ROI IN ACTION: INVESTING IN CHANGE
ROI IN ACTION: INVESTING IN CHANGE
Non-profit organisations are not businesses. Certainly not in the traditional sense. But ROI is an important aspect of our operations. The greatest balancing act of an NPO is to determine where and how we should be investing funds for the greatest social and humanitarian change.
For Wheel Well, our goal is to prevent children from losing their lives on our roads. We want to see car seats for every child, better legislation and wide adoption of road safety through education.
“Return on investment” or ROI, is a financial term. It measures the value of profit returned against the cost of the investment required to achieve that profit. Represented as a percentage, this allows businesses to gauge whether the upfront investment into things such as growth, marketing, customer service, and so on will pay off in the long term. But NPOs are not businesses, and we are not here to make a profit for ourselves or our investors. So why are we even talking about ROI?
ROI is an important factor in the NPO sector, as we need to run a cost-benefit analysis when making decisions. Rather than measuring our successes in profit, we measure the impact we can make for our cause. The same goes for determining the allocation of our funds and resources. A misconception when it comes to NPOs and charities is that we act as a middleman to distribute your donation directly to those who need it. But this is not quite the case – if it were, NPOs would not be able to continue their work.
THE STATE OF ROAD SAFETY IN SOUTH AFRICA
Before we can discuss how investing in a road safety NPO can enact positive change, we need to re-iterate why they are necessary in the first place.
“Road traffic crashes are the leading cause of death for children and adolescents aged 5 to 19 worldwide. Each year, more than 180,000 young people under 19 lose their lives in road crashes. That is 500 lives lost every day or one every three minutes.”
90% of these deaths occur in developing countries like South Africa. Data from the Road Traffic Management Corporation (RTMC) shows that in 2024, 1 145 children aged 0-14 years were killed on South African roads. In 2021, 2 257 children were killed in traffic-related incidents while 44 019 were injured.
This is not only a humanitarian crisis – it is an economic one too. According to RTMC’s “Cost of Crashes in South Africa” report, road traffic incidents cost South Africa R142.95 billion in 2015 alone. This amounted to 3.4% of the national GDP. These costs include emergency medical care, long-term rehabilitation, loss of income, property damage, and funeral expenses.
The broader socio-economic impact of crashes is far-reaching. They disrupt children’s education. It pushes already struggling households deeper into poverty. Additional strain is placed on an already overburdened healthcare system. These incidents also place mounting pressure on social services, slowing national development. Most devastatingly, crashes disproportionately affect the most vulnerable members of our society, deepening existing socio-economic inequalities.
South Africa is one of the countries committed to the United Nations’ Decade of Action for Road Safety. This is a global strategy to halve the number of road fatalities and injuries by 2030. It recognises that road safety is not only a moral imperative but essential for the sustainable development of a country.
Improving road safety and reducing the number of fatalities requires a multi-faceted approach. NPOs offer focused attention and specialised expertise on social issues that governments do not have the resources to fully tackle. They can create networks, facilitate communication and partner with entities from a multitude of different sectors. They are often deeply rooted in the communities they are helping, providing a voice for that community, advocating for change and calling for accountability.
UNDERSTANDING ROI IN THE CONTEXT OF AN NPO
“Return on investment” in the non-profit context goes beyond traditional revenue generation. For organisations like Wheel Well, ROI is measured in both financial and social returns.
When looking at Financial ROI for a non-profit, the cost-benefit analysis is based on cost-efficiency and resource-optimisation, instead of profit. For example, sponsorship of cleaning products frees up financial resources that allow us to increase our reach and improve our impact by growing or developing campaigns related to our cause. Successful campaigns, such as our Car Seats for Kids campaign, can contribute towards long-term financial returns by reducing the chance or severity of children being injured in a crash. This relieves the financial burden on families, the government and the healthcare system, saving funds and family income that would otherwise go to medical care or rehabilitation.
Social ROI is the measure of social benefit that comes from our work. This includes measurable outcomes. Mainly, the reduction in the number of child fatalities and injuries on our roads. The immediate social effect is that it spares families the trauma of losing their children in preventable incidents. Our efforts to raise awareness about child road safety contribute to changes in public attitudes and driver behaviour. Over time, this can influence legislation, drive better enforcement of road safety policies, and foster a more safety-conscious culture. The ripple effect of these changes often results in stronger community engagement and more sustainable child protection efforts.
It often feels uncomfortable to talk about “cost-benefit analysis” and “investment” in the same breath as safety for children. But these terms help stakeholders see the value of investing in non-profit organisations, either through financial donations, sponsorship or promotion of our campaigns.
THE CHARITY OVERHEAD STIGMA
There is a perception that when someone donates to an NPO most, if not all, of it will be distributed to someone in need. Suppose an NPO uses donations to cover overheads or pay for marketing to generate more funds it is viewed negatively – almost greedy. This can stop people from investing in your NPO if they feel like you are not giving enough. We hear you and certainly can see where this is coming from. However…
In a 2013 TED Talk, Dan Pallotta highlights the double standards of success between for-profit vs non-profit organisations. He suggests that this hurts the efficacy of non-profit organisations. Nonprofits must minimise overheads beyond reason. At the same time, for-profits are expected and praised for hiring skilled people, marketing and innovation. The measure of success for both is in purely financial terms. For-profits how much profit is earned, and for non-profits, how much money is donated. Applying this measure of success to a non-profit while attributing less value to its impact and reach is skewed. The immediate result of this is NPOs aiming to keep their overheads to a bare-bones minimum.
Frugality constrains NPOs in the following ways:
- Compensation: NPOs struggle to hire people with the skills necessary to further their impact. They can only offer a fraction of the salaries the same position would earn in the for-profit sector.
- Marketing: Campaign awareness is vital to fundraising. If NPOs can only access a small number of donors, this is severely limiting what they can achieve. Donors are the lifeblood of an NPO. NPOs also need to have a presence so that people requiring help know who to reach out to.
- Innovation: There is no space for failure in an NPO. As a result, innovation is stunted and experimentation is shied away from. Without innovation, NPOs are stuck with outdated tried-and-trusted methods.
- Timeline Constraints: Donors want quick results, thus long-term investment is frowned upon. This hinders the ability to scale campaigns and the impact they might have. Projects that should be given time to develop organically, either do not get realised or are rushed into existence to their detriment.
- Access to Capital: Due to capital constraints, it’s harder to attract investors or equity to scale.
To put it in context, the global expected standard for admin and overhead limits is about 10% of funds raised. That means that if the overhead of a small NPO is R50 000 per month, they would need to source funding of R500 000 every month. That is near impossible. Firstly, this would burn out donors. It would take an immense amount of resources in time and staff to source these funds. If a larger percentage of donations and fundraising covered overheads, those resources are freed up to do actual good. Covering these costs offers a very high rate of return if we measure the social impact.
For Wheel Well, it means that our showroom staff are available to have constant conversations with parents on car seat safety. We can prioritise advocating for safer laws and regulations. We have the resources to campaign for a National School Transport policy. We can hire people with the relevant skills to run our website and create an engaging and informative social media presence. It also makes it possible to fairly remunerate people who work for NPOs for the value they add.
Investing in an NPO like Wheel Well prevents child road fatalities and creates a culture of safety-conscious road users. Each child that dies on our roads costs the country R 5 million. Investing R 50 000 per month doesn’t just save the country R 5 million. It also saves a life and the emotional and social burden of that loss on the surrounding community.
We echo Pallotta’s sentiment: let’s stop measuring non-profit organisations by how little they spend, and start measuring them by how much they accomplish.
THE RETURN OF YOUR INVESTMENT IN US
If NPOs simply existed to disperse your donations to those in need, you could cut out the middleman as you could arguably just do that yourself. But NPOs do so much more. Their laser focus on a specific cause means that your investment in them has an exponential impact.
Part of fundraising is asking stakeholders to put their trust in our ability to enact change. Our impact on road safety for children in South Africa has had tangible results:
- Car Seats For Kids Campaign: Almost 12 000 children from low-income families have received car seats.
- Halo Beanies Campaign: Lowering the risk of child pedestrian casualties and fatalities through the creation of high-visibility beanies for school children.
- Educating parents on correct car seat usage.
- Advocating for change in legislation and regulations. We are working to change Regulation 231 of the NRTA to count each child as a person concerning loading capacity.
- Road safety education for school learners.
Since 2012 RTMC has reported a downward trend in child road deaths. In 2012, 5 087 children died in road-related incidents. In 2024, this number was down to 1 145.
Based on the predicted trajectory of the 2012 statistics, we estimate that we have saved the lives of 21,424 children. Over 13 years, R 9.6 million has been invested with us, and as a result R107 billion rand has been saved through the prevention of child road fatalities. Imagine what we could do with proper funding!
When you invest in an NPO like Wheel Well, you’re not just giving to a cause. You are shaping a safer, more compassionate South Africa. The return is not seen in dividends or share prices but in fewer white crosses on the side of our roads. It is the safety of a child buckled into a car seat. It’s in the long-term strengthening of communities that no longer have to mourn avoidable loss.
The value of our work lies in lives protected, futures preserved, and a country that grows more conscious and accountable. ROI in our world means every Rand stretches beyond immediate relief to spark a domino effect that influences law, education, awareness, and behaviour. It means your support enables not just action, but transformation.
Because the life of a child is not just worth the investment. It is the return.
ROI IN ACTION: INVESTING IN CHANGE Read More »
