Forging a Path to the Future

In 1919, Raymond Orteig, a hotel mogul, offered $25,000 to the first pilot who flew nonstop from New York City to Paris. Several aviators

failed to complete the perilous journey, but in 1927 Charles Lindbergh succeeded, capturing the Orteig Prize and sparking a revolution in air travel.

More than 70 years later, Tom Vander Ark wants to follow in Mr. Orteig’s footsteps. But instead of spurring transatlantic flight, he wants to offer awards that build a better education system, improve health care, and create cleaner sources of fuel.

Mr. Vander Ark, 47, last month became the president of the X Prize Foundation, a Santa Monica, Calif., charity that offers multimillion-dollar purses to encourage individuals, nonprofit groups, and businesses to develop solutions to some of the world’s biggest problems.

For the past eight years, Mr. Vander Ark oversaw the education grant making at the Bill & Melinda Gates Foundation, in Seattle. The education effort, which focused on building smaller high schools for inner-city students, has met with mixed reviews.

Mr. Vander Ark says he decided to leave the nation’s wealthiest philanthropy to allow it to foster new approaches, as its assets will essentially double in size over the coming years now that Warren Buffett has commited the bulk of his fortune to the organization. At the X Prize Foundation, he says, he looks forward to expanding beyond traditional philanthropy to aid the less fortunate.

“In my own work at the Gates Foundation, I began to recognize the need for innovations that attack critical challenges,” he says. The prizes allow “groups to approach the problem in ways we had never thought about and achieve really important breakthroughs.”

The X Prize already has earned accolades for revolutionizing one field: commercial space flight. In 2004, the nonprofit group gave its inaugural award, the $10-million Ansari X Prize, to Mojave Aerospace Ventures for successfully launching a spacecraft capable of carrying three people on a suborbital flight twice within two weeks. That historic spacecraft, SpaceShipOne, now hangs in the Smithsonian Institution’s Air and Space Museum, in Washington.

But after awarding the Ansari prize, the organization faced an existential problem, says its founder, Peter H. Diamandis. For 10 years, the space project had been the X Prize’s raison d’etre and once it ended, the group had little money left.

“At that first post-award board meeting, we had the discussion of what are we? Who are we going to be going forward?” says Mr. Diamandis, an aerospace engineer who has established several commercial space companies.

Instead of closing shop, Mr. Diamandis and the charity’s Board of Trustees decided to broaden the X Prize’s mission to offer new multimillion-dollar carrots.

In October, the group announced a prize to help make DNA mapping faster and more affordable, and it plans to develop an award that will ask competitors to design and build a highly fuel-efficient — and marketable — car. Future prizes will seek to foster improvements in schools, research in biofuels, and ways to fight global poverty through entrepreneurship.

To lead the revamped efforts, Mr. Diamandis choose Mr. Vander Ark because of his experience in the nonprofit world and the energy industry — Mr. Vander Ark previously worked at a coal company.

“I wanted someone who was able to help take this foundation to the next level — to be viewed and respected as a world leader,” he says.

Mr. Diamandis will continue his role as chairman and chief executive of the X Prize Foundation, while as president, Mr. Vander Ark will oversee the group’s day-to-day operations. Both men admit they are continuing to sort out their roles, but, says Mr. Diamandis, “we’re dancing very well together.”

The first challenge for both men will be raising money to pay for its new X Prizes. Each will be worth $10-million or more and most likely be sponsored by wealthy individuals.

The group, which despite its name is a charity, also is raising $50-million for its operational costs. In March, Larry Page, one of the group’s board members and a co-founder of Google, will publicly announce the campaign, which has already garnered $17-million during its “quiet phase,” at an event at the Internet company’s Mountain View, Calif., headquarters.

In an interview with The Chronicle, Mr. Vander Ark, who declined to disclose his salary in his new position, discussed his new job and his decision to leave the Gates Foundation.

What attracted you to the X Prize Foundation?

The foundation has had obvious successes in space, and the idea to use prize philanthropy to attack other problems to benefit humanity is a pretty exciting concept.

I’ve spent most of the last eight years in a more traditional philanthropic setting and have a pretty good understanding of the need for, but the limitations of, investing in direct service to those in need and investing in systems improvement. You could call it a “push” strategy.

Prize philanthropy is not new, but a seldom-used “pull” strategy, where you have the potential to set a high goal and activate a lot of excitement about that goal in a group of competitors and in the public.

Why did you decide to leave the Gates Foundation?

Many foundations have term limits of five to seven years and I’ve always thought there’s some benefit to that for individuals and institutions.

Giving money away is not something a person ought to make a career out of. It’s quite easy to mistake the interest of prospective grantees for market adoption of your ideas.

I felt, while the fund is in the process of doubling in size and incorporating new programs of work to complement its traditional focus on health and education, that it was a good time for me to try something new.

When you decided to leave Gates, did you know you’d be joining the X Prize Foundation?

No. The decision to leave the Gates Foundation is something Patty Stonesifer [chief executive of the Gates Foundation] and I have been discussing for a year.

So I considered a lot of different options in education, in philanthropy, and elsewhere.

This by far was the most exciting opportunity with the biggest potential for benefit.

Did you see a similarity in the X Prize and the Gates fund’s Grand Challenges in Global Health competition?

It’s related but different.

The Grand Challenges is really a research-and-development effort done through request for proposals. That’s taking the push strategy to a new level.

But the prize strategy could engage 10 times as many people in attempting to solve those problems.

They have named and framed big problems and have activated the interest of the research-and-development community, but it’s still funding proposals. And so an effort like that could very well be complemented by a prize strategy that was open to a variety of new ideas and may well have hundreds of people working on a problem rather than a few grantees.

If you had the chance to be on a commercial space flight, would you go?

I’d make sure Peter got the first chance.