How effective is it to fund a researcher as opposed to a research idea?
There are a few funding schemes which are working exactly in this direction, giving the researcher lots of freedom in their line of research. Sometimes, the funding comes in form of a "prize" and the prize may only be used for further research topics. 

In a smaller scale (you were talking about a larger amount of money) each tenuring decision is such a grant: The university is investing a significant amount of money into a person without any further control about the future research directions (at least in Germany). There is just some hope that people will not stop doing interesting things. If you sum up the regular amount of money a professor recieves, plus the additional staff / expenses granted, you end up with large amounts of money. I must say this freedom is something I really enjoy, and for me it is my major motivation for staying in academia. 

Of course, those professors still write grant applications...