According to a new report from McKinsey & Company's social sector office, the use of prizes — and the money and recognition that come with them — is experiencing a renaissance in the nonprofit world and helping to spark innovative approaches to solving social problems, the Chronicle of Philanthropy reports.
Funded by the John Templeton Foundation, the report, And the Winner Is...Capturing the Promise of Philanthropic Prizes (124 pages, PDF), found that prizes for philanthropic-minded efforts have been increasing both in number and in size, and that a growing number of sponsors are funding prizes that address a broader range of issues than in the past.
The report's authors attribute the boom in prize philanthropy to several factors, including the high profile of prizes created by venture philanthropists, entrepreneurs, and others who believe advocacy and grants have not been sufficient to solve certain social problems; new attitudes among social entrepreneurs to "shifting risk"; the networking characteristics of Web 2.0 technology; and growing interest in the potential of collaborative, open source approaches to combating poverty and other large-scale social problems.
The report tracked 219 prizes worth $100,000 or more and found that the total funds available through "big purse" prizes had more than tripled over the past decade, to more than $375 million. About sixty of the prizes had been created since 2000, while approximately seventy of them were funded by corporations, including Google and Progressive Insurance. The report also found that large prizes have been shifting away from the arts and humanities to newer areas, including aviation and space, climate change and the environment, and science and engineering.
While even larger prizes may be on the horizon, the report's authors warned that the growth in prize philanthropy has resulted in significant overlap and that quantity doesn't always signal quality. In most cases, the effectiveness of a prize was found to be due to a well-considered strategy, not the size of its purse.