Mar 11, 2009, 12:17 PM, Posted by Robert Hughes
McKinsey & Company’s recent report on prize philanthropy is a useful overview of the field. Titled “And the winner is . . .capturing the promise of philanthropic prizes”, the report is available here. Kudos to McKinsey for conducting a broad scan of an important philanthropic tool, and to the John Templeton Foundation for initiating the idea, sponsoring the work and sharing it with the field.
Why is this report useful? It puts prizes in historical perspective and explores the reasons for the recent increase in their use. It combines a review of the scholarly literature with insights gleaned from the leading practitioners in the field. And it develops a set of categories that go beyond the useful, but limited, distinction between recognition prizes and inducement (or incentive) prizes. The report’s six prize archetypes point to important traits that anyone considering using prizes should carefully review.
I was particularly interested in this report because RWJF, and the Pioneer Portfolio in particular, has worked with many of the organizations featured in the report. We have worked with Changemakers on a number of competitions, and are continuing to do so. We worked with Hope Lab on the Ruckus Nation competition and with Idea Crossing on its Innovation Challenge for MBA students around the world. And we worked with the X Prize Foundation in its efforts to develop a health prize. These experiences influenced my thinking as I read the report, and prompt two suggestions for future work on prize philanthropy.
The first is to work towards a clearer sense of the boundaries of this field. Prize philanthropy, when viewed broadly (as this report did), covers a huge territory. This makes it difficult to distinguish from a whole host of other strategic (goal-oriented) philanthropic approaches. For example, the report lists four important lessons about how to create and deliver effective prizes (p. 35), but none of these lessons is unique to prize philanthropy; they apply to any type of strategic philanthropic activity.
Another boundary issue is the blurring of philanthropic prizes and business prizes (that is, prizes that have commercial purposes or applications). Prize competitions that require significant capital investment by competitors are usually a poor match for prizes that aim to improve the public good, as most philanthropic activities do.
A last boundary issue involves the definition of “prize.” How does a prize differ, for example, from the Foundation’s programs (most of the Foundation’s work) that make awards based on open competitions judged by panels outside the Foundation? Structurally, such Foundation programs share some characteristics with the X Prize Foundation and Changemakers, and can result in the well-known “brochure effect” – the benefit of a number of organizations undertaking work on a problem as a result of applying to a program, even though they were not selected.
These boundaries and definitions matter, as it is in experience with the specifics of alternative designs that real learning accrues to the field in improving future philanthropic practice. And this leads to my second point . . .
We need much more information than this report provides about risks, difficulties, and failures. The examples of difficulties the report does note – NASA, John Templeton Foundation, and FIRST Robotics - are quite instructive. In our own experience, we learned a great deal through working with the X Prize Foundation in trying to develop a health prize. We came to appreciate the need to have concrete and easily measureable goals. That need suggests that prizes may not work well for targets that involve getting a large number of people making significant behavioral change, as the measurement and validation structure could get quite costly.
Of course, it is easy to suggest what else could be done. But I don’t want to take my eye off the prize, which in this case is that this report does a good job at giving us a current overview of prize philanthropy.