Changemakers, a subsidiary of Ashoka International, one of the pioneers of social entrepreneurship, runs its competitions online and poses broad challenges, such as the one seeking to improve health care access. It offers small cash prizes and then gets sponsors to promise larger grants to selected participants. Similarly, the Rockefeller Foundation hosts online competitions for prizes of around $20,000 to help solve a wide range of social ills on the popular "crowdsourcing" website InnoCentive.

Other competitions are more specific or more ambitious: Sir Richard Branson is offering $25 million to whomever comes up with a "commercially viable design" to reduce global warming (a spokeswoman for Virgin U.S.A. says "hundreds" of entries have been submitted already, but a winner has not yet been chosen). And the X Prize Foundation, which jump-started the current vogue for prize philanthropy in 2004 when it awarded $10 million to the builders of a personal spacecraft to help develop the commercial spaceflight industry, is now offering a $30 million prize for whomever can send a robot to the moon and get images and data back to Earth, and a $10 million prize for a production-ready car that can travel 100 miles on a single gallon of gas.

A primary benefit of these competitions is the amount of money they can bring to bear on a problem or issue, beyond the actual prize money being awarded.

"Competitions are very good for shifting the expense of research and development to a broad-based marketplace, and away from a single investor," says Lucy Bernholz, a well-known philanthropy consultant who writes the popular blog "Philanthropy 2173."

As an example, Tom Vander Ark, president of the X Prize Foundation, estimates that contestants in the X Prize's spaceflight competition collectively spent $100 million in their attempt to win the $10 million prize. And if the private spacecraft industry blossoms as a result, tens of millions more in investment could follow.

Money also comes from companies that sponsor the actual prizes in exchange for naming rights. Auto insurer Progressive is funding the $10 million prize behind the X Prize's contest to develop an extremely fuel-efficient car, for instance. And the company plans to spend millions more on promoting the event, says Progressive's director of special projects, Brian Silva. For a company with an annual advertising budget of $300 million, that's a small price to pay for such publicity, which has included a kickoff announcement at the New York International Auto Show by Mayor Michael Bloomberg.

As U.C.L.A.'s Flannery says of her experience with prize philanthropy, "At first I thought it would just be easier to write a grant and get it over with, but the payoff here is much more than that."