When the X-Prize foundation offered $10 million to anyone who could develop a viable commercial spacecraft, it didn’t just send innovators scurrying, and it didn’t just grab headlines. It also began the next big trend in philanthropy. Donors are in love with prize philanthropy, Portfolio reports, and causes are ditching grants in favor of open contests, hoping to spur innovation.
Competitions are great at drawing resources. X-Prize believes competitors spent a combined $100 million trying to capture its $10 million prize. They’re also great press. “Can I tell you that more children are being fed somewhere…because of a Changemakers competition? No,” said one sponsor. “But if you believe that change comes from making more people aware of a problem,” then they have an impact.