Contests as a means to allocate funds is a growing trend for funders. I’ve applied to a couple and organizations that I have worked with have also applied for these funds. If you work in the non-profit sector, I’m sure that you have been on the receiving end of “Go vote for us/me!” emails from colleagues.
This is the first article I saw questioning the practice — although it is not a critical piece: Are Social Media Giving Contests Good for Non-Profits?. They disclose that they are involved as a sponsor of the PepsiCo10 competition but then they go ahead and promote the contest with a large graphic bearing the Pepsi logo in the middle of the article.
The article links to a post by Beth Kanter about an evalution she’s been conducting: AGC Coversational Case Studies: Students for a Free Tibet: A mindful social media strategy for campaigns or contests
Finally, the folks at the Knight News Challenge have commissionned a report on the practice: Contest-Driven Innovation – A Growing Trend in the News and Information Field. You can read the 50 page pdf, which has lots of information about different contests (specifically ICT contests), but unfortunately it is light on analysis.
I expect to see more thought and discussion of this trend in the near future.