FundScience is an organization intended to provide a microfinance source for researchers. Microfinance, as the name implies, deals with amounts that are much smaller than usually considered for the comparable project. For instance, microlending would be on the order of a few hundred dollars or less, rather than a few thousand or more. In the case of funding science, the amounts talked about are on the order of a few thousand dollars, up to $50,000, and the grant is for one year.
FundScience has worked the last couple of years on establishing partners and support for its work, and has recently launched its first trial. While the organization will vet any proposals submitted to it for funding, it will actually appeal to the public to select what projects get funded. People can donate to each of the projects under consideration, and depending on the level of donations and the quality of the project, FundScience will add to those donations. So a researcher can hit the road to publicize the project, with an eye towards gathering more donations.
As the Nature item I linked to indicates, there are other groups looking at microfinance for science projects, EurekaFund and SciFlies. As with FundScience, the projects are targeted to specific sectors and young researchers (or grad students, as the case may be). To compare this trend to prizes, these entities operate at the small scale of InnoCentive. Arguably when you get to something comparable to an X Prize, you’re in the same space as traditional funding agencies, or foundations.
Given the different kinds of incentive involved in funding research compared to stimulating innovation, it remains to be seen whether what FundScience and similar organizations could be scaled up. If it could, we have a possible means to alleviate the problem of ridiculously low application success rates at federal funding agencies. By this I mean the increasingly common occurrence of highly qualified research proposals being denied because there was only enough money to fund a few.