Even though nonprofit organisations aren’t required to produce an Annual Report like publicly traded companies are, most nonprofit managers recognise the value of producing one. An Annual Report can help you demonstrate your accomplishments to current and future donors, cultivate new partnerships, and recognise important people.
It is difficult to know what information should be included in an Annual Report and what should be left out. The following ten tips will help you craft an outstanding nonprofit annual report.
- Focus on accomplishments, not activities in your Annual Report.
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 organisation to your mission statement. Don’t assume that readers will automatically understand how your activities help you achieve your mission.
- Keep it simple and concise, you do want people to read it!
Getting a high-speed connection in the office and new accounting software may be big accomplishments from where you sit at your desk, but they have nothing to do with your mission. Inspire donors with accomplishments related to your mission in your annual report and leave all the administrative items for your board report.
Donors expect you to raise money, but fundraising accomplishments should not be celebrated in your Annual Report on the same level as your mission-related accomplishments. Readers are more interested in what you did with the money than how you raised it.
- Include photos – many of the people reading your Annual Report won’t actually read it. Show them what you’ve been doing with photos. If you don’t have a digital camera, fundraise for one now.
Now that you’ve got them looking at the photos, tell a story with your captions. Don’t just state what’s in the photo. Connect the photo to an accomplishment. If people read nothing but the captions in your annual report, they should still get a sense for the good work you did last year.
- Include personal profiles. Donors will be more impressed with real stories about real people than general summaries of your work. Explain what you have accomplished overall, then humanise your statistics with some personal profiles. Highlight how your work helped a specific individual. Share a volunteer’s story of how they made a positive difference.
- Explain your financials. Many of your donors won’t know how to read a financial statement or won’t take the time to read it. Include a paragraph or two that explains in plain English what the tables say. Where does your money come from and how do you spend it? What are your main fundraising strategies? Did you implement any cost-savings measures this year?
- Look at other groups Annual Reports – this will indicate what works and what doesn’t.
Finally, check, check, and check again that all the information submitted is correct and fits into the right timeline that your Annual Report is discussing.