Market externalities and inefficiencies affect the model of funding adult learning (AL), generating the misallocation of increasingly scarce public resources. There is an immediate need to define mechanisms for a sustainable allocation of public resources to fund public goods like AL. On the current course, public debt in the euro area is projected to reach 100% of GDP by 2014 (Statement Euro Area 2009 COM (2009) 527): this imposes discipline on public budgets and efficiency for publicly funded AL and VET. GIFTED aims to 1) pinpoint possible inefficiencies of public funding of AL; 2) develop, test and validate an innovative funding model; 3) disseminate this innovative model. Main results of the project are A) an analysis of inefficiencies of current funding models for AL at EU level and selected Member States; B) a validated version (through financial stress testing) of the innovative funding model designed to pool public and private capital into a revolving fund to be managed according to market rules to finance AL as a public good. GIFTED will establish incentives to behave for the participants in the system and address these externalities to i) ensure sustainability of public funds devoted to AL; ii) facilitate access to finance for AL providers, i.e. soft loans to develop new curricula, renovate facilities; iii) facilitate access to financing SMEs and AL beneficiaries, i.e. grants, matching grants, soft loans; and iv) establish strong and transparent incentives to mobilise private investments and the establishment of positive public private partnerships to finance AL. GIFTED will establish virtuous systems to mobilise private and public funds in a sustainable manner to efficiently respond to contingencies of the labour market and needs of AL. The model will be designed to be flexibly adjusted to specific European, national and local needs and realities. GIFTED will produce an immediate positive impact to ESF and national budgets allocated to AL, preventing the free-riding often associated to public funding.