About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

How to run a challenge prize

The Centre for Challenge Prizes (supported by the Department for Business, Innovation and Skills) is launching Challenge Prizes: A Practice Guide this week.

The guide aims to help governments, funders and leaders of charities and public services to understand what they need to do to get a prize off the ground.

A tried and tested approach

Challenge Prizes are a simple idea. You identify a problem or opportunity and offer a reward to whoever can first or most effectively meet your challenge. Compelled by the promise of a cash prize, the glory of being first or best, the satisfaction of putting skills to use and making a change in the world, talented individuals and teams put aside what they were doing and make solving your problem an urgent priority.

Challenge Prizes are a tried and tested way to support and accelerate change in the world. They have prompted important advances through history, from developments in space travel to the invention of canned food.

Making a comeback

In the past five years, governments and funders across the world have embraced challenge prizes (also called ‘inducement’ prizes) as a way to tackle problems and make progress towards ambitious goals.

New prize centres and programmes include the US Government’s online challenge platform Challenge.gov, NASA’s Centre of Excellence for Collaborative Innovation and the Centre for Challenge Prizes in the UK, supported by BIS and Nesta.

Meanwhile online ‘solutions’ markets such as InnoCentive and Kaggle are growing vibrant communities of problem solvers. Collaborative technologies offer new and powerful ways to mobilise people to work on a challenge and have played an important role in this current resurgence.

A useful tool

For governments and funders, challenge prizes have become one of a range of tools we have at our disposal to prompt change in the world. They sit alongside other funding and support mechanisms, such as grants, contracts, investment and incubation. There is also great scope to use a prize incentive alongside other methods to make new kinds of challenge-led programmes.

Challenge Prizes: A Practice Guide should help anyone interested in prizes to understand some basic principles for their design. We wrote it to respond to the current interest in prizes and to support people to make the difficult decisions that underpin their development (prize design can be a complicated business).

The guide shares practical wisdom that comes from Centre’s work to run prizes and to support others to do the same, so you’ll be using tried and tested tools and processes – amongst the very things we use in our work to design and develop challenge prizes.

We hope you find these useful to your work to make a progress towards a goal. If you would like further support to get your challenge prize off the ground, please get in touch.

Challenge Prizes: A Practice Guide is part of a planned series of practice guides developed as part of Nesta’s Innovation Skills programme.

The guides have been designed to help you to learn about innovation methods and approaches and to put them into practice in your work.

Part of
Challenge Works


Perrie Ballantyne

Perrie Ballantyne

Perrie Ballantyne

Learning Manager

Perrie led on the development of curriculum for innovation and learning design and worked with various strategic partners to develop offerings.

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