Prize Philanthropy Part II

Holden Karnofsky responds to my Prize Philanthropy post:

I think a prize makes the most sense when the terms are crystal clear and all competitors know exactly what they’re aiming for – as is the case for all the examples you cite.

A prize for "innovation" – without clear terms for what this means – seems unlikely to change anyone’s behavior.

Holden is right. If you look at how X Prize for space flight or the new Google Lunar X Prize works, they are highly specific about what constitutes winning. This format allows anyone to compete without concern that the process is really a popularity contest. On the other hand, many of the problems of philanthropy stem from our inability to quantify outcomes.

I think the big problem in philanthropy today is our inability to define, identify and measure impact; the positive outcomes that philanthropy generates. If I were to create a grand prize for philanthropy, it would be awarded to the person who came up with the best way to define, identify and measure impact. But I don’t think that we can quantify what that outcome would look like the way that Holden suggests.

Meanwhile, reader Suzy asks:

I sometimes wonder about the value we place on innovation. Don’t get me wrong we certainly want to do things as efficiently as possible…but sometimes doesn’t it simply require that we roll up our sleeves and just dig in and do the work?

I’ve heard this from a few different corners recently. I don’t value innovation more highly that other attributes, but I do think it is an area where philanthropy is particularly weak. Given the lack of market mechanisms in philanthropy, having everyone keep doing things the old way without much change is a very sustainable state. Market mechanisms force out players that don’t change with the times. Without the markets working for us, philanthropy must put added emphasis on innovation as a core value.


  1. Holden says:

    The cotton gin wasn’t invented because there was money in innovation. It was invented because there was money in cotton.

    The airplane didn’t come about because of demand for a “new” kind of transportation. It came about because of demand for speed.

    Funding what might work will cause competition to produce the best-sounding idea. Funding what works will cause competition to create the best-working idea.

    I think it’s unnecessary to award “innovation.” Better to award results – innovation will follow naturally.

  2. Innovation for the sake of innovation is pointless. I agree.

  3. Suzy says:

    Thanks Holden. You’ve succinctly articulated the thought behind my comment.

  4. Tesla Falcon says:

    Philanthropy for innovation only benefits when there is a major hurdle to overcome, a mindset that needs changing, or an impossible that needs to become possible. This includes the flight across the Atlantic, the 4-minute mile, and the commercialization of outer space. Market forces are more than sufficient for innovation 99% of the time. It’s that remaining 1% that we need people who’re willing to risk it all: money, reputation, life, etc. to overcome the seemingly impossible technological hurdles as they arrive. This brings us to the topic of timing. Some inventions or prizes are “too advanced” for the people of the day. The defunct Bigelow Space Prize, the Automotive X Prize, etc. are examples of unwelcome philanthropy. We’re not ready for a space hotel yet. People chose power and looks over economy for vehicles in America. Google was smart to ask Diamandis who knows the state of technology and what was on the edge of both doable and potentially commercial what the next prize ought to be. Thus they put together a timely prize that addressed the next 1% hurdle.

  5. Thanks for the comment Tesla. I agree that figuring out how to jump up the curve is more interesting and useful and getting people to try and achieve far out goals.

    However, I think that Philanthropy is beset with “major hurdles” and does not have market forces to help. So innovation is of added importance.