“Why Contests Improve Philanthropy: Six Lessons on Designing Public Prizes for Impact”  from Knight Foundation was released in 2013 and complements a new report “The Craft of Incentive Design.” 

At Knight Foundation we’ve leveraged grantmaking challenges since 2007 to supplement our traditional funding and generate impact in the fields of journalism, arts and community engagement. In May 2013, we highlighted what we’ve learned from more than a dozen open challenges with $112 million in grant commitments in a report, “Why Contests Improve Philanthropy: Six Lessons on Designing Prizes for Public Impact.” Not only did we use the review of our challenge grantmaking to refine our approach, we also saw it as a small step for an emerging field in need of greater assessment and shared learning. DOWNLOAD

“The Craft of Incentive Prize Design” (PDF) by Doblin, Deloitte Consulting LLP Related Press Clipping 

“Innovation Contests With Cash Prizes Attract More ‘Average Joes’ ” in The Wall Street Journal (paid membership required)

That’s why we welcome the release of a new report today, “The Craft of Incentive Design,” which explores the rise of innovation challenges in the public sector over the last five years. Commissioned by several foundations including Knight, the report captures lessons from an increasingly crowded landscape of contests and challenges about how they can be best used to address issues in the social sector. Both “The Craft of Incentive Design” and our 2013 report show how grant prizes and challenges surface ideas, people and organizations that traditional ways of awarding grants often miss. The reports taken together provide a comprehensive guide for organizations that want to create a successful challenge.

“The Craft of Incentive Design” shows several trends, emphasizing that innovation contests are on the rise. The report demonstrates that in the last four years alone, the federal government has administered over 350 prizes and contests across more than 50 agencies. The public and private sectors are using challenges to engage new audiences to tackle important issues from arts funding to innovation in science to community development and disaster relief.

The new report offers lessons that resonate with our work and key takeaways, including:

• Design the challenge with a very clear set of goals to yield better submissions and a stronger sense of community among respondents;

• Identify clear target audiences and messages to inform the approach and channels used to communicate about the challenge;

• Leverage technology platforms to collect entries, guide discussions and expand your ability to manage the challenge;

• Invite outside judges with specific expertise to review submissions in order to promote greater transparency and provide diversity of thought in the review process;

• Measure your impact by setting clear desired outcomes and metrics for success from the start.

As more organizations use challenges the importance of improving how we measure the impact of this alternative grantmaking tool continues to increase. We would like to see greater collaboration by social investors to exchange lessons not only about how to do contests well, but also how much good have contests done. Pursuing detailed information about the effectiveness of contests will help Knight and others better determine when to pull the “challenge lever” versus adopting a different funding mechanism for advancing social impact.

Jonathan Sotsky is director of strategy and assessment at Knight Foundation.

“The Craft of Incentive Design” was jointly commissioned by Knight Foundation, Bloomberg Philanthropies, Case Foundation, The Joyce Foundation, The Kresge Foundation and The Rockefeller Foundation. Doblin, Deloitte Consulting LLP’s innovation practice, produced the report.