You bring up some very important points, and I mostly agree with you.

1. The benchmarking issue in my mind is the central one when it comes to prizes. Not all problems are really appropriate for prizes, but it’s my belief that some (such as cancer) can be brought into the prize-amenable realm if (and only if) the benchmarking issue can be addressed. As I see it there are three parts to this: (1) Problem/goal definition: what is cancer, and how do you define a “cure”? (2) Measurement: how close are we to the goal, and has the goal been achieved? (3) Credit: who gets what share of the prize?

Without getting too philosophical or too deep into the science of cancer, I feel that a priori consensus on any of the three parts (but especially the first) is not only impossible, but also speaks to why there has been no real progress on a cure. Namely, the nature of the disease (possibly diseases) is so complex that to attempt to define it and to put a stake in the ground is doomed to presupposing the approach that will cure it. And since the whole point of a prize is to incentivize radical new approaches, this would defeat the purpose. Measurement has a derivative conundrum in that without clear definition, what are you measuring?

However, just as these types of issues did not stop the Supreme Court from ruling on pornography, I truly believe that if we let go of the notion of an a priori definition and measurement strategy, we can proceed with a prize annuity fund approach as outlined here,

http://rafefurst.wordpress.com/2008/03/11/x-prize-annuity-funds/

leaving the matter to the philanthropists themselves to “know it when they see it”. I realize that there are countless objections that might be raised, but ultimately the only things that matter are (a) whether the philanthropist believes his goal has been achieved and (b) the prize award process is legal and fair (i.e. nobody has been mislead into doing work under false pretenses). To those who still have objection, I say, great, the more approaches the better. If someone wants to come up with an a priori benchmarking methodology for cancer (say), and can build a large prize around it, how can this possibly be a bad thing? Especially if there’s a “wisdom of the crowds” approach (like the one I propose) in addition.

—

2. I’m not familiar with AMCs, can you elaborate? Also, what are some other new models?

—

3. Amen. The X Prize Foundation has done an incredible job on this front. I see that you are a part of that organization. Do you guys have plans to extend your mission beyond the current model? In my way of thinking, if the X Prize Foundation were to adopt the annuities fund idea, I would be very happy.

—

4. am torn about this last statement because on the one hand I agree with the notion that knowing what issues need solving (such as conflicts of interest) and what tools are being brought to bear on those issues (such as an incentive-aligning prize) is important. On the other hand, rarely is it the case that we add value by doing more than commonsense analysis — analysis that all stakeholders can follow easily. The beauty of the original X Prize was its simplicity and attractiveness for those who would try to claim it. If the rules were complex and if there were lots of caveats to eligibility and the award process, nobody would have worked on the problem. Ideally what we need are ways to obviate deep analysis and remove barriers to implementing new philanthropic approaches, and let the market do its magic.

For those less familiar with traditional grant making, the scene looks vaguely familiar to a casino floor. Program Officers crowd around a table, placing their bets on research and new “initiatives.” Each has a system, but from afar it looks a lot like a roulette table. So many small bets on black or red, and the occasional inside bet on a single number that attracts attention and builds some outside interest. When you tally the results, there are too few instances of real outcomes (e.g., successes in cancer treatment are poultry compared to the level of philanthropic investment over the past 60 years), and we assume that the house has an advantage.

However, it’s not so simple. Those making the “bets” in philanthropy have tremendous influence over the rules of the game, and their experience – albeit often intuitive – is not to be underestimated. We need to roll up our shirtsleeves and find the most effective ways to build and proliferate effective tools that help these experienced players perform better.

Here are some basic ideas for discussion:

1. We need a dominant design for benchmarking results in and across the many philanthropic verticals in which grants are made. In softer sciences, these tools are debated and discussed ad nausea, but there is not enough effort to build consensus around metrics and to use them to compare results. Too much effort is spent debating the shortcomings of even the most well articulated tools. If we can put a stake in the ground and claim a standard – even one that is not yet perfect – we can do a much better job of building best practices and generating momentum around innovative solutions.

2. We need to find those models that speak to the need for more “leverage” (as called for by New Philanthropists) and put them in the hands of common practitioners. For example, the use of PRIZES to harness the power of competition is getting a lot of attention (as it should), but Old Guard grant makers are reluctant to experiment with the model, instead choosing to back “lifetime achievement awards” or “idea competitions” (versus contests guaranteeing proof of concept). These and other models, such as Advanced Market Commitments (AMCs), need greater traction.

3. We need better marketing. Philanthropy will not be fixed overnight; so, if we have to deal with anecdotal success stories, let’s at least make them compelling and broadcast them to the general public. If we can get the basic set of ideas that are available TODAY on the table, then we can begin to chart our progress (both practically and ideologically).

4. We need more experimentation. If there were some incentive for grant makers to fail more frequently, to bet on ideas with great potential for success and relatively lower probability of returns, then we could cast a wider net and invite more mavericks to join. In sectors, like the Internet, where failure is considered a learning experience (and highly valued) there is a great deal of innovation. Similarly, philanthropists should be prepared to make long bets and to justify those decisions in pursuit of innovation.

By no means is this an exhaustive list (I hope that you will add to it), but – again – I think that the discussion needs to move towards a better analysis of what issues need to be resolved and what tools need to be put in place to make progress.