Eye on the Prize

Phi­lan­thropists are in­creas­ingly turn­ing to cash prizes to drive change and solve the world’s great­est prob­lems, write Madeleine Ross and Mar­i­anna Cerini

Thailand Tatler - - CONTENTS -

Fancy mak­ing your­self a tidy sum? Sim­ple. Just come up with an in­no­va­tive idea to cure the world of a prob­lem and chances are good that a phi­lan­thropist will be of­fer­ing a hefty cash prize for it

On the cusp of the Roar­ing Twen­ties, a New York hote­lier named Ray­mond Orteig promised a US$25,000 re­ward for the first pi­lot to fly be­tween New York and Paris non-stop. Orteig’s trans-At­lantic chal­lenge re­sulted in nu­mer­ous at­tempts by busi­nesses and in­di­vid­u­als to achieve the quest, a flurry of de­vel­op­ments in the bur­geon­ing avi­a­tion in­dus­try, and ul­ti­mately Charles Lind­bergh’s piv­otal flight be­tween the two cities in 1927. One of the ear­li­est doc­u­mented awards de­signed to en­cour­age so­cial or hu­man­i­tar­ian ben­e­fit, the Orteig Prize had a last­ing im­pact on the evo­lu­tion of phi­lan­thropy in the 20th cen­tury. A proac­tive al­ter­na­tive to char­i­ta­ble do­na­tions, the cash-prize model gave wealthy in­di­vid­u­als a stronger sense of own­er­ship over their good­will and en­abled them to in­cen­tivise in­no­va­tion in the fields about which they were most pas­sion­ate, be they hu­man­i­tar­ian, com­mu­nity de­vel­op­ment, the arts, knowl­edge or in­fras­truc­ture, to name a few. The Orteig Prize proved also that such awards could be highly ef­fec­tive in stim­u­lat­ing change.

Since the turn of the mil­len­nium, phi­lan­thropy prizes have soared dra­mat­i­cally in num­ber, value and va­ri­ety. A re­cent McKin­sey study of prizes worth more than US$100,000 sug­gests that the ag­gre­gate value of such awards more than tripled in the decade un­til 2009, reach­ing US$375 mil­lion. More than 60 ma­jor prizes have been cre­ated since 2000, rep­re­sent­ing at least US$250 mil­lion in new prize money.

There are mul­ti­ple pos­si­ble rea­sons for the spike. First, the tech boom of the late ’90s and early 2000s cre­ated a new pool of bil­lion­aires, whose wealth is now fun­nelled into a va­ri­ety of prizes. Sergey Brin (Google), Elon Musk (Pay­pal, Tesla, SpaceX) and Amir An­sari (Prodea Sys­tems), for ex­am­ple, are all bene­fac­tors of the X Prize Foun­da­tion, which ad­min­is­ters 17 prizes across the do­mains of space, ro­bot­ics, ed­u­ca­tion, en­ergy, safety and the en­vi­ron­ment.

The X Prize Foun­da­tion it­self might also be re­spon­si­ble, at least in part, for ig­nit­ing this re­nais­sance in prizes over the past two decades. The US$10 mil­lion An­sari X Prize, a com­pe­ti­tion set up by the foun­da­tion in 1996, kick-started the first pri­vate space race and boosted in­ter­est and in­vest­ment in an in­dus­try that had stalled. The tech­nol­ogy devel­oped by the win­ning team also found mul­ti­ple com­mer­cial ap­pli­ca­tions fol­low­ing the com­pe­ti­tion.

Ac­cord­ing to McKin­sey, crowd­sourc­ing so­lu­tions to the world’s great­est chal­lenges have most im­pact when three con­di­tions are met: a prize must have a clear, mea­sur­able ob­jec­tive, achiev­able within a re­al­is­tic time frame; it must be able to draw on a large pop­u­la­tion of po­ten­tial prob­lem solvers; and there must be a will­ing­ness on the part of par­tic­i­pants to bear some of the costs and risks. The 26 teams that com­peted for the An­sari X Prize, for ex­am­ple, spent more than US$100 mil­lion on do­ing so.

The goal of prizes is evolv­ing, too. Nearly 80 per cent of those an­nounced since 1991 have been de­signed to pro­vide in­cen­tives for spe­cific in­no­va­tions rather than to re­ward ex­cel­lence. In ad­di­tion, prizes for in­no­va­tion in ar­eas such as science, en­gi­neer­ing, avi­a­tion, space and the en­vi­ron­ment have grown dra­mat­i­cally, while prizes re­lated to the arts and hu­man­i­ties, which rep­re­sented onethird of to­tal ma­jor prizes in the 1990s, make up less than 10 per cent to­day. This is not par­tic­u­larly sur­pris­ing; tech bil­lion­aires are more likely to be in­ter­ested in science than the arts.

Here we iden­tify some of the key phil­an­thropic prizes to­day, their ob­jec­tives, their suc­cesses and the per­son­al­i­ties be­hind them.

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