Recently, my friend and long-time mentor Kevin Starr wrote an article entitled “Dump the Prizes,” published here on Stanford Social Innovation Review. I was initially concerned, because in addition to my day job at the nonprofit One Acre Fund, I am on the board of D-Prize. As the name implies, D-Prize awards prizes to social entrepreneurs, and apparently Kevin wants to dump it. Drama? Intrigue? I challenge Kevin to a duel at sundown!
Actually, that may not be necessary. Upon reading the article, I found myself basically agreeing with everything he writes. However, after considering his arguments, I came to the opposite conclusion: We need more prize competitions. We indeed need to improve the stupid competitions out there. But as Kevin points out in his article, there are currently far more applicants than there are prizes to go around. Prize competitions are wonderfully democratic, generally merit-based opportunities for new entrepreneurs to receive funding. I think we could immediately triple the number of prizes and create a lot more social good.
Again, I agree with pretty much everything Kevin writes in his article. He points out that social entrepreneurs waste tens of thousands of precious hours applying for prizes that they will not win. Grantmakers, who seem ignorant of the time that they are wasting, only encourage this bad behavior. Kevin therefore outlines a sort of “bill of rights” for grantseekers. I converted these into three actionable suggestions:
- Grantmakers and prize competitions should stage their application process and have an extremely simple first-stage application. At D-Prize for example, we have a two-page initial concept note and immediately decline 85 percent of applications.
- Grantmakers and prize competitions should publish both the number of applicants for each round and the percentage they accept, and also clearly outline the entire application process on their website.
- At the same time, grantseekers should stop applying for stuff that they have no chance of winning. At One Acre Fund, which serves farmers in Africa, if we see a $10 prize for saving marmots in the Peruvian foothills, we don’t apply. We carefully evaluate the probability of fit, the size of the prize, and our own time constraints. We do our farmers a disservice if we waste our time applying for prizes that are too small or that we won’t likely win.
Kevin is right that entrepreneurs spend far too much time applying for improbable, small prizes. The first two years of a social enterprise are absolutely critical. The entrepreneur is building their initial team and figuring out their program model. The last thing they should do is spend 1,000 hours or more applying for prizes that they cannot win. As Kevin points out, many prizes accept only 2 percent or fewer applications from their pool. The other 98 percent of applicants are for the most part, wasting their time.
But yet, again, I draw the opposite conclusion from Kevin. Based on these statistics, I think there is a rock-solid case for why we actually need more prize competitions. Prizes are wonderfully democratic institutions. New entrepreneurs have no real chance of winning a grant from established funding sources like the Rockefeller Foundation. But you can be a totally unknown, unproven entrepreneur and win a prize based solely on the merits of your vision and your team. I know, because Kevin’s own Rainer Fellows program was the lifeblood of One Acre Fund in its first year, along with Echoing Green, Draper Richards, Stanford BASES, and the Yale and Kellogg business plan competitions.
As a social entrepreneur with many friends who are just getting started in the space, I see a desperate lack of funding in the early stages—and, hence, an enormous humanitarian opportunity for funders. I know several people who have world-changing ideas that could one day affect millions of people, yet they are routinely scrambling for as little as $10,000. Great examples include Penda Health, Access Afya, and Eneza Education.
If I had a few million dollars to go around (by the way, I am happy to help you out if you have this problem), I would explore the funding of early-stage social ventures. We sorely need more prize competitions, together with foundations that make grants to early-stage social ventures. I believe that our field could stand for a tripling or quadrupling of such funding.
Foundations considering prize competitions and early-stage funding should indeed take heed and read Kevin’s article carefully. Giving money away effectively is one of the hardest things to do in the world, and it requires incredible humility and a learning attitude. Such foundations should study at the school of Big Bang Philanthropy—a refreshing cadre of funders that support high-impact, scalable early-stage ventures. This group pays maximum possible respect to those ventures’ time and awards sizeable amounts of funding. The group is doing the best grantmaking on the planet right now, wringing every possible ounce of social impact out of every dollar it gives.
I also hope that Kevin will see D-Prize as exactly kind of the prize competition that our world needs. (If not, we may need to have that duel after all.) D-Prize does not fund innovative fancy new ideas; it funds the implementation and distribution of existing, proven solutions in the developing world. We strive for a humane application process. I admit that we are highly imperfect and still early in our own operations, but we aspire to those ideals and hold ourselves to a high standard.
I agree: Dump the stupid prizes. But let’s triple the rest of them.