How much money do Nobel Prize winners get?
The Nobel Prize is one of the most coveted awards in academia whose winners also receive a monetary prize as well which they may use as they please.
Alfred Nobel’s will stated that the prizes should be funded from the interest generated by his estate’s investments, mainly from the invention of dynamite. The prize has been running since 1901 and when Alfred Nobel, left around 31 million Swedish crowns (around 2.2 billion Swedish crowns in today’s money) to fund the awards and to cover the cost of financial recompense for the winners.
The Nobel Prize is amongst the most illustrious awards in academia, recognising the preceeding year’s achievements in Physics, Chemistry, Medicine, Literature, Economic Sciences and in promoting Peace that “have conferred the greatest benefit to humankind.” On top of the prestige of winning the coveted award comes a pot of money as well that winners can use as they please, and it is generally in mundane ways.
For 2024 the prize money on offer increased to 11 million crowns, worth roughly $1 million.
How is the Nobel Prize funded?
That initial 31 million crowns is worth around 1.8 billion crowns in today’s money, or around $170 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. Every year the Nobel Foundation releases an Annual Report, the 2023 Report was published in April this year.
The breakdown of the investment portfolio targets are:
- 55% equities (with an interval of –15 to +10)
- 10% fixed income (with an interval of −5 to +45 points)
- 10% properties (±10 points)
- 25% alternative assets (± 20 points)
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 11 million crowns current top prize is the equivalent of 104% of the value of the initial prize.