility of applicants (i.e. lead applicant and co-applicant(s))
(1) In order to be eligible for a grant, the lead applicant must:
be a legal person and
be non-profit-making and
be a specific type of organisation such as: non-governmental non-profit organisations and independent foundations, think tanks, community based organisations and networks at local national, regional and international level. and
(2) Potential applicants may not participate in calls for proposals or be awarded grants if they are in any of the situations listed in section 2.3.3 of the Practical Guide;
In Annex A.2, section 5 (‘declaration by the lead applicant’), the lead applicant must declare that the lead applicant himself, the co-applicant(s) and affiliated entity(ies) are not in any of these situations.
The lead applicant must act with co-applicant(s) as specified hereafter.
If awarded the grant contract, the lead applicant will become the beneficiary identified as the Coordinator in Annex E3h1 (Special Conditions). The Coordinator is the main interlocutor of the Contracting Authority. It represents and acts on behalf of any other co-beneficiary (if any) and coordinate the design and implementation of the action.
Co-applicants participate in designing and implementing the action, and the costs they incur are eligible in the same way as those incurred by the lead applicant.
Co-applicants must satisfy the eligibility criteria as applicable to the lead applicant. In addition, the following are eligible: Social enterprises, Cooperatives, Local Authorities or associations of Local Authorities constituted in accordance with the legislation in force in the country concerned
Co-applicants must sign the mandate in Annex A.2., section 4.
If awarded the grant contract, the co-applicant(s) (if any) will become beneficiary(ies) in the action (together with the Coordinator).
2.1.2 Affiliated entities
The lead applicant and its co-applicant(s) may act with affiliated entity(ies)
Only the following entities may be considered as affiliated entities to the lead applicant and/or to co-applicant(s):
Only entities having a structural link with the applicants (i.e. the lead applicant or a co-applicant), in particular a legal or capital link.
This structural link encompasses mainly two notions:
(i) Control, as defined in Directive 2013/34/EU on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings:
Entities affiliated to applicant may hence be:
- Entities directly or indirectly controlled by an applicant (daughter companies or first-tier subsidiaries). They may also be entities controlled by an entity controlled by an applicant (granddaughter companies or second-tier subsidiaries) and the same applies to further tiers of control;
- Entities directly or indirectly controlling the applicant (parent companies). Likewise, they may be entities controlling an entity controlling the applicant;
- Entities under the same direct or indirect control as the applicant (sister companies).
(ii) Membership, i.e. the applicant is legally defined as a e.g. network, federation, association in which the proposed affiliated entities also participate or the applicant participates in the same entity (e.g. network, federation, association) as the proposed affiliated entities.
The structural link shall as a general rule be neither limited to the action nor established for the sole purpose of its implementation. This means that the link would exist independently of the award of the grant; it should exist before the call for proposals and remain valid after the end of the action.
By way of exception, an entity may be considered as affiliated to an applicant even if it has a structural link specifically established for the sole purpose of the implementation of the action in the case of so- called “sole applicants” or “sole beneficiaries”. A sole applicant or a sole beneficiary is a legal entity formed by several entities (a group of entities) which together comply with the criteria for being awarded the grant. For example, an association is formed by its members.
What is not an affiliated entity?
The following are not considered entities affiliated to an applicant:
- Entities that have entered into a (procurement) contract or subcontract with an applicant, act as concessionaires or delegatees for public services for an applicant,
- Entities that receive financial support from an applicant,
- Entities that cooperate on a regular basis with an applicant on the basis of a memorandum of
understanding or share some assets,
How to verify the existence of the required link with an applicant?
The affiliation resulting from control may in particular be proved on the basis of the consolidated accounts of the group of entities the applicant and its proposed affiliates belong to.
The affiliation resulting from membership may in particular be proved on the basis of the statutes or equivalent act establishing the entity (network, federation, association) which the applicant constitutes or in which the applicant participates.
If the applicants are awarded a grant contract, their affiliated entity(ies) will not become beneficiary(ies) of the action and signatory(ies) of the grant contract. However, they will participate in the design and in the implementation of the action and the costs they incur (including those incurred for implementation contracts and financial support to third parties) may be accepted as eligible costs, provided they comply with all the relevant rules already applicable to the beneficiary(ies) under the grant contract.
Affiliated entity(ies) must satisfy the same eligibility criteria as the lead applicant and the co-applicant(s). They must sign the affiliated entity(ies) statement in Annex A.2., section 5.
2.1.3 Associates and Contractors
The following entities are not applicants nor affiliated entities and do not have to sign the "mandate for co-applicant(s)" or "affiliated entities' statement":
Other organisations or individuals may be involved in the action. Such associates play a real role in the action but may not receive funding from the grant, with the exception of per diem or travel costs. Associates do not have to meet the eligibility criteria referred to in section 2.1.1. Associates must be mentioned in Annex A.2., section 6 — ‘Associates participating in the action’.
The beneficiaries and their affiliated entities are permitted to award contracts. Associates or affiliated entity(ies) cannot be also contractors in the project. Contractors are subject to the procurement rules set out in Annex IV to the standard grant contract.
2.1.4 Eligible actions: actions for which an application may be made
An action is composed of a set of activities.
The initial planned duration of an action may not be lower than 18 months nor exceed 24 months.
Sectors or themes
Generally Social Entrepreneurship is a framework contributing to social cohesion, employment and the reduction of inequalities.
In the context of this call "Social Enterprise" is defined as follows: non-profit non-governmental organisations which apply business models to fulfil their primary mission. In other words, this refers to non-profit non-governmental organisations that recognize a social problem and use entrepreneurial principles to organize, create, and manage a venture to make social change.
Projects under this Call for Proposals should support income generating activities (diverse strategies used by civil society organizations to generate their own revenues, such as sale of products, service fees, use of hard or soft assets, etc) in a carefully assessed and planned manner, which could significantly strengthen financial sustainability and mission impact of a CSO.
Actions must take place in Armenia.
Types of action
An eligible action must constitute a project - a self-contained operation consisting of coherent sets of activities with clearly defined objectives in line with the objectives and priorities listed under section 1.2 above – target groups and tangible outcomes. Actions will be selected, inter alia, on the basis of their relevance, expected results and potential effectiveness.
The applicants are encouraged to co-operate with a wide range of stakeholders (other actors, local authorities, state institutions etc.) so as to jointly strive for synergies and to eventually ensure consolidated outcomes. Projects should contain measures ensuring multiplication and sustainability of its outcomes under a detailed development plan.
The following types of action are ineligible:
actions concerned only or mainly with individual sponsorships for participation in workshops, seminars, conferences and congresses;
actions concerned only or mainly with individual scholarships for studies or training courses;
actions which consist fully and exclusively of the production and maintenance of websites, production of magazines and newspapers, organisation of conferences or seminars and production of studies or reports;
one-off conferences: conferences may only be funded if they form part of a wider range of activities to be implemented over the life-time of the action. For this purpose, preparatory activities for a conference and the publication of the proceedings of the conference do not, in themselves, constitute such “wider activities”;
actions supporting political parties, groups and movements
purchase of buildings or offices
core funding of the applicant or its partners (for activities which are normally carried out by the applicant and/or its partners)
academic research (unless as a limited part of a broader project)
Types of activity
Types of activities may include some of the following (not exhaustive):
providing access to basic services (social, educational and health);
contributing to foster innovation in Armenia
contributing to a more balanced use of local resources encouraged by wide participation of local stakeholders;
contributing to the promotion of inclusive governance models that empower the local community in strategic decision-making;
creating new employment as a result of the new services supplied and favouring labour market
integration of disadvantaged people (minority groups, women, people with disabilities, etc.)
otherwise excluded from income-generating opportunities;
The following main principles of operating the social enterprise have to be preserved:
All products/services have to be mission related
Provide a flexible, untied financing source for sustaining and thus furthering CSO missions and build a stronger, more locally sustainable civil society
• Develop a vibrant, environmentally - and socially-responsible local economy
Financial support to third parties
Applicants may not propose financial support to third parties. Visibility
The applicants must take all necessary steps to publicise the fact that the European Union has financed or co-financed the action. As far as possible, actions that are wholly or partially funded by the European Union must incorporate information and communication activities designed to raise the awareness of specific or general audiences of the reasons for the action and the EU support for the action in the country or region concerned, as well as the results and the impact of this support.
Applicants must comply with the objectives and priorities and guarantee the visibility of the EU financing (see the Communication and Visibility Manual for EU external actions specified and published by the European Commission at https://ec.europa.eu/europeaid/communication-and-visibility-manual-eu- external-actions_en).
Number of applications and grants per applicants / affiliated entities
The lead applicant may not submit more than 1 application under this call for proposals.
The lead applicant may not be awarded more than 1 grant under this call for proposals.
The lead applicant may not be a co-applicant or an affiliated entity in another application at the same time.
A co-applicant/affiliated entity may not submit more than 1 application under this call for proposals. A co-applicant/affiliated entity may not be awarded more than 1 grant under this call for proposals.
2.1.5 Eligibility of costs: costs that can be included
Only ‘eligible costs’ can be covered by a grant. The categories of costs that are eligible and non-eligible are indicated below. The budget is both a cost estimate and an overall ceiling for ‘eligible costs’.
The reimbursement of eligible costs may be based on any or a combination of the following forms:
− actual costs incurred by the beneficiary(ies) and affiliated entity(ies)
Simplified cost options may take the form of:
− unit costs: covering all or certain specific categories of eligible costs which are clearly identified in advance by reference to an amount per unit.
− lump sums: covering in global terms all or certain specific categories of eligible costs which are clearly identified in advance.
− flat-rate financing: covering specific categories of eligible costs which are clearly identified in advance by applying a percentage fixed ex ante.
The amounts or rates have to be based on estimates using objective data such as statistical data or any other objective means or with reference to certified or auditable historical data of the applicants or the affiliated entity(ies). The methods used to determine the amounts or rates of unit costs, lump sums or flat- rates must comply with the criteria established in Annex K, and especially ensure that the costs correspond fairly to the actual costs incurred by the beneficiary(ies) and affiliated entity(ies), are in line with their accounting practices, no profit is made and the costs are not already covered by other sources of funding (no double funding). Refer to Annex K for directions and a checklist of controls to assess the minimum necessary conditions that provide reasonable assurance for the acceptance of the proposed amounts.
Applicants proposing this form of reimbursement, must clearly indicate in worksheet no.1 of Annex B, each heading/item of eligible costs concerned by this type of financing, i.e. add the reference in capital letters to "UNIT COST" (per month/flight etc), "LUMPSUM" or "FLAT RATE" in the Unit column. (see example in Annex K)
Additionally in Annex B, in the second column of worksheet no.2, "Justification of the estimated costs" per each of the corresponding budget item or heading applicants must:
− describe the information and methods used to establish the amounts of unit costs, lump sums and/or flat-rates, to which costs they refer, etc.
− clearly explain the formulas for calculation of the final eligible amount10
At contracting phase, the Contracting Authority decides whether to accept the proposed amounts or rates on the basis of the provisional budget submitted by the applicants, by analysing factual data of grants carried out by the applicants or of similar actions and by performing checks established by Annex K.
The total amount of financing on the basis of simplified cost options that can be authorised by the Contracting Authority for any of the applicants individually (including simplified cost options proposed by their own affiliated entities) cannot exceed EUR 60 000 (the indirect costs are not taken into account).
Recommendations to award a grant are always subject to the condition that the checks preceding the signing of the grant contract do not reveal problems requiring changes to the budget (such as arithmetical errors, inaccuracies, unrealistic costs and ineligible costs). The checks may give rise to requests for clarification and may lead the Contracting Authority to impose modifications or reductions to address such mistakes or inaccuracies. It is not possible to increase the grant or the percentage of EU co-financing as a result of these corrections.
It is therefore in the applicants' interest to provide a realistic and cost-effective budget
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