Paul Jansen discusses his study, "And the Winner Is..." which explores and documents the ways in which governments and philanthropists employ prizes to produce social benefit and drive innovation. His report finds that prizes, as instruments of change, are "undergoing a renaissance," "growing in number and size, and appearing in new forms." His presentation will share his findings and address how new prizes hold enormous potential.

1. August 14 2010 Copyright © 2009 McKinsey & Company Capturing the promise of philanthropic prizes

3. Historically, society has turned to prizes to solve difficult and pressing problems 1700 1800 1900 2000 2 * Approximate value in 2006 U.S. $ Source: KEI Research Note 2008:1; photos: Wikimedia commons, Smithsonian Institution; Project Gutenberg 1714 Longitude Prize $2 Million* Established 1714

4. Historically, society has turned to prizes to solve difficult and pressing problems 1700 1800 1900 2000 2 * Approximate value in 2006 U.S. $ Source: KEI Research Note 2008:1; photos: Wikimedia commons, Smithsonian Institution; Project Gutenberg 1714 1795 Food Preservation Prize $44,000* Established 1795

5. Historically, society has turned to prizes to solve difficult and pressing problems 1700 1800 2000 2 Source: KEI Research Note 2008:1; photos: Wikimedia commons, Smithsonian Institution; Project Gutenberg 1714 1839 1939 1900 1795 Royal Agriculture Society of England Various purses and medals Awarded 1839 to 1939

9. Seven ways that prizes deliver change Community of Solvers Identify excellence 1 Focus a community 3 Influence public perception 2 Strengthen community 6 Educate and improve skills 7 Mobilize capital 5 Focus Influence 4 Identify and mobilize new talent Topic/ problem Public

11. Lunar Regolith Challenge

12. Lunar Regolith Challenge

13. Lunar Regolith Challenge

14. Lunar Regolith Challenge

15. 2009 Lunar Regolith Challenge Winners

16. This growth has been driven by new sponsors and new fields Source: McKinsey dataset of 227 prizes worth $100,000 or more 9 Sources of prize capital since 2000 Percent of prize capital Foundation/nonprofit est. 1995 or later 45% Corporation 26% Government 21% Foundation/nonprofit est. before 1995 4% Other 5% Large prize purses by sector U.S. $ Millions 17 72 1997 337 2008 72 Science & Engineering Other 39 Arts 30 Aviation & Space 88 Climate & Environment 108 26 13 4 12

17. We observed six major prize types Exemplar Network Participation Exposition Point solution Market stimulation

18. Effective prize development and delivery includes five steps IMPACT Post prize Build legacy Measure and improve Reinforce impact Design elements Prize process Prize strategy Stake-holder needs Prize types Goal setting Broad aspirations Specific objectives

21. For the full report, please visit: www.mckinsey.com/clientservice/ socialsector/And_the_winner_is.pdf Copyright © 2009 McKinsey & Company