I recently attended Bloomberg Philanthropies’ Mayors Challenge Ideas Camp, where representatives from 21 cities (all finalists) convened with city innovation experts for a two-day workshop to strengthen their social innovation ideas and vie for the opportunity to win up to 5 million euros. To me, Ideas Camp exemplifies how competition design has advanced considerably over the past several years. The criticism of competitions is oft repeated; some have even suggested doing away with prizes and challenges as a tool to drive innovative solutions to social problems. But I believe these criticisms are shortsighted and that prizes are an under-utilized tool for helping organizations build lasting social innovation capabilities. Viewed broadly, prizes are not simply a means to crown a winner, but a powerful and successful approach to building a community of innovators focused on pressing societal issues.

Over the past five years, three core elements critical to the successful development of social innovations from prize participants have emerged from experimentation by prize designers:

1. Motivation: It’s not about purse prize, but skill and community building.

One element of recent, successful prizes has been coaching, mentorship, and training. Specifically, designers have made it possible for prize participants to develop new skill sets (such as advanced problem solving, communications, and network organization and mobilization skills) and apply them to issues beyond those featured in the competition. The Mayors Challenge Ideas Camp, for example, teaches frameworks for city-focused innovation; features group activities designed to help participants develop powerful, implementable solutions for major city problems; and offers innovation coaching for cities throughout the competition. This gives participants a core level of innovation expertise and a set of tools to address other municipal challenges.

Another example is the Obama Administration’s Strong Cities, Strong Communities (SC2) initiative, which provides technical assistance and access to federal agency expertise; this helps US towns, cities, and regions advance their economic agendas by enhancing the capabilities of local governments.

Designers are also building broad communities of motivated solvers around specific issues that enable long-term collaboration. For example, NASA’s Zero Robotics Challenge, which encourages high-school student STEM engagement, requires teams to form alliances, thus fostering community building among the larger body of participants. The challenge is now an annual event across the United States and Europe, with a number of teams regularly participating.

2. Structure: Use multiple rounds to shape multiple winners.

Leading designers are now engaging in the use of multiple-round prizes and challenges. This approach provides the opportunity for participants to iterate on their submissions with judges, coaches, and subject-matter experts, increasing the sophistication of all participants. The use of multiple rounds also permits down-selection, or elimination of weaker solutions, refinement of the best ideas through feedback from coaches or judges in later and final rounds, and increased potential for an implementable solution.

For example, the 2012 Provider Enrollment Screening Challenge Series, which sought to reduce Medicaid fraud and improve access to healthcare for US citizens, consisted of 124 separate rounds or mini-competitions to improve the likelihood of a workable, well-designed solution. Equally important, the designers were able to mobilize a community of more than 1,600 participants from 39 countries. Creating a challenge structure that involves large numbers of participants is especially beneficial for complex issues such as healthcare technologies, where developing a powerful solution exceeds the capability of any one individual or team.

3. Evaluation: It’s about the prize legacy rather than a short-term publicity splash.

Prize and competition designers are also doing more than choosing a winner. They are building robust evaluative techniques into the prize components so that the innovation- and community-engagement capabilities developed by participants last well beyond winner selection. In some cases, community engagement is a formally evaluated requirement for prizes and challenges such as the Georgetown University Energy Prize. This prize includes evaluation of how participants demonstrate success in engaging their communities, local utilities, and municipal government. It also paves the way for future participants and energy-efficiency advocates by including a K-12 school system and broader community educational component.

These are just a few examples of competitions that can offer social innovators long-term benefits and support. Given the increasing sophistication of prizes and challenges, I encourage more entrepreneurs to join in.