From Short-Term Needs to Focussing on Mission – How Mozaik Foundation is embracing the long game
Section
Case in Brief
The issue
While societal challenges we are facing require creativity and patience, the prevailing funding practice provides short-term support which creates a challenging environment for organisations to test viable solutions to the root causes of problems. It might also create donor dependency and an outcome- focussed mentality.
The context
Systemic short-sightedness, lack of space for testing and experimentation, and focus on immediate tangible results lead to the failures of systems to deliver long-term impact. The evolving nature of some wicked problems – such as worsening mental health and too-rapid technological advances, including in AI and automation – all change the societal fabric and require more forward-thinking approaches from philanthropy.
The path forward
Philanthropic organisations have the unique opportunity to prioritise mission over measurable outcomes. This requires developing introspection muscles to transform their own internal structures and procedures which allow for innovation, agility and rethinking what they can directly impact and what is beyond their control.
The Mozaik Foundation: A Snapshot
Established in 2002, the Mozaik Foundation’s vision is for its home country Bosnia and Herzegovina to be a beacon of entrepreneurial spirit, a place where skilled young innovators are not merely participants but leaders and creators of change. In 2016, the foundation launched a 10-year strategy with the ambition to lead the development of a new generation of entrepreneurial and innovative youth in BiH to serve as a role model to others.
Mindset
- Mission and impact-driven
- Impact investment and high-risk appetite
- Long-term trust building with local players
- Catalysing underused local capacities
- Iterative learning and adaptive strategy
- Empowering the workforce of the future
Overview
Bosnia and Herzegovina’s challenging economic situation, with its high unemployment rate and lack of professional opportunities, is causing many young people to seek futures elsewhere. The Mozaik Foundation is striving to reverse this trend by challenging the donor-dependency logic, placing impact at the centre, and developing a long-term vision. It has designed a 10-year strategy to create role models for the youth of the country. Through an innovative Impact Management Matrix and clarity on the limitations to the organisation’s direct impact, the Mozaik Foundation is an inspiring example of a philanthropic practice that is courageous, systemic and agile.
Challenge
The aftermath of the collapse of communism in central and eastern European countries and the end of conflicts in the western Balkans saw many international organisations and private philanthropies enter the region with the intention of strengthening social cohesion and mobilising communities. Apart from supporting organisations and contributing towards building democracy and a market economy, they also helped lay the groundwork for reinvigorating existing – and establishing new – philanthropic cultures, such as through the dynamically growing community foundation movement.
However, this also created some side effects. Many civil society organisations significantly relied upon, and hence became dependent on, funding from international organisations as the only relevant funding source. Another unintended consequence, according to the Mozaik Foundation, is “projectitis – a condition which plagues organisations that excel in fundraising but become overly cautious, focusing primarily on contract acquisition and donor satisfaction”. Donor dependency and a project-driven ethos often force mission-driven organisations to become chameleons that adjust to funding conditions instead of steering towards their vision.
This is the story of the Mozaik Foundation, based in Bosnia and Herzegovina – a country in the western Balkans that underwent a civil war from 1992-1995 and has since travelled an uneasy path of reconstruction and reconciliation. The repercussions of the past still resonate in the present: According to a World Bank report, regardless of stable economic growth, “Should BiH continue to grow at the same rate, it would take more than 100 years to reach living standards enjoyed in the EU.” As a consequence, BiH faces a significant brain drain: in the last three decades, 24% of its population has emigrated, with mostly young, educated and skilled people among them. Against the backdrop of significant economic challenges, philanthropy in the country is still perceived primarily as a way of providing help to people, and rarely as a tool for addressing critical issues that demand a long-term approach.
The Mozaik Foundation, which was established in 2002, started with the ambition of creating opportunities for young people to address community challenges, including youth brain drain. While it tapped into funding from USAID, the EU and the World Bank, among other major donors, the foundation ended up with accumulated frustration around the limited impact it was achieving: The projects it had been implementing were donor-driven and outcomes-oriented, without necessarily embedding the visions of local communities and long-term prosperity. This is where Mozaik started pondering over fundamental questions such as: Why does it exist? How does it measure direct impact of its work? How does it stay true to its mission while remaining a flexible and learning organisation?
Approach
Getting out of the grip of short-term wins is daunting and calls for courage, leadership and long-term thinking. While these can be nurtured internally, they can also be facilitated through external stimuli and peer inspiration. In the case of the Mozaik Foundation, the inspiration came from international philanthropies, such as the Mott Foundation and King Baudouin Foundation, while an executive programme for Schwab social entrepreneurs at Harvard Business School in 2013 appeared to be game changing. The Mozaik leadership brought back the learnings to the team and, thanks to a general-purpose grant from the Mott Foundation, initiated a two-year process for a radical restructuring of the foundation’s course to the future.
The valley of death: Breaking away from donor dependency
The ambition to bring the most possible impact for the youth of Bosnia and Herzegovina resulted in a 10-year ambitious impact statement: “Between 2016 and 2026, Mozaik Foundation will lead the development of a new generation of entrepreneurial and innovative youth in Bosnia and Herzegovina – a value-driven force that creates new social and economic value, creates new jobs and serves as a role model to other youth.”
Pivoting to a mission-driven organisation spurred innovation, transforming Mozaik into a more robust organisation, deeply embedded in the communities it serves, and fostering numerous collaborations across the private, public and civil society sectors. Mozaik is nearing its ambition of being able to generate around €500,000 (BAM 1 million) per year for operations through its own income generated through such sources as the proceeds of the endowment, mission-related investments and local contracts – all the while staying creative and flexible in its approach of supporting role models and nurturing new businesses in BiH.
However, there was a price to pay for the foundation’s commitment to impact: It required phasing out multi-million-dollar projects supported by USAID and the EU as they no longer fit the foundation’s new strategy objectives. Mozaik faced a “valley of death” in 2015-2017 – with the lack of liquidity putting a toll on the staff’s workload and morale. Thanks to the support of flexible funding of European private philanthropies, such as the Robert Bosch Foundation and Porticus, and the first institutional grant from the Swiss Agency for Development and Cooperation (SDC) in 2019, the foundation passed this resiliency test, putting it on track to secure organisational sustainability and helping it stay true to its mission.
Impact Measurement Matrix: Navigating what is under, and beyond, control
Clarity around purpose and the desired future creates a space to be more intentional about the “how”. The foundation landed on a theory of change called an “Impact Measurement Matrix”, which includes 3 mission results around the opportunities for youth and 2 internal sustainability results in the next 10 years.
The unique feature of the matrix is an invisible line of control: This theory of change acknowledges the limitations of its direct impact and that no single actor can predetermine where, how or for whom value might be created. While it gives a promise for the mission and sustainability results, the theory implies that projected outcomes might evolve depending on the context, other players and unforeseen events. Learning leads to new “a-ha” moments which are immediately implemented and brought to life. This ingredient is key to an impact-driven organisation. With the pathway being discovered iteratively during the process, the invisible line of control allows for flexibility, adaptation and constant innovation.
Establishing the internal culture: “The only constant in Mozaik is change”
Commitment to impact comes along with commitment to continual evolution, which requires a certain mindset of staff members. The internal mantra, “the only constant in Mozaik is change”, speaks to a culture where lessons are rapidly integrated back into the strategy. This is underpinned by clear internal frameworks which are constantly documented and updated to ensure simpler ways of working. The prerequisite for an innovation-prone team is bringing down silos and “islands of control” internally and enabling staff to see the bigger picture.
Keeping innovation at the heart of the entire organisation is made possible by the leadership of Mozaik intentionally adapting management styles to each phase of the programme-development cycle; giving staff the time to mature; and encouraging staff to have a coffee with each other to reassess internal procedures and dismantle unhelpful practices.
Results
High risk yields high impact
Eight years into this ambitious strategy, Mozaik is well on track to achieving a sustainable financial model, and set to hit some of its mission targets ahead of time: It attracted and identified almost 80,000 responsible, ethical and positive youth in BiH (out of 50,000 planned); mobilised and empowered over 4,000 youth-led projects (out of 5,000 planned); and supported, invested and promoted almost 450 new businesses (out of 500 planned). While the leverage point for supporting new businesses became Tech4Impact (introduced below), identification of new youth role models is happening on the online platform Rolify.com, a dynamic community of youth activists and social entrepreneurs, which went through several reincarnations. These reincarnations became possible through the spaciousness of the 10- year strategy and the ability to implement, test and iterate at a greater speed than donors’ approval timelines (which could sometimes take up to six months). The scale of this impact is the fruit of constant experimentation with projects, which has led ultimately to Mozaik becoming a national champion in its mission areas with a strong network of local partners.
Boosting local venture philanthropy through Tech4Impact
Through the learnings from its charitable projects, Mozaik realised that creating role models for youth in the country is intricately related to building businesses and job opportunities: High-quality jobs that encouraged BiH youth to stay were needed. Following a couple of iterations, the foundation created an equity investment fund Tech4Impact – an innovative tool focused on SDGs and technology which mobilises private capital, including from the diaspora. Over 350 start-ups have received pre-seed funding – a €25,000 investment for the development of a prototype, as well as pro bono business support from Mozaik Startup Studio. While Mozaik knew little of the investment market at the outset of its journey, it became one of the leading impact investors in the region. The foundation currently has equity share in 17 youth start-ups, with Mozaik’s share estimated at almost €2,3 million (BAM 5.5 million).
Countrywide change
According to Philea’s “Exploring 21st Century Philanthropy” survey, advocacy and campaigning will need more philanthropic engagement in the next decade. Focussing on strategy rather than projects opened new avenues of action on advocacy and coalition building for Mozaik, two areas which were initially beyond its scope. Since 2020, the foundation has led a successful campaign that has changed the legal framework for the exemption of food donations from VAT. It could have been impossible in a politically divided country with a complex governance structure; however, the foundation leveraged its reputation and networks to ensure unanimous support, which would ultimately lead to the reduction of hunger and waste of food in the country. The learnings around the need for greater policy and advocacy work will be fed more profoundly into the next cycle of strategy development.
From a robust organisation to a robust ecosystem
Ambitious theory of change creates humility about the role one organisation can play. Systemic thinking about interdependency and the importance of coordinated efforts motivated Mozaik to develop its interventions at the intersection of two major learnings: local experience and needs, and harnessing global knowledge. The foundation works closely with youth, municipalities, the private sector, media and institutions. It contributes to systemic efforts at the national level as well. Mozaik co-founded the Bosnia and Herzegovina Philanthropy Forum for charitable foundations and responsible business to mobilise more private funding and create an enabling environment for national philanthropy.
It also supports the adoption of ESG standards and created a platform for thought leaders and change agents through its annual Mozaik Impact Summit. At the same time, Mozaik keeps its finger on the pulse of developments at the European and global levels by scanning global and regional trends against the local pace of development, and through regular engagement with other philanthropic and academic players.