Part 1: Prizes, Initiatives, and Funds

For nearly six years, we’ve been working with individual grantmakers and funder collaboratives to develop and implement strategies to support nonprofits in strategic restructuring. There are three primary strategies: prizes, initiatives, and funds. We’ll share a little about each of these in this three-part blog series throughout the coming month.

Three Ways Funders Promote Collaboration

For nearly six years, we’ve been working with individual grantmakers and funder collaboratives to develop and implement strategies to support nonprofits in strategic restructuring. There are three primary strategies: prizes, initiatives, and funds. We’ll share a little about each of these in this three-part blog series throughout the coming months.

Prizes

The Collaboration Prize, awarded by the Lodestar Foundation, is the granddaddy of all prizes designed to promote the use of strategic alliances and restructuring. We began working with the Foundation in 2006 to research the use of prizes by foundations and to design the prize, which was offered in 2008-09 and again in 2010-11. Part of the genius of the Collaboration Prize was that it was a means to a bigger end. The $250,000 in cash awards was large enough to attract national attention and raise the profile of “collaboration,” and the Lodestar Foundation used that higher profile to spark conversations with other funders around the country about the benefits of promoting partnerships. The Prize also generated several hundred applications, each of which told a story of the way in which two or more organizations joined forces to create better outcomes. The Foundation recognized that these stories could inform and inspire other nonprofit leaders as well as funders, so they ensured that the applications would be available in a searchable database (hosted by the Foundation Center) that can also be expanded over time through user submissions.

Modeling that national prize, a group of funders in Colorado launched a statewide competition in 2011 in partnership with the Colorado Nonprofit Association. The Colorado Collaboration Award, including a cash prize, is still being offered in 2013. As with the Collaboration Prize, the Colorado group has created a searchable database of prize applicants and gathered other resources to inform organizations interested in pursuing collaboration.

In Minnesota, the Bush Foundation took a different approach, using InCommons as the platform for its prize, offered in 2010. The InCommons Collaboration Challenge was targeted to Minnesota-based groups working together to solve local problems. The winner was determined by online voting and received $25,000 to continue, replicate, or expand their efforts. The prize has not been renewed, but the Bush Foundation continues to use InCommons to generate local conversations in the state about working together to meet emerging challenges and opportunities.

Prizes can be a powerful tool for raising awareness, changing perceptions, identifying best practices, and recognizing excellence. But designing and delivering prizes is also hard work. For grantmakers and funder collaboratives, we recommend consideration of the following pros and cons.

Pros

• Raise the profile of an issue/problem ·
• Lift up models, creating a demonstration effect with the potential to surface new ideas and initiatives ·
• Attract new talent and funding to tough challenges, increasing the chance that a breakthrough innovation will result ·
• Shift risk away from funders to competitors; only the most successful ideas or projects win
• Potential to build a broader network with competitors, judges, and a wider audience

Cons

• Highly staff intensive requiring substantial commitment of human resources ·
• Prizes require investment in planning, administering, promoting, delivering, and funding the award—all large ancillary expenses that do not go directly to problem solving ·
• Nearly all awards struggle for recognition; attention is hard to come by ·
• Impact may be short term or unsustainable (after the prize, what next?)
• Prizes may identify innovations that can’t be sustainably funded

We welcome your comments about the efficacy of prizes as a strategy to promote nonprofit collaboration. Also, watch for our next post in this series, which will feature funder initiatives.