Best Practices for Annual Reports for Nonprofits

ByRamona Zepeda

It’s time to think about your annual report! This is a great opportunity to highlight your nonprofit’s achievements, to report on the impact you’ve made, and build trust. As you start, there are a few important things to remember:

1. Connect it all to the donors

Tie everything back to the donors. Focus on their achievements. Don’t just frame it in terms of the nonprofit’s achievements. What did the donors make possible this year? Did their generosity give scholarships to 253 kids? Did their volunteer hours help feed over 500? Do a little humble bragging about your donors.

Focus on each type of donor you have. Chances are there are different ways to support your organization. Do you have individual giving, corporate giving, planned giving? Include short articles on each; how Mary became involved as an individual donor, how ABC Company’s donation built a new gym, and why Hank and Betty decided to name you in their estate plans. Gather quotes on why they became
involved, how giving makes them feel. Personal stories make giving seem more approachable and human. People can imagine themselves giving. This approach can appeal to potential donors by showing them all the ways they can give, and can also motivate a current donor to support in a new way.

2. Make the annual report visual

We all know that a picture is worth a thousand words, and in the digital age it has never been more true. Pictures can grab attention and convey the need more thoroughly, emotionally, and quickly than the most carefully crafted paragraph.

So include pictures! Do you have pictures of the people you help? Before and after pictures on a certain project? Pictures of your volunteers? Pictures of the donors whose story you’re telling? Include them! (And please edit them before you use them. A simple crop can improve a photo dramatically!)

Also use visuals with your financials and statistics. Maybe this is just me, but I find numbers much easier to grasp when I see a visual. Use bar charts, infographics, pie charts (or donut charts if you’re Homer Simpson). This is your chance to get your stats to stick in your donors’ minds.

3. Be clear with your financials

This may seem obvious. And it should be. Be sure your financial data is rock solid but clear as glass. Make sure the areas you are reporting on are consistent year to year. Your donors want to know that you are a good steward of their funds. Be honest, be transparent, and you’ll build trust.

4. Read the annual report over with the eyes of an outsider

Read over your draft as if you knew nothing about your charity. Would you come away with a clear understanding of the mission, values, and impact? While we live and breathe the non-profit life, we can unconsciously assume that everyone knows this or that about our program, or where we are based, or our ways to give. Be sure that your Who, What, Where, When, How, and Why are all there. Also checkto see if you are also including the nitty gritty details of mailing address, who’s on the board, areas served, tax-id, social media handles, website, and who to contact if someone has questions or wants toget involved.

5. Read the annual report over with the eyes of a long-time supporter

If you were reading the annual report of a charity you personally supported, what would you want to ee? I would say:
• Where the money went
• How it made a difference
• A thank you!
• Facts and stories to share

The annual report is an opportunity to get facts, stories, and your gratitude to stick in your donors’ minds. This may motivate more involvement, more giving from them. It also provides them the tools to become your new ambassadors, sharing your story and mission in a personal and authentic way.

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