The German funding jungle

There are many forms of subsidies in Germany and obtaining them offers a lot of potential for companies, start-ups, founders and private individuals. The funding programmes range from grants and loans to tax concessions and consultancy services. The funding database of the Federal Ministry for Economic Affairs and Climate Protection currently contains over 2,400 funding programmes, almost 300 of which relate to SMEs alone. However, despite the number of programmes on offer and the many benefits that subsidies offer, there are also some challenges when it comes to designing funding guidelines and their procedural implementation. For the public sector in particular, as a provider of funding, it is of great interest to achieve the greatest possible impact with the available funds.

The funding landscape in Germany is complex. The conditions and requirements are often very specific and complicated, making it difficult for companies to find and apply for the right funding. The large number of different contact persons and institutions makes the search for the right funding even more difficult.

It is understandable that funding is not advertised loudly, as it is a matter of tax funds that are to be used sparingly. Nevertheless, funding opportunities should be transparent and easily accessible for interested parties. To this end, the guidelines and funding conditions should be formulated in a simpler and more comprehensible way and the contact persons and institutions should be better networked.

To date, the funding database of the Federal Ministry for Economic Affairs and Climate Protection has been a central point of contact in addition to the federal government's funding advisory service. The funding programmes of the federal government, the federal states and the European Union are collected in a database there. You can search by keyword, sector, federal state and other filters. However, you are more likely to find the name of the funding programme here. In times of online searches, however, interested parties tend to look for specific services that are subsidised, such as personnel costs, investment grants etc. These services cannot always be derived from the names of the guidelines. In future, the funding database will be replaced by a "funding finder" specialised in funding services. The Federal Ministry for Economic Affairs and Climate is working with the Bavarian State Ministry for Digital Affairs on this solution.

Finding funding is the first hurdle - applying for it is the second. Because there is a lot of bureaucracy involved. Applicants or institutions often have to submit many different certificates and documents in order to receive funding. This can be very time-consuming and costly and can lead to interested parties not applying for funding after all. Requirements and supporting documents should therefore be reduced and the application process digitised in order to simplify the process.

Currently - also driven by the Online Access Act (OZG) - many application procedures in the funding sector are being digitalised. Unfortunately, however, all too often this only covers the application process. However, an electronic mailbox is not enough. Rather, end-to-end digitisation must be rigorously implemented.

The third step, the allocation of funding, can also feel non-transparent. It is often unclear which criteria are used to award the funding, as the wording is cryptic and the distribution rules - for example the administrative practice - are not publicly accessible. This often makes it difficult for those interested in funding to assess whether a funding application is likely to be successful, especially as they do not receive any information on the extent to which funding pots have already been utilised and how many applications have been submitted. This can lead to companies losing confidence in the funding landscape and being deterred from applying for funding. The criteria for awarding funding should therefore be defined more clearly and the award procedures made more transparent in order to increase interested parties' confidence.

In addition, there is a backlog of digitisation and modernisation work to be done in the existing specialist assessment procedures. From manual date checks to the distribution of funding application files, there is great potential to automate the many manual steps or even process them with AI support. This would not only improve handling for the funding recipients concerned, but also for the federal, state and local authorities. In addition, more efficient structures can save time and money, which in turn takes into account the responsible use of taxpayers' money.

The funding jungle in Germany has not yet been cleared up. The number of funding guidelines, some of which overlap at state and federal level, remains continuously high - sometimes too high. The heterogeneity is mostly due to the fact that there is no funding strategy and each individual funding body is left to reinvent the wheel or keep the old wheel rolling. For interested parties who do not routinely apply for funding, the search is arduous and the chances of success are not transparent.

In terms of specialised procedures, we see potential for improvement: evaluation, payment and verification of use should become more digital. However, digitalising only analogue processes will not help. Instead, process steps themselves should be rethought and information that is available to the state, for example the extract from the commercial register for applications, should be implemented via register connections. It is even possible to start one step earlier: If guidelines are written correctly - keyword guideline design - searching for, applying for and also processing them becomes easier.
Let's work together to make subsidies smarter for everyone.