I always thought the Dzanc Prize was a great idea: $5000 given to a literary writer to apply towards a writing community service project. There’s no fee to enter, and the deadline has been extended to March 1, 2011. The application process is very specific, so be sure to check out the website for all the details.
In general, though:
In 2007, to further its mission of fostering literary excellence, community involvement, and education, Dzanc Books created the Dzanc Prize, which provides monetary aid in the sum of $5,000, to a writer of literary fiction. All writers applying for the Dzanc Prize must have a work-in-progress they can submit for review, and present the judges with a Community Service Program they can facilitate somewhere in the United States. Such programs may include anything deemed "educational" in relation to writing. Examples would include: working with HIV patients to help them write their stories; doing a series of workshops at a drop-in youth homeless center; running writing programs in inner-city schools; or working with older citizens looking to write their memoirs. All community programs under the Dzanc Prize must run for a full year….
There is no fee to enter and the winner--based on a literary work in progress and a literary community service project that the author plans to run--receives $5,000 from Dzanc Books and the possible publication of their finished work. Please look at our past winners and realize we're looking for great work here, both in regard to the writing and the service, and also not necessarily hoping to repeat similar community services over and over.
More information: http://www.dzancbooks.org/dzanc-prize/