Risky business: The J.M. Kaplan Fund's new prize

Foundations tend to play it safe. No grant maker wants to explain to a boss or a board why a program failed or, worse, why a grantee went out of business. What this means, in practice, is that it's hard for start-up nonprofits to get foundation grants. The new J.M.K Innovation Prize from the New York City-based J.M. Kaplan Fund aims to change that, albeit in a modest way. It's the equivalent of early seed money for NGOs.The J.M. Kaplan Fund is the creation of Jacob Merrill Kaplan, a New York businessman who helped formed a cooperative of grape growers in the 1930s and subsequently sold Welch Grape Juice Company, which he led for many years, to the growers. With $10 million in proceeds, he established the J.M. Kaplan Fund in 1947.Today, the fund announced the first 10 winners of the innovation prize. I'd never heard of any of them, which is precisely the point. Among them:ScholarCHIPS (Washington, D.C.), which provides a pathway to college for children of incarcerated parents by offering scholarships and a support network.Growing Veterans (Washington State), which uses sustainable agriculture to help veterans transition back into their communities.Reclaim Appalachia, (Wayne, West Virginia), which mashes up job training, education and recycling, to address poverty and environmental degradation in the coalfields of West Virginia.

Coworker.org (Washington, D.C.), a online platform that encourages workers to petition their companies to improve their working conditions.

Behold! New Lebanon (New Lebanon, NY), which offers tours and workshops to expose city dwellers to the country, run by Ruth Abram, the founder of the Lower East Side Tenement Museum in New York.

Each nonprofit gets up to three years of support at $50,000 per year, as well as a $25,000 “bank” of funds available for technical assistance or targeted project expenses. That's not a lot, but it's unrestricted money, which NGOs can invest in their own growth. By comparison, MacArthur fellows get $625,000  for their "genius" and Skoll Awards to social entrepreneurs deliver $1.25 million in funding. Then again, those grants go to successful people (like best-selling author Ta-Nehisi Coates, who got a MacArthur this year) and well-established organizations, which may or may not need the money. The Kaplan winners are so small that a $50,000 grant should have an immediate impact.

The Kaplan Fund has about $147 million in assets and makes about $9 million in grants per year, according to Amy L. Freitag, who joined the fund as executive director in 2013. “They had a fairly traditional grant making program in historic preservation, human rights with an emphasis on immigration, the environment, and always a legacy program focused on NYC,” she told me by phone. The fund is still overseen by the Kaplan family, and they asked her to come up with new ideas. “They’re risk takers and fairly innovative and willing to take some chances,” she said.

There's nothing innovative about prize competitions. They are everywhere these days; some people wonder if we have reached peak prize? Kevin Starr, the straight-talking director of the Mulago Foundation argued a couple of years ago in the Stanford Social Innovation Review that the contest/challenge/prize/award industry does more harm that good, in part because competitions produce a few winners and many thousands of losers who waste countless hours on applications.

To their credit, Freitag and her colleagues at Kaplan tried to make at least the first round of the application process very simple. They put a brief application form online, and attracted 1,138 submissions, far more than expected. "We kept the bar very low," she said. About 200 organizations cleared the first hurdle, and submitted a traditional 10-page grant application, which was then reviewed online by more than 300 voluntary reviewers. Along the way foundation staff consulted with Echoing Green, Ashoka and the Draper Richard Kaplan Foundation, all of whom do prizes--no sense trying to reinvent the wheel.

I asked Freitag why only US-based NGOs were eligible for the prize. After all, $50,000 a year goes a lot farther in the developing world than it does here, and the needs are greatest in poor countries. "We did it to keep the field as manageable as possible," she explained.

What I like about the Kaplan prizes is that they trust these early-stage entrepreneurs to figure out for themselves how to spend the money. This approach democratizes problem-solving, as opposed to asking existing nonprofits to come up with programs that fit a foundation's idea of how change happens.

"We want to try to push the boundaries," Freitag said. "If we have 10 prize winners who all hit it out of the park, maybe we weren’t being risky enough."