Non-Profits: The Role of Prizes in Increasing Effectiveness of Delivery

The non-profit sector is a sector that has traditionally eschewed monetary gains since the very definition of the term implies a not for profit motive. However, in recent years, there has been an added emphasis on including token and substantial pecuniary gains for the participants in the non-profits who are attracted by the lure of honor, recognition, and monetary gains. In this respect, donors the world over are realizing that motivating the non-profits who are participants in the sector would be better if prizes are announced.

The point here is that though subsistence salaries and altruistic motives might motivate the main actors in the non-profits, there is a significant section of volunteers and participants who are attracted by the monetary component of the rewards. This has spurred foundations like the Ansari X Prize that offers a reward of $10 Million for anyone who can build spacecrafts to enter and return from space.

Studies have shown that prizes are motivators for non-profits and the participants since monetary gains are always welcome for the cash strapped non-profits. One has to consider the fact that non-profits are peopled with participants who have to bear expenses and costs that are both personal and professional. Hence, motivating them with the attraction of a monetary reward has its own advantages. The other aspect of using monetary prizes is that it is easy to measure the impact of the change that is actualized once the donors throw open the field to the invited participants. Since there is a monetary component, donors can insist on measurable and time bound targets that can be matched with the goals set. In this manner, non-profits can be expected to better the previous targets with each year as progress can be tracked.

However, the fact remains that large cash rewards are by themselves not a guarantee of success as there might be participants who are solely attracted by the prospect of making money. A possible solution to this dilemma can be found in the way the Ashoka foundation encourages collaborative efforts instead of competitive endeavors. The point here is that the donors and the foundations can ensure that the spirit behind the prize or the award is realized by fine-tuning the terms and conditions for such rewards.

Finally, the incentive of monetary gains works to increase participation by the members of the society at large and broadens the scope of the work involved. Donors can track the progress better, participants can be motivated better, and measurable results tracked better if the attraction of monetary gains is factored into the picture. Added to this is the fact that the purse might be kept low initially and after vetting the participants in a few rounds of elimination, the donors can then identity the prospective qualifiers better. Of course, as the saying goes, money cannot buy everything, but can make the wheels grind faster. This is the basic premise behind announcing rewards and monetary prizes by the donors to the non-profit sector.