Board Thread:Questions and Answers/@comment-108.57.207.17-20140108232200/@comment-24185151-20140113195344

It provides more incentive for others to participate in your challenge. It "ups the ante" and makes it more competitive. Mainly used in guilds and larger parties to encourage participation by people who like to give.

There was a discussion on Trello regarding the type of people that normally give gem prizes. There's no real personal gain but it was hypothesised that gem prizes are normally given by people who are the leader type with a generous heart.

Does that help answer your question?