Approval of prize proposals and recognition of the correct wallet address of winners can be handle via stakeholder voting among existing currency holders. The currency base can be bootstrapped by recognizing the efforts of volunteer developers who would otherwise be performing work for free.
If an API is then added for transferring and proving ownership of shares, developers will then be able to sell their shares in independent exchange markets for other currencies if there ends up being a demand. Third parties might be interested in buying currency from developers in exchange for cash so they can list prize proposals on the network for completing work on software that benefits them.
This would potentially allow the foundation to indirectly compensate developers without having to raise the funds and hold the cash itself.