What purpose does your nonprofit’s annual report serve?
Here in the US, the IRS requires you to file one every year. But what they have in mind is the 990… a financial form.
Beyond that, your options are myriad.
Too many organizations see an annual report as part requirement and part brochure.
But if yours is meant to be a sales piece, is it selling? How do you know?
And if reporting is a legal requirement, couldn’t you do more?
What if your annual report could multitask?
And raise money, too?
Do I have your attention now?
Your annual report can:
- Fulfill your reporting requirements
- Show your organization’s great work
- Demonstrate your effectiveness
- Thank and credit your donors
- Raise some money
All at the same time!
Easy enough – but often, presented in a way that causes eyes to glaze over.
Your donors will be interested in your financial information, too – if you present it in an interesting way.
Answer a couple of questions with your financials:
- Did we do what we said we’d do?
- Can we be trusted?
Think simple – and offer explanations. Very few people will want to wade through your balance sheet and budget in detail. Instead, offer the big picture. (You can make detailed information available separately.)
Often, a simple chart or infographic may tell the story better.
Show your organization’s great work
Careful here. Yes, it’s your work… but it’s impossible without the donors and funders who support you.
So hand off the credit. You don’t need credit, you need support.
This is where stories shine, because “show” is always more effective than “tell”. Focus on the people you help, or the work accomplished.
Then always credit your donors.
No holding back. Be emotional – this can’t be a press release or a list of facts. Tell stories. Pull people in. Make them feel invested in the story and the people you write about. Then, when they’re feeling amazed… give them the credit.
Picture your donor walking around, chest puffed out a little bit, self-esteem running high because they did something great. This is the part of an annual report where a skilled writer can be especially helpful.
Use great images to tell the story, too.
A picture is worth a thousand words – if it’s the right picture.
Don’t go for glamour shots of your organization. Be careful about staff celebrations (though donors do like to see the staff).
Choose images with impact. That usually means one person, eyes on the camera. Look for the images that immediately affect you. That don’t require lots of explanation.
Then be sure the images are captioned, just to be sure. You know what’s going on – your reader may not.
Demonstrate your effectiveness
Your annual report is a report card. What worked? What didn’t? What did we learn this year?
This need not be lengthy. But an honest reflection builds trust. If your organization tried something and it didn’t work as planned, it’s good to say so. Share the learning. That honesty builds trust. And trust builds the foundation for your future requests.
Charts, graphs, and some copy can usually be helpful here – and can make complex ideas easier to understand.
One note: Your mission accomplishments are interesting. Your fundraising success is not. (Sorry!)
Outcomes, not outputs. Focus on what was done, not how you did it.
And speaking of lengthy… you don’t really need to include a letter from your executive director or board chair. Is what they’ll say new or interesting? If it’s not, take a pass.
And if it is needed, keep it short. And keep it focused on gratitude, not back-patting.
Your donors and funders are your partners in mission. Make this report all about gratitude. You want to keep those partners around, right?
Thank your donors
Credit is one thing – and important. But don’t forget to say thank you as well. We know donors will look for their names. So it may be important to them that you do a list. But keep in mind that you have opportunities throughout this document to make donors feel appreciated. A name listed is nice, but not sufficient. (Want a great example? Check out the “Gratitude Reports” Agents of Good does.)
Should you list your donors?
The best answer is “it depends”.
- Have you said you would – is it a donor benefit?
- Can you be sure your information is correct?
- Are you sure your donors approve of their names being listed?
If you list, be sure the listing is correct. No forgotten names, no misspelled names. Keep your data clean! One way to be sure you have it right: include the annual report listing in thank you letters.
You are so important to our work! We would like to list your name with other supporters in our annual report. Our records indicate your preferred listing is Mr. John Smith and Ms. Andrea Murphy. If this isn’t correct, or you prefer not to be listed, please contact Mary to let her know.
And while you and other staff members should feel proud of all that your organization accomplishes, there are better ways to celebrate than this report. Have a party. Maybe a year-end bonus. Bring staff to a board meeting to be applauded. If you’re the ED, send notes thanking each staffer personally for her or his contribution.
Raise some money
If you go to the trouble and expense to create an annual report, why not make it clear that you need support?
You can weave that message throughout the report.
Celebrate what you (including your donors) have accomplished, but be clear that the job isn’t done yet. Let them know they’re still needed – as well as appreciated.
For a print report, include a cover letter with a request, a response form, and an envelope.
There is real value in a print report. (People will share them, for instance.) But if you intend to publish only online, be sure you let people know it’s been published and include a link to a special donation landing page.
If you make your readers feel great about what their gifts have done, you will likely see more gifts in response.
Focusing on donors will help, not hurt, your annual report
Prospective supporters, the media, and any other audiences you have for this report will not be put off by a grateful organization. You can still make sure your organization shines. It’s amazing how bright you look when you bask in the reflection of your wonderful supporters.
You don’t do your work alone. If you want to keep the partners you have – and invite new ones to join you – you have to make their important role clear.
Why waste time, money, and effort on a brochure when you could create a meaningful donor relations engine instead?