Impact Canada Initiative: Answering Your Questions About Challenges

Now that the Impact Canada Initiative Centre for Expertise has been up and running for eight months, we thought it would be a good time to share some of the questions that we’ve run into while exploring challenges and prizes in the federal government.

What is a challenge?

“Challenges”, “prizes”, “challenge prizes”, “prize challenges” — these innovative funding models go by many names. At Impact Canada, we tend to use the term “challenge” to refer to an incentive-based approach that rewards the first or best solution to a specific problem, based on a set of pre-determined criteria. Our goal is not only to seek out the best ideas and solutions, but also to ensure that they demonstrate that they can deliver tangible, measureable results for Canadians.

What types of problems do challenges solve?

One of the best pieces of advice that we’ve received from Nesta’s Challenge Prize Centre — a world leader in designing and delivering challenge prizes — is that challenges are most effective when used to meet a clear and measureable goal. For example, a challenge-based approach is unlikely to solve “extreme poverty”, but, recognizing the link between poverty and financial access, a challenge could be used to develop solutions that provide secure and efficient access to cash.

Why are federal departments interested in working with challenges?

As with any federal program or initiative, a department’s rationale for using a challenge will depend on its own context and objectives. In general, interest in challenges at the federal level stems from a commitment to take innovative approaches to solve difficult public policy issues that traditional approaches have failed to solve. Challenges are a great option if you are seeking a funding model that can help advance your file by generating interest, incentivizing action, and creating new partnerships and solutions.

OK, is this just the latest government fad?

Not at all — challenges have been helping to solve complex problems for hundreds of years, and have led to innovations in a wide range of industries, including food, agriculture, aviation, space travel, environment, and health. For example, one of the earliest challenges was the 1714 British Longitude Prize, which saw the British Government offer a prize of £20,000 for a solution that would improve maritime travel and resulted in the development of the marine chronometer. We are seeing a revival of this approach due to the use of data and technology which is opening up the problem solving process to new and more diverse innovators and measuring the impact of these efforts in a more meaningful way.

In the federal government, where does the idea to carry out a challenge come from?

We’ve seen challenge ideas come from all levels — from working level officials to senior executives and external stakeholders. The idea could start with a conversation, a proposal submitted by an external organization to a federal funding program, or as a result of the Budget or other priority-setting process. For example, through the Impact Canada Initiative, we partner with departments to design and deliver challenges that focus on accelerating progress on Government of Canada priorities. This means that Impact Canada challenges can be traced back to priority-setting documents like the Speech from the Throne, Budget, and Ministerial Mandate Letters.

Where does the funding for challenges come from?

Under Impact Canada, grants and contributions (Vote 10) are the primary funding sources that are used. Specific funding requirements will be dependent on departmental objectives and context, as well as the nature of the specific challenge, but, in general, funds may be sourced from pre-existing Treasury Board approved programs, as long as the challenge adheres to the program objectives, the maximum amount payable, and the expected results. Departments can then access the Impact Canada Initiative Terms and Conditions, a set of horizontal terms and condition for transfer payments that allow for a more flexible design and execution. If it helps, think of a challenge as a complement to your existing program activities — outcomes-based funding approaches, including challenges, can help to advance your existing program objectives and priorities, with clearly measurable outcomes.

What are the steps involved for developing a challenge?

There is no one, universal way to develop a challenge in the federal government; in fact, the adaptability of these funding models is one of their strengths. We’ve found it important to think of the process as a phased approach with project milestones like defining the problem, developing a challenge statement and undertaking challenge design. In fact, some common design elements appear in the majority of challenges — things like the incentives, assessment criteria, and applicant eligibility. Making decisions about these elements is another way to make progress, as it will help to carve out your overall challenge design.

How long does it take to design and implement a challenge?

Just like there is no set process, there is no set length of time that it will take you to develop a challenge. Timing will depend on the specific context; for example, a challenge designed to address a problem in the context of an emergency situation could move very quickly. You may also have a specific departmental context and/or objective which will affect the timing of your challenge (e.g., you may wish to align challenge milestones with a particular event or time of year). Also, keep in mind that a challenge can span multiple years, so you will need to take into account managing activities and budgets across multiple fiscal years.

How are challenges being delivered in the federal governments? Are there any examples?

Many federal departments are at various stages of challenge design and implementation; you can find the ones launched by Impact Canada on our very own challenge platform –impact.canada.ca.

To date, we’ve seen three delivery models emerge:

• A Government-led challenge, where challenge design and implementation is led mainly by in-house Government officials and supported by open engagement with external experts and stakeholder groups throughout (e.g., the Smart Cities Challenge led by Infrastructure Canada);
• A stakeholder-driven challenge, where Government officials use participatory and structured engagement with stakeholders to define the parameters for a challenge and use this information to inform its design and implementation (e.g., the approach that Indigenous Services Canada is using to develop a housing and infrastructure challenge); and,
• A partner-led challenge, where the Government of Canada funds an organization’s proposal to carry out a challenge or some elements of a challenge (e.g., the Women and Cleantech Challenge led by Natural Resources Canada).

I would like to design a challenge. Where should I start?

A good place to start is to stress test your idea to ensure that a challenge would be an effective approach for making progress on your issue. Resources are available to help you with this task, such as a set of questions in Nesta’s Challenge Prizes Practice Guide.

In the initial stages, it’s also important to know the resources that are available to support you with this work. This means identifying your challenge team, as well as having an idea about timing and budget. One strategy that we’ve seen help to advance a challenge in a department is the identification of a departmental champion (Assistant Deputy Minister-level or above). Also, don’t forget to engage with your corporate colleagues (legal, communications, evaluation, finance) as early as possible. Where possible, include them as part of your challenge team to ensure that you are developing your challenge in an appropriate way.

I’m interested in working with you. How can my department partner with the Centre of Expertise to develop an Impact Canada challenge?

Great question! The Impact Canada Centre of Expertise is housed within the Privy Council Office’s Impact and Innovation Unit. Our objective is to help federal departments adopt outcomes-based approaches, including supporting the adoption of new tools like prizes and challenges by providing departments with advice, guidance and access to key resources that help to enable this work (e.g., like a flexible set of Terms and Conditions for Grants and Contributions, and the Impact Canada Challenge Platform).

Federal departments interested in working with us on a project can submit an expression of interest. For more information about the Impact Canada Initiative or the Centre of Expertise, check out our website or feel free to email us with any general enquiries. You can also follow us on Twitter or check out our blog.