Prizes Increase as Mode of Giving

In recent years, more charitable foundations have been setting up prizes as a means of giving, often creating incentives for new research in a given field. A recent study indicated that “inducement-style prizes that focus on achieving a specific, future goal” have increased to $375 million per year, thanks to the founding of prizes, such as the Kravis Prize founded by Henry and Marie-Josée Kravis, which this year honors Pratham, an education organization for children in India. “There’s an increasing recognition that setting up prizes is a good way to spur innovation and bring about the outcomes they want,” said Tom Riley of the Philanthropy Roundtable. Still, the creation of this type of incentive is complicated and often expensive, and in some cases is considered less effective than more traditional modes of philanthropy. “It’s trial and error,” Mrs. Kravis said of past experience with the Kravis Prize. “You’re not going to hit a home run each time.”