Even though nonprofit organizations aren’t required by law to publish annual reports, most nonprofit leaders recognize the value annual reports can provide. A well-written annual report will help you demonstrate your accomplishments to current and future donors, cultivate new partnerships, and recognize important people. Five questions are most frequently asked by nonprofit managers who are producing an annual report for the first time.
Do we really need an annual report? Yes. You don’t need a beautiful, full-color, glossy 40-page production, but you do need some sort of accounting of the organization’s work over the past year. Even if it is only a two-page flyer you photocopy, you should get in the habit of producing an annual report. It is better to start simple and to work up to more complete, professionally written and nicely designed reports over time than to produce nothing at all.
What’s the most important part of an annual report? The most important part of a nonprofit annual report is the description of your accomplishments. We want to know what you did, but more importantly, we want to know why you did it. What were the results? Why did you spend your time and money the way you did? What difference did it make? Connect the everyday activities of your organization to your mission statement. Don’t assume that readers will automatically understand how your activities help you achieve your mission. Connect the dots for them.
What needs to go in the financial section? The financial section of a nonprofit annual report should clearly explain where revenues come from and how they are spent. In addition to the information provided in traditional financial statements (abbreviated formats are fine in an annual report), it’s also helpful to include pie charts, bar graphs, or other visuals that help readers see the big picture and understand financial trends. A short narrative description is also essential. Explain in plain English the meaning behind all those numbers.
How do we handle the donor lists? Organize your list of donors however it makes the most sense for your organization. Most nonprofits organize donors by contribution level and then alphabetize each of those lists. You can also alphabetize the full list without regard to donation level. Be sure to double-check all names, both personal and organizational, in your donor lists. Spelling a donor’s name wrong in your annual report is a sure way to sabotage a future donation.
What should an annual report look like? If you aren’t sure how your annual report should look, spend some time looking at other annual reports to discover what you like and don’t like. You can find links to over 100 nonprofit annual reports at www.NonprofitAnnualReports.net. See how other organizations in your field or geographic area are designing their reports. Show the person who will design your report several samples that are line with the look and feel you are after. It is also helpful to show a designer samples that you don’t particularly care for.
To learn more about writing nonprofit annual reports, visit https://www.NonprofitAnnualReports.net where you will find tip sheets and a self-paced annual reports e-course. You can also sign up for the Nonprofit Annual Reports Insider, a free monthly e-newsletter.
