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September 5, 2007, 10:17 PM ET
Prizes Versus Grants
Is awarding prizes more effective than traditional grant making? Peter H. Diamandis, chief executive officer of the X Prize Foundation, certainly thinks so.
On a blog entry on The Huffington Post, Mr. Diamandis writes that offering monetary awards to meet specific goals in fighting social ills or solving technological problems is more efficient, more results-oriented, attracts more money from other sources, and imposes less constraints — such as budgets or reporting requirements — on competitors than the usual donation or grant.
“How would you like to make sure that your philanthropic donation was actually used to solve your chosen challenge?” he writes. “Not to fund attempts at a solution, not to fund ideas, but to fund THE solution that would be known in history books as a pivotal moment when an intractable problem was conquered.”
The X Prize has achieved success with such an approach, Mr. Diamandis writes. In 2004, the nonprofit group gave its inaugural award, the $10-million Ansari X Prize, to Mojave Aerospace Ventures for successfully launching a spacecraft capable of carrying three people on a suborbital flight twice within two weeks.
Mr. Diamandis writes that his organization is currently considering offering prizes in “education, life sciences, exploration, global entrepreneurship (poverty), energy and the environment” and he foresees a day when it will have 10-15 awards worth more than $250-million.
Read The Chronicle‘s article on the X Prize Foundation and its president, Tom Vander Ark, who joined the group this year.
What do you think? Is prize philanthropy more effective than grant making? Will such an approach work with societal problems, rather than technological ones? Share your thoughts by clicking on the comments link below.
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