When Lever for Change launched five years ago, prizes of more than $10 million were relatively uncommon. That has changed: a growing number of philanthropists are employing challenges, prizes, and open calls to make larger awards more quickly and more equitably than previously established forms of grantmaking.
One result is that prize designs have improved; at Lever for Change, we do our best to learn from other, often ingenious, efforts of our peers, and to share what we are learning with others. Much of our feedback comes from the organizations that participate in our open calls and challenges.
I wanted to share my appreciation for the way that Lever for Change is delivering the Build a World of Play Challenge scoring and feedback. Communication and feedback through the process has been incredibly efficient and thorough. In all my time as a fundraiser, I have never received such detailed feedback on an application, let alone at such an early stage in the process. It shows that both Lever for Change and [the sponsor,] the Lego Foundation respect the time and resources that organizations have put into their application.
Gabby Atwood - Partnership Development Lead for Action for Children.
Applicant feedback like this drives our processes at Lever for Change. A collaborative approach is central to our brand of philanthropy: we know that today’s problems may be too big for any single entity to take on. Like those committed to prize philanthropy, we believe good ideas can come from anywhere. We keep our eyes on prizes and new approaches to challenge design and management that can move more funding to better projects faster than traditional philanthropy. Building from a study our colleague Yoon-Chan Kim authored in 2022, we’ve continued scanning the landscape for innovative prizes and competitions. By sharing some of the best practices we’ve seen, we can continue improving on competition design and move the needle on critical social issues together.
We have identified five general trends in prize philanthropy since our launch, shared not only by Lever for Change challenges but also numerous other prize entities:
1. Few prizes exceed $10 million, but there are more of that size now than ever before.
When Lever for Change launched in 2019, even one-million-dollar awards were unusual. For years, funders had talked about making fewer but larger grants. Yet, even in 2022, the average grant by the average foundation with $1 million to $500 million in its endowment was just $28,000, according to The Foundation Source's 2023 Report on Private Philanthropy: Giving and Investment Trends within Private Foundations. That’s not true in prize philanthropy, where awards of $10 million to $100 million are increasingly common.
2. Most donors rely on outside services to manage prize administration.
Relying on outside expertise to professionally manage prize delivery is increasingly common. Carrot, XPRIZE Foundation, Challenge Works, and Lever for Change stand out as top administrators for large-scale prizes, as of 2023. At Lever for Change, we facilitate a number of challenges for a variety of donors including high-net worth individuals, donor collaboratives, and foundations.
3. Technology is central to prizes.
Larger prizes are often associated with living donors from the tech sector. Jeff Bezos, MacKenzie Scott, Melinda French Gates, and Elon Musk have all announced large prizes or prize programs above $10 million, as has Google.org.
4. Challenges continue to build momentum for the causes they seek to serve.
Prizes allow the philanthropic ecosystem to find additional ways to increase awareness and collaboration about the very issues they work on. Many challenges host events or continue to raise money for the cause. At Lever for Change, our Bold Solutions Network is a growing global network of highly rated organizations sourced across our challenges that are well-positioned to secure additional funding, amplify their impact, and accelerate social change. We consistently share information about our members with other donors looking to fund in these areas.
5. The credibility of prize awards can be improved by ensuring the judging process is clear and transparent, and by carefully selecting judges. Donors who fund prize competitions must offer incentives to participate, including giving applicants a fair hearing. A judging process that is open, provides valuable feedback, and is endorsed by respected individuals serving as judges can help with this. At Lever for Change, this is central to every challenge we manage.
These trends showcase just how prize philanthropy can be responsible philanthropy, especially when it is thoughtfully designed. We are proud to work with so many donors and organizations to continue building out challenges that are inclusive, equitable, and effective. If you would like to work with us on designing your next funding challenge, contact us today and find out how we can help you achieve your philanthropic goals.
For deeper illustration of these trends across last year’s landscape, below are nine prize profiles in the categories of those awarding above $10 million, as well as those between $5–9 million.