Maximizing the Value of Philanthropic Efforts through Planned Partnerships between the U.S. Government and Private Foundations. Prize Philanthropy: The Rockefeller Foundations Accelerating Innovation for Development Program

05/01/2009

Observing innovative models for finding solutions in the private, for-profit sector, the Rockefeller Foundation set out to test whether nonprofits could apply these models to addressing social problems. The foundation found that some private companies issue an open call and offer a reward for developing solutions to a defined challenge. Rockefeller adapted this approach as part of its Accelerating Innovation for Development program, yielding a prize philanthropy approach that encourages nonprofits, researchers, and private business to engage in problem solving together.

Rockefeller supports two kinds of prize philanthropy. The first, known as open innovation or crowdsourcing, offers individuals or groups an incentive to work independently to solve social problems. Rockefeller partnered with InnoCentive, a company that was helping private sector clients utilize crowdsourcing. Organizations working to address the needs of the poor can apply for Rockefeller funding to post a problem on InnoCentives website. Posted problems are viewed by roughly 125,000 engineers, scientists, technologists, and entrepreneurs, who can propose solutions that compete for financial rewards. The nonprofits that post the problems select the solution that best meets their needs. Rockefeller pays InnoCentives posting fee and half of the award for the winning solution (InnoCentive also receives a percentage of the award). The nonprofit organization that posts the problem initially pays the other half of the award, but Rockefeller reimburses them once the solution is implemented successfully.

A second approach, cooperative competition, offers a forum in which competitors can work together. In 2007, Rockefeller awarded a $2.5 million grant to support the infrastructure and rewards for Ashokas cooperative competition program, Changemakers. This online forum enables teams to develop and post solutions to social challenges identified by the communities themselves under the leadership of Idea Reviewerstypically individuals with grantmaking and/or technical expertiseagain with a financial award for the best solutions. The solutions then are open for use to the entire community, which provides new ideas, helpful questions, and connections to resources. Competitors draw on the collaboration to refine their proposals.

Prize philanthropy could have applications in governmental and quasi-governmental organizations. USG frequently combats problems that may be suitable for prize philanthropy. The governments scale and prominence could increase participation, and perhaps effectiveness of the approach. Several USG agencies and foundations have expressed interest in this model, and large and quasi-governmental organizations, such as GAVI and the World Bank, already have sponsored Advanced Market Commitments to place $1.5 billion in advance orders for a pneumococcal vaccine from whichever pharmaceutical company can develop the needed drug first.

Broadening the range of settings in which prize philanthropy is used could also bring new challenges, however. Open problem-development models like the two described here generate many more solutions than traditional approaches, so solution seekers or intermediaries need to develop an easily applied filter that can focus attention on the strongest candidates. Rockefeller Foundation respondents observed that open innovation is most successful when there is a tightly defined problem and clear criteria for the solution, as is typical with scientific and technological problems. Rockefeller is starting to test models with less structured problems, such as policy issues. Adoption of the strategy by USG for policy problems may be premature, therefore, since the method is still unproven.

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