I remember the first time I was exposed to the fact that NASA gets less than 1% of the federal budget, and the suggestion that we could do so much more awesome stuff if NASA just got 1% of the budget like it used to. I was 16 at the time, and I was in my freshman year at BYU. I was so fired-up by this idea that I used the idea as the topic for a persuasive writing essay for my Creative Writing class I was taking that semester. The sad thing is that in the 17 years since then, the Penny for NASA arguments have gotten no more convincing than my paper (which probably only earned me a C+).

My biggest beef with the Penny for NASA concept is that I think NASA is doing a lackluster job of effectively spending its current ~$17B/yr. There are not so far-off technologies that could slice the cost of deep-space manned missions by 2-5x, but funding for those technologies are getting starved, while most of the money gets sucked-up by politically untouchable mega-projects. If NASA’s budget were doubled, Congress would probably run out of excuses, and send some money towards technology development and demonstration, but that funding would also likely be the first to get cut if NASA’s budget were ever reduced in the future. And seriously, who here thinks that if NASA’s budget were doubled it wouldn’t be come a lightning rod for cost cutting in the future? No, I’d rather see NASA more effectively spend the money it has, and is somewhat likely to keep, than hoping for solving all problems by shoveling more money at the agency.

What I think would be a more useful spending goal would be to advocate for spending at least 1% of NASA’s budget on prizes, such as the ones that have been run by the Centennial Challenges.

You’ve heard the benefits of prizes before, but to reiterate:

Prizes only reward success, not effort. Far too much of NASA’s money is spent in a way that does not guarantee the taxpayer gets anything in exchange for huge investments. Far less of the money and effort associated with winning a prize is spent satisfying bureaucratic requirements/oversight than with even COTS-like contracts. There are some regulations such as FAA regs that have to be followed, but the overall percentage of prize efforts spent on hardware/operations versus paperwork is much more optimal. Well-structured prizes often help encourage multiple players in an industry even after the prize is completed. Prizes encourage creative, out-of-the-box solutions that might have been rejected by a selection committee for normal funding. Prizes can often encourage non-traditional players to compete. Prizes are often more exciting and engaging for the public than similar traditionally funded technical efforts. Prizes can often get ego-capital investments into risky new technologies that might not have happened based purely on financial merits.

That said, prizes don’t solve all problems, I’ll be the first to admit that. Prizes don’t guarantee that people will be able to raise the money to pursue them for instance. Especially when the prize value is too low compared to the likely cost to complete it, and when there’s no clear near-term commercial follow-on opportunity. Prizes tend to attract for more teams than it attracts credible teams. Of the something like 20 X-Prize teams, I think that Armadillo was the only other semi-credible team other than Scaled, and they were way behind Burt Rutan’s team. Of the something like 15 teams competing in the NGLLC, we did better, with about 5 pretty serious teams by the end (in addition to the two winners, Unreasonable Rocket, TrueZer0, and Paragon Labs all at least built and had stable tether tests with vehicles that could’ve won the prize with another year of practice and refinement). No comment on GLXP.

But while there are definite tradeoffs with prizes, it’s also pretty clear that they’re getting woefully underfunded compared to the rest of NASA’s spending priorities. At its best year, I think Centennial Challenges came close to getting 0.1% of NASA’s total funding, and most years it has received significantly less than 0.05%. While I agree there is room for debate on how effective prizes are compared to traditional contracts, I’m pretty sure nobody seriously thinks that they are 1000-2000x less effective.

So, I propose the idea of setting aside 1% of NASA’s budget for prizes.

Really, in the grand scheme of things, a 1% tax on other NASA programs wouldn’t be felt by most of them, only the programs that have been hit the most with spending cuts (like Planetary Science) would likely notice them at all. And having a pot of $170M per year for prizes would enable a wide range of prizes that NASA has so far been unable to even offer, including prizes related to technology development/demonstration capabilities they’d like to fund, including: reusable launch systems, nanosat launch, microreturn vehicles, interplanetary cubesat missions, Lunar/Asteroidal/Mars/Venus sample return and/or ISRU demonstration, cryogenic propellant storage, handling, and transfer technologies, deep-space human spaceflight issues (like radiation protection, artificial gravity, etc). When you’re only getting $4M/yr or less, you’re stuck with either funding prizes for really tiny efforts, or badly underfunding prizes for slightly bigger (but still quite small) efforts.

Here are a few suggestions I’d have for making this better funded Centennial Challenges program more successful:

Place a cap on the fraction of the budget that can be spent on administrative personnel. I’d suggest say 5%. 5% of $170M still works out to over 40 full-time support staff. Setup Prize Manager positions in the Centennial Challenges program in a method similar to how DARPA handles Program Managers, where they are only brought on for a set period of time (typically about 3 years). Encourage bringing people on from academia, industry, and military space, not just NASA employees. This encourages more diversity of thought and cross-pollination, while also decreasing the ability for people to empire-build. Make prize winnings tax-exempt (I’m not sure if they already are, but they ought to be–that’s one way of making them more lucrative that doesn’t cost much extra money). Set aside some money for paying the partnering groups that run the prizes. I’d still limit this to no more than say 5-10% of the total budget. But providing some financing to the prize groups would mean that the prize groups wouldn’t be spending so much of their time trying to raise money for themselves instead of running the prizes effectively. It might also be worth setting aside one last 5% of the budget for media/promotion of the prizes and teams. If the prize organizations aren’t having to raise money to cover their own cost, and media groups aren’t having to pitch Hollywood on funding media efforts, there’s a lot higher probability of being able to gain visibility for both the prizes and the teams involved. Require that the other 75% of the budget can only be spent on prize payouts, and keep the current Centennial Challenges ability to retain money unclaimed from year-to-year.

While there are probably tweaks or adjustments to this plan that could make it work better, and while 1% is a bit ambitious, I still think this is much better than just trying to up NASA’s topline budget by a factor of 2x, and a lot more likely to result in lasting benefits than doubling NASA’s budget.