The 1-2-3 of Annual Reports

If you’re the director of a nonprofit (especially an emerging one!), creating an annual report can seem like one more thing on your never-ending to-do list. However, it’s an important document that illustrates your organization’s mission and impact and demonstrates your fiscal responsibility—key elements in making a strong case for continued financial support.

Foundations often ask for an annual report in grant applications; while it’s usually optional, providing a copy showcases your accomplishments and builds trust in your finances, positioning your organization well in a sea of applicants. Donors expect to get a copy once a year, and flipping through the pages (either literally or digitally) should give them the “warm fuzzies” about having supported your work throughout the year. Annual reports also provide an opportunity to acknowledge and thank staff, volunteers, partners, donors and other essential constituents.

Many organizations are opting for websites (examples here and here) in lieu of traditional printed reports; however many still find a need for the glossy booklet, especially for those donors and supporters who have not fully embraced the digital age.

Never created an annual report? Start simple, and start small. Think of it as the Cliffs Notes of your organization’s past year—a snapshot of how you raised and spent your finances, and how and where you made your impact. You can get a round-up of the key components of an annual report here and here. Start by collecting the “raw data”—your organization’s financials (i.e. statement of activities, sources of income); staff and board member names; key stats (e.g. attendance figures, adults and children served, membership numbers); descriptions of programs; and a list of donors’ cumulative giving totals. Then, the fun begins—putting it all together to tell a compelling story! Here are my three main drivers when I sit down to design an organization’s annual report. They ring true whether hardcopy or digital. 

1. Consider your audience and budget.

Start by thinking about your audience and what would speak to them. To whom will you be sending it? Donors? Foundations? Community Partners? All of the above? Then, determine your budget and plan accordingly, factoring in design, printing and mailing costs. If you’re on a shoestring, you can try designing yourself using websites such as Canva and/or opt for a shorter at-a-glance report. If you do have the budget for a writer and/or graphic designer, they will offer a fresh perspective of outsiders looking in and lead you to a more professional-looking product with (hopefully!) fewer blood, sweat and tears. If your audience would be just as engaged with a digital version and/or a website, you can save on printing and mailing costs but should consider budgeting for a web designer.

2. Find the voices.

Telling your organization’s story begins with finding the characters who will bring it to life. Most annual reports open with a letter from the President or CEO, but you should also identify other constituents who can help tell a more diverse and engaging story. Look far and wide—visitors, beneficiaries, donors, members, community partners (don’t forget staff!)—for quotes that you can sprinkle throughout your annual report. I recommend keeping a running Word document of quotes that you collect throughout the year. If you don’t have enough at the ready, don’t be shy about asking key people directly. Community partners are likely to show solidarity in your quest for quotes, and other dedicated supporters will likewise be happy to help you tell the story. If you have room, pull out a few people that you can spotlight in a longer paragraph or so.

3. Put it in context and make the connections.

Your annual report is meant to be a round-up of your organization’s hard work over the past year. But before you go into accomplishments, staff, and financials, give readers a snapshot of the year at-a-glance. This will set the stage of your organization’s story and give readers some context in which your organization made its impact. Look for the overlaps and where the collective impact was made over the entire year. No one wants to read paragraph after paragraph that goes through each of your program areas—break it up with a focused impact infographic will pack a visual “punch” and will be easier to digest than pages of program descriptions. Here are two examples of effective impact infographics:

Visuals like these will pique readers’ interest and complement the “body” of your annual report, where you will provide more detail about program areas, accomplishments and financials.

Annual reports are a staple—an essential part of keeping your organization’s work transparent and your donors engaged. If you keep it simple and stay true to your constituents and budget, you will gain an effective communication tool—an impactful story that your supporters will want to tell again and again. Need a little help? I’d love to talk to you about my services.

Cover photo credit: on Unsplash

Published by Ellen Spangler

Hi, I’m Ellen Spangler. With nearly twenty years in nonprofits, I’ve seen the good, the bad and the ugly. My first love will always be museums, but I have also cherished my work in education and membership organizations. I’ve worked as a Development Director, Communications Director, Educator, Trainer and Project Manager, and now own and operate a consulting business, Three Notch’d Nonprofit Solutions.

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