Prize Marketplace, or, The Problem with Prizes

Listen to the story from Marketplace

Google and the X Prize Foundation are expected to announce 10 major prizes to spur innovation in the social sector. The big event is on March 3rd at Google. The story from PRI's Marketplace program heralds the return of "prize philanthropy." Peter Diamandis, founder and chairman of The X Prize Foundation, notes that

"A grant may return you 50 cents on the dollar, while a prize will get you a tenfold return on your investment. And you don't have to pay out till the problem is solved."
Hmmmm. There may be some problems with that math when it comes to feeding the hungry. Prizes are great - they do send the message that the question is "when" a solution will be found, not "if." But only those who can afford the upfront costs of participation can, in fact, participate. The prize structure effectively eliminates the poor from proposing solutions to their own problems. How about a prize to solve the prize problem?

I'm looking for the complete list of new "prize philanthropy" examples. Here are some, please send others. We'll build it ourselves, if we must.

DARPA Defense Advanced Research Projects Agency

Google and the X Prize

The H-Prize

Methuselah Foundation and M Prize

BigIdeas@Berkeley

3 comments:

Tidy Sum said...

Great post. Is it me, or is everyone buzzing about prizes these days?

Do you think that in the next 10 years prizes will be part of the toolkit of most new philanthropists?

I think the new breed of donors are a bit ticked-off to find out that the field of philanthropy has never really been about finding solutions to the problems of the world.

A prize is so dang practical.

And prizes are but one of many ways donors can get real. They can be effective for technological solutions, but have yet to be fully tested in the muck of organizations, communities, and nations.

The real challenge that vexes philanthropoids has always been implementation. The social sector is littered with the dead husks of solutions.

I wonder if any of your readers has thoughts on how they might also inadvertently reinforce social inequities that are so entrenched in older models of giving.

PB said...

Problem with prizes is their worth is directly tied to the quality of the organization giving the prize. The "Enron Creative Accounting Award" has probably lost its luster.

Chinwe Onyekere said...

The Robert Wood Johnson Foundation's Pioneer Portfolio is sponsoring the Games for Health competition as its first foray into prize philanthropy. I talk more about this on the Pioneer Portfolio blog, here.
Chinwe Onkyekere
The Robert Wood Johnson Foundation