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Despite recent reports, American Idol-style grantmaking is not new to the nonprofit sector. However, it is new enough that we still lack evidence on whether this unconventional process facilitates long-term benefits or detriments for modern philanthropy.

Late last week, Kiersten Marek at Inside Philanthropy wrote:

Philanthropy is getting a little more like the reality show Shark Tank and Cupcake Wars. Nonprofits can now perform like contestants on a game show to win their dough.

Marek’s piece documents the case of “Pitch It! The Innovation Challenge 2014,” hosted by the Greater New Orleans Foundation (GNOF) in partnership with the Kresge Foundation and Chevron. According to “Pitch It!”, “By pushing current thinking, practices, tools and approaches, we believe organizations will further their capacity and effectiveness.” In awarding the top three finalists with seed money prizes of $25,000, $7,500, and $5,000, the GNOF hopes to foster competitive, innovative plans with meaningful missions and objectives. This year’s $25,000 winner, the Second Harvest Food Bank of Greater New Orleans and Acadiana, developed an idea to combat community hunger with “aquaponics hotspots to grow organic and sustainably cultivated food.”

The one issue with Inside Philanthropy’s coverage of the event dealt with the assumed novelty of this grantmaking style: “And because we’ve never seen anything like it elsewhere, we’re still trying to digest what we think of this.” The issue here is that we have seen this type of grantmaking in modern philanthropy - plenty of times! In particular, many cities and universities across the country are holding innovation summits, where groups and organizations compete for cash prizes with pitches explaining how their ideas are aimed at bettering their communities.

Often called “hackathons” (a name deriving quite directly from computer program collaborations; note: I use the name “hackathon” narrowly, applying only to cause-“hacking”), these meet-ups occur at the nexus of innovation, philanthropy, government, and civic organization. At the global scale, some point to “Random Hacks of Kindness” – an initiative between tech giants, NASA, and the World Bank. At a more local level, we could look at colleges – like Georgetown University – and their yearly Hackathons. Without a doubt, GNOF’s contest imitates the hackathon model, viz. groups collaborating and competing to use innovative strategies to achieve beneficial outcomes for the community (e.g., the first-place winner at Pitch It! used Aquaponics to take on hunger, the second-place winner used a texting program for crisis assistance, and the third-place winner used an online platform to develop a mentoring program).

Closely related to the broad idea of “innovative philanthropy,” these innovation “contests” for philanthropic ends crowdsource strategies, methods, and processes. Providing a technical look at philanthropy “contests,” a report published by the Knight Foundation offered six benefits to “designing public prizes for impacts”:

1. Contests bring new blood and new ideas. 2. Contests create value beyond the winners. 3. Contests help you spot emerging trends. 4. Contests help you change your routine. 5. Contests go hand-in-glove with existing strategies. 6. Contests should thoughtfully engage the community.

However, it is entirely plausible for familiar objections (like the criticisms of crowdsourcing and strategic philanthropy) to be similarly applicable to contests. Perhaps what Knight labels “chang[ing] your routine” sacrifices developed institutional efficiencies and effectiveness. Maybe democratizing idea making leads to less-qualified implementation. These are just some of the possible weaknesses of the “contest” approach.

Inside Philanthropy calls these contests “the latest in gimmick philanthropy.” As these contests continue to spread throughout the nonprofit sector, we will learn whether the speculated benefits and detriments noted above are realized, or if they remain merely hypothetical.

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