It’s a new year. Time to think about your nonprofit’s annual report. The project may seem daunting – people often approach it as their one opportunity to tell EVERYTHING the nonprofit has done for the past twelve months – all the programs, all the activities, all the issues, all the supporters. Let’s talk about what REALLY needs to be included – then, let’s cut out all the extraneous material so we can produce something interesting to read.
The nonprofit annual report traditionally includes:
Executive Director’s Message
This letter is usually the first thing the reader sees inside the report. It sets the tone, establishes a theme (if used) and summarizes the report.
The Executive Director’s message should introduce major accomplishments of the previous year as well as bring up any negative issues or challenges (Hello, COVID) that have occurred and how the organization has addressed those issues. Finally, this is the one place that you can – briefly – report on a current or planned future activity. In fact, writing a positive paragraph about the year to come is a good way to close the letter.
It’s always a good idea to reinforce your organization’s core mission in a simple, concise way. The easiest way to accomplish this is to print your mission statement in a sidebar box or perhaps as a callout on the ED message page.
Accomplishments and Highlights
This is the main purpose of your annual report – to report the accomplishments of the organization over the past year. It isn’t good enough to simply report activities, “we did this and then we did that and then we did this other thing….” It’s important to tie your activities to accomplishments: “We held a virtual fundraiser which helped raise visibility of our organization and its mission.”
Choose 3-4 activities that highlight your accomplishments and peak interest in your organization. Support these pages with strong graphics – photos, callouts, sidebar shorts – to carry the reader through. In many cases, these graphic elements may be all the reader reads.
In addition to photos and graphics, use statistics and numbers to tell your story. On the surface, numbers don’t sound all that interesting, but if you feature them in a graphic way, they can become a key element on the page. Sprinkle them throughout the report like you might with testimonial quotations. Or, gather them all together onto one page: “XYZ Association By the Numbers.”
Case Studies and Client Profiles
Real words from real people are the best way to make an emotional appeal. It also allows other people talk about your good works without sounding like you are bragging. Tell the story of a client who was impacted by your programs. Or, profile a volunteer, a board member, even a staff member talking about a specific activity or program and how it impacts the community.
Shoot photos or video of your interview with the client and then use an edited version of the video on your website, at a fundraiser, and as a link on Facebook to provide consistency to your message across multiple communication channels.
Providing financial information is not a requirement for a nonprofit annual report, as it is with a for profit company. But it does provide supporters, donors and potential granting agencies a snapshot of your organization.
Printing your entire audited financial statement isn’t very interesting copy and really isn’t necessary unless the nonprofit has had past financial concerns.
Pie charts can be a colorful and fun way to present complex information in an easy-to-understand format.
Use the actual chart to illustrate your copy. Make sure the graphic is simple and condense your numbers so that each pie has no more than five or six slices.
Accompany pie charts with a descriptive paragraph that explains the meaning of the numbers.
The donor list page(s) may well be the most popular page in the entire report. You should list all of your major donors who contributed in the past year. Group the donor list by level of contribution to provide a way to edit the list if it is extensive, i.e. only list names at a specific level and above.
As with financials, you cannot afford any errors on the donor list. Proof this carefully to make sure names are spelled correctly. Most people will open the AR and go straight to the page with their own name – and they will remember if you spelled their name wrong!
What to Leave Out
Here’s what you should leave out of your annual report:
Too much background detail. Edit your copy so that it is interesting and readable.
Administrative inner workings. Readers are not really interested in your new membership software.
Personal staff or board news.
News that excites only you and your staff. Earning a certification is important and newsworthy for your newsletter, but not for the annual report.
Failed efforts. Focus on project successes. If you must include a failure because it was public fodder, focus on lessons learned.
Future activities. The Executive Director’s letter can hint at the future, but the purpose of the annual report is to focus on accomplishments of the past year.
Now that you have the content for a compelling Annual Report, up next, we’ll share some theme ideas and delivery options to consider.