How Foundations and Non-Profits are Utilizing Challenge and Prize Based Open Innovation

Posted by Steve Bonadio on Jun 27, 2013 3:09:51 PM

The increasing number of nonprofits exploring open Challenge programs and prize competitions led us to host a recent webinar titled, Challenging the World to Take Up Your Cause: Why Foundations and Nonprofits like Lumina Foundation are Harnessing Open Challenges and Prize Competitions. This webinar, which featured Kiko Suarez, Vice President of Communications and Innovation at Lumina Foundation (an InnoCentive client), and InnoCentive Director Siobhán Gibney Gomis, demonstrated how a well-designed Challenge can result in game-changing impact for foundations/nonprofits and their missions. You can view a replay of the webinar here.

There is certainly a time and place for Challenges as a tool in the nonprofit innovation toolbox – so when and where is it? The short answer depends on the stage of the innovation cycle you are in, and the situation you are in:

At the beginning: You’re starting to address a complex problem and want to consult the crowd on how to get started or a viable direction in which to head.

The Community Foundation of North Louisiana ran an Ideation Challenge looking for ways to tackle the problem of elementary (primary) school reading scores that were lower than standards in the rest of the country. Nearly 800 Solvers participated in the Challenge, and afterwards, Executive Director Paula Hickman of the Foundation was "elated to receive so many quality responses from so many corners of the world. A surprising aspect was that the educational challenges we face in our corner of Louisiana seem to be universal." The Foundation is now headed in the direction of the winning solution, forming a collaboration with several other organizations to implement the idea.

In the middle: You don’t know what the solution is, nor who is best placed to solve it.

The Chordoma Foundation sought to find cell lines that could be used for research. The problem was that there were very few scientists focused on this disease. Explaining why the Foundation decided to tackle this problem with a prize program, Executive Director Josh Sommer explained: "We had $100,000 to work with. That would have been enough to fund 1-2 labs to attempt to develop chordoma cell lines. But it was not at all obvious who to fund. Instead, we wanted many labs to try their hand at developing chordoma cell lines; the more attempts, we thought, the more likely that at least someone would succeed. Because creating a cell line is a very clear deliverable and many labs are equipped to develop cell lines, we thought that a prize might just spur some labs to try." Guess what? It did!

Later on: You’ve been struggling for a while and need a set of fresh eyes (or 300,000 sets of eyes!).

Exposing your problem to a bigger and broader crowd beyond the “usual suspects” is a good response when progress is stagnating. The Extraordinary & Unorthodox Philanthropy Challenge attracted over 1,000 Solvers and sought novel, unorthodox, and extraordinary opportunities for philanthropic investment. The Seeker Champion outlined: "We certainly received a greater number and wider variety of ideas than through our alternative sourcing methods. We were thrilled with the winner of our first Challenge, and I don’t believe we would have found each other but for the InnoCentive Challenge. It definitely allowed us to reach beyond our network and philanthropic circles from which we usually source ideas." The winner of this Challenge, GiveDirectly, has since attracted millions of dollars in additional funding, including a $2.4 million Google Impact Award, and received a top rating from charity evaluator GiveWell.

Now that we've outlined the 'when' and 'where', the next logical question is 'how'? Here are three first steps, each with a top tip:

  1. Identify the problem area: Area means the high level vision of what you want to tackle, but you don’t necessarily have to fully define the problem in depth. Here's a tip: Use insiders AND outsiders to help identify your problem. Partners, stakeholder engagement, and exercises like workshops can help you with that. Perhaps you need to talk to leading technical experts, government regulators, or innovators on the ground. These perspectives can help you understand, assess, and articulate the problem area better.
  2. Define success: Success means the outcome you want from a Challenge, rather than what the perfect solution looks like. Think particularly about the type of outcome you want from this – new partners with whom to work? Early ideas that you can develop further? Prototypes? Here's a tip: Don’t expect silver bullets. Solutions are most likely not going to be ready to implement as soon as you get them, straight out of the gate. Batteries not included: you need to help reintegrate these ideas into existing systems and help put these solutions to work.
  3. Choose partners: Think about similar minded organizations or corporate sponsors to share the cost (and risk) of the project; marketing experts to maximize the buzz and brand awareness that a Challenge can bring; and innovation experts to design and facilitate the execution of the program – which should have a good platform, people (network), and processes. Here's a tip: Consider partnering with organizations that have complementary expertise/clout. Would you benefit from partners that appeal to a different market/audience? For example, in our recent webinar, Kiko Suarez outlined that Lumina Foundation chose to partner on their InnoCentive-hosted Quantified Work Challenge with The Economist for their standing in the business world.

Here are a handful of bonus tips. You'll also eventually need:

  • A Champion who is passionate about the Challenge program (maybe that’s you?)
  • A CEO that 'gets it' and is supportive
  • A dedicated slice from your mission related budget (this doesn’t have to be a big slice - remember that Challenges can be a complement to larger grant programs)
  • To involve your legal team early on – contracts and prizes might require adaptations to your current frameworks
  • To identify a pilot program to generate excitement/buzz and quick wins

Again, feel free to view the webinar replay and contact us if you'd like to learn more about launching your own Challenge program.

Authored by Harry Wilson, Program Manager at InnoCentive

Topics: Innovation Insights, Challenges

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