How much is a Nobel Prize worth? How much does the winner earn?

The 120-year history of the Nobel Foundation has been funded by one man's estate and each year prize money worth millions of dollars is awarded to winners.

How much is a Nobel Prize worth? How much does the winner earn?

The Nobel Prize is amongst the most illustrious awards in academia, recognising the best of the year’s achievements in Physics, Chemistry, Medicine, Literature, Economic Sciences and in promoting Peace.

The prize has been running since 1901 and when Alfred Nobel, the inventor of dynamite, left around 31 million Swedish crowns to fund the awards and to cover the cost of financial recompense for the winners.

Last year, the prize money on offer increased to 10 million crowns, worth roughly $1.1 million. Lars Heikensten, head of the Nobel Foundation, said of the increase: “The decision has been made due to the fact that our costs and capital are in a stable relation in a completely different way than previously.”

How is the Nobel Prize funded?

That initial 31 million crowns was worth around 1.8 billion in today’s money, or around $200 million. Nobel’s family were shocked when his will was read to discover that he had left almost all of his considerable fortune to the award, and that interest earned on the investments of his capital should also be distributed as prize.

The Nobel Foundation releases an annual report, detailing how the initiative’s investments are doing. Their stated goal is to ensure that the endowment fund is able to garner annual returns of at 3.5% above inflation, to ensure that it can cover the cost of the prizes.

In the Nobel Foundation’s Annual Report 2019, released last year, the breakdown of the investment portfolio was:

  • 55% equities
  • 10% fixed income
  • 10% properties
  • 25% alternative assets

As per Alfred Nobel’s instructions, the capital is invested in “safe securities” and the returns on that investment are added to the prize pot. As Nobel Foundation’s funds have fluctuated over time the prize on offer has done the same, ensuring that the Nobel Prize could last for generations.

For a long time the value of the cash prize began to shrink in comparison to the value of the 1901 prize, and by 1918 winners were receiving less than 30% of the initial prize value. However as the investment portfolio began to reap rewards the Nobel Foundation were able to up to the prize money and it now exceeds the original prize.

The 10 million crowns current top prize is the equivalent of 114% of the value of the initial prize.