Are contests and prizes a distraction, worth little to the social sector? Are they just a “sideshow,” as Kevin Starr, managing director of the Mulago Foundation, describes in a recent article?

Starr raises important points about the potential pitfalls of contests:

They reward the same, well-established people and organizations;

They waste the time of people who apply but don’t win;

They are often badly judged by unqualified people or an uninformed crowd; and

They focus on innovation at the expense of implementing projects with real impact.

Indeed, if you actually ran a contest without a view to these challenges, it’s hard to imagine that anything positive would follow. Starr’s conclusion, however, is that we should avoid these dangers by simply “dumping” the model. That’s where he’s wrong.

Contests are like anything else. There are good examples and bad ones. But that doesn’t mean that we should abandon the whole enterprise. Our recent Knight Foundation report, “Why Contests Improve Philanthropy,” shares practical ways to avoid the traps that Starr lays out. It also highlights the real benefits of effective contests.

Attracting new talent

For Knight Foundation, contests have proved an effective way of discovering and supporting up-and-coming organizations (not just the “usual suspects”) and drawing in creativity from different disciplines. When we first launched the Knight News Challenge, it helped us attract a new community of innovators, software engineers, and designers amid a rapidly changing environment. The digital age turned journalism upside-down, and we realized that our traditional grantmaking, which favored institutions and large organizations, had to change. All of the winners of our recent Open Gov challenge already had their projects underway, but, for a handful, the Open Gov grant was the first funding they had ever received. As Erik Hersman, a winner of the News Challenge and other contests, shared in a recent post on his personal blog, contests are a powerful way to unearth and recognize “new, young, and unknown startups.”

Contests open the door to people who otherwise might never have access; often you have to know someone at the foundation before you even get invited to apply. For example, in Macon, Ga., Knight Foundation supported a neighborhood challenge to invest in resident-led projects for community advancement. About 25 percent of the entrants surveyed indicated that they had never before applied for foundation funding. The openness and simplicity of the contest format changed that. Winners included established nonprofits, as well as college students and young professionals who had ideas for improving their neighborhood.

Supporting those who don’t win

It’s important to minimize the commitment needed to enter contests and educate applicants about the likelihood of winning. At Knight Foundation, we clearly define the entry rules and provide tips on how to complete an application. We also often tier our entry process, asking for only a small amount of information in the first round and requesting more formal proposals at a later stage. We’d love to see more experimentation in expanding value for those who don’t win. One simple thing we’ve done is to spotlight and help promote contest finalists.

In the Knight Arts Challenge, we surveyed non-winning entrants to get feedback on their experience. Forty percent of those who responded said that the process of applying was beneficial; it helped them refine their ideas and identify new partners. (Note: About 13 percent of 2,000 applicants responded). The results are not definitive, but they indicate that we should look beyond the projects that receive funding to determine a contest’s overall impact.

Managing the selection process

There’s little value for anyone when contest applications go through a poorly run selection process. Establishing external review panels with qualified people experienced in building similar types of projects is a regular part of our selection process, and the foundation is transparent about who is involved in the judging. In our recent Open Gov challenge, we brought in 18 advisers—data scientists, government officials, engineers, investors, and staff from other foundations—to provide expertise.

We share Starr’s skepticism about crowd-voting as the sole means of judging a contest; it frequently devolves into a popularity competition, and the organization with the biggest network wins. We’ve experimented with crowd involvement in a limited capacity for the Knight Arts Challenge; we created a short list of smaller arts organization finalists and allowed people to vote for the winner—a People’s Choice Award—by texting. We didn’t use this method to judge large institutional applicants, but rather for smaller community-based projects, with the idea that it would engage residents in the selection process.

Innovating and implementing for impact

It’s easy for grantmakers to get carried away with the novelty of ideas; when you’re sifting through hundreds of applications, the unusual tends to stick out. In the early years of the News Challenge, we focused a lot on whether the ideas were new. However, we’ve adjusted the review process to focus on the people leading the project and the likelihood of broad adoption. We also created a companion fund, the Knight Prototype Fund, so that we can support intriguing, early-stage ideas that often surface during contests with small amounts of funding. This allows the applicants to test their core assumptions before building an entire project. This has helped us calibrate the right balance between innovation and implementation in the News Challenge projects.

Starr is right to call for more critical thinking about choosing when to experiment with new models and to support proven methods of grantmaking. But his criticism of contests misses a crucial point: We should not judge the value of a contest simply by the amount of funding allocated to the winners.

Contests aren’t the endpoint. They’re an important and effective complement to existing programs. Knight contests represent less than 20 percent of the foundation’s grantmaking, but they have affected the way we allocate capital across our programs. They have helped identify and support emerging organizations that we’ve often supported with follow-up funding. They have helped build new communities of support and highlighted trends that we’ve accelerated through our regular initiatives.

Starr’s column has kicked off a useful discussion about contests, and he has clearly tapped into some of the frustrations and bad experiences people have had with competitions. He writes that “it’s high time” to take a look at the real impact of contests. We agree, and we’re committed to examining how to improve them. We’ve already evaluated many of our contests and shared these reviews publicly (scroll to the bottom of the linked post for more). These studies aren’t perfect, but they’re a good start, and they’ve prompted us to adjust the way we run our challenges.

Contests have been around for a long time, and they aren’t going away. Promoting transparency and discussion about what good contests look like will make them better. That’s something that will benefit everyone—the applicants, the funders, and the communities we all serve.

Read the original post, ”Dump the Prizes,” as well as other responses to the same post: ”Dump the Stupid Prizes, Multiply the Rest” and “Prizes and Challenges Matter for Development.”