Ahh, it’s annual report season. Or, perhaps better described as “oh no, what actually happened other than continued COVID recovery this year and we don’t have photos and who is running the donor list and shoot, when are those financial reports actually going to get done” season. I get it because I used to be the person trying to pull all that data together, deciding what in the world we could leave out to save a little time and trying to determine if anyone was actually reading the darn things.

In the spirit of trying to give you back a little of your sanity and saving you precious time I know you’d rather be spending trying to fundraise or figure out how in the world operations are going to move forward in a post-COVID world, I put together this guide on creating an annual report that will inspire others to join you in doing the work that really matters. And in a really meta/Sesame Street kind of way, the section titles spell out INSPIRE:

• I is for include

• N is for nix

• S is for story

• P is for photography

• I is for identify

• R is for requirements

• E is for example

Here is just a glimpse of what you’ll learn in this post:

• The most common items included in nonprofit annual reports

• What every story you share will need to do

• How to plant the seed with donors on your need for future gifts

• How to avoid making a major mistake with donors in your report

• The number one way to maximize your valuable time and get your report done faster

What to include in your annual report

Before you ever open a design program like Canva or Adobe Illustrator, you need to first create your table of contents and decide what you’re going to include in your annual report. There are many reasons this approach is best but here are just a few:

• You will have a much better picture of how many pages your annual report should include if you plan your content first. 

• You will inevitably think of something you want to add as you plan and save yourself time by not having to redesign your pages later.

• You will be able to design the report much faster once you have all of your content already written out. 

The easiest way to accomplish this step is to start a Google Doc. Take advantage of all the ways you can share and collaborate on Google and be able to access your notes from anywhere (incredibly helpful since so many are working from somewhere outside their office right now). If you need a checklist of common items included in annual reports, here’s what I tend to see the most:

• Welcome Letter/Introduction from either an ED or Board Chair

• Summary of Highlights for the year

• Financial Information

• Stories of Accomplishments from the year (with lots of photos and detailed captions)

• Future Growth plans

• Donor List

*Note, this year, I expect many will also include a Coronavirus section to expand on challenges related to the virus and how they overcame them.

What to nix in your annual report

Deciding what will NOT be included in your annual report is just as important as deciding what will be included. This is not the time to make your annual report 40-pages long and bore your readers with mundane details about the year. 

So what should you leave out? It will vary from organization to organization but in general, here’s what I would skip:

• Any details that need in-depth explaining or would be of little interest to donors. Remember, this report is not about you -- it’s about the donors and volunteers who enable you to do the work. 

• Any hard fundraising asks should be nixed. This report is not about raising money -- it’s about inspiring your audience and helping them connect how their contributions have moved your mission forward. When done right, they’ll be plenty inspired to give during your next campaign. 

• Long (really long) letters from staff, board members, etc. Most people will browse an annual report and skim articles, at best. Force yourself and those who contribute to be as brief as possible. A good rule is to take your original draft and then reduce it by 50%. 

Annual report stories

The single best section you can include in your report is an emotional story that demonstrates the impact of the work you do and what your community might look like without you. While protecting the privacy of your clients or constituents and having advanced permissions are critical, the storytelling aspect of your report will be your home run. 

So how do you do this? Reach out early to clients who might be willing to share expanded testimonials and leave yourself plenty of time to transform their experience into a story that will inspire others. The best stories begin with a descriptive setting, include a challenge and then a triumphant ending. 

This is also a great opportunity to use your email list. Send out a call for stories of those who have been impacted by your organization and choose the ones that will resonate with the largest audience. 

You will want each story you share to tie back to giving -- either from financial gifts or volunteer hours. Every story you share will need to make the connection clear that these stories are only possible through the support you receive. 

Use great photography

Great photography will make or break your annual report. And while photos of actual clients, volunteers, staff, and events will always be the best route, stock photography may be necessary as well. (Be sure to read this post about using stock photography) 

If you’re planning to print your annual report, you will want photos to be very high-resolution. The generally accepted value is 300 pixels/inch. If you’re publishing it online, you can get away with a little less quality but I still recommend aiming for print-quality photos whenever you can. 

The best photos will showcase only one or two people and evoke emotion. You should always include captions with the photos as well that explain who is in the photo and what is taking place. 

Identify opportunities

While the primary purpose of the annual report is to report on what has already taken place, these reports are a great way to showcase future opportunities. Perhaps you’re thinking about relocating to a larger space, adding a program or service, or launching a new partnership? Use a ¼ page to share about that opportunity and tease it a bit. This will set the stage for when you make an announcement on your website, social media, or send an email about it.

Or, if you’re planning a global expansion like many humanitarian organizations, dedicate a portion of your report to the plan, your needs, and your ideas. If global growth is the area that makes the most sense for your organization, it will likely require territory research, looking for FTL freight shipping quotes, and plenty of awareness. Dedicate a page of your annual report to the project, budget, and specific needs.

It also plants a seed that you might need additional support in the future, opening up a clear pathway to make additional asks. 

Nonprofit annual report requirements

Ah yes, the actual meat and potatoes of the report are the required sections. I’ll use the word “required” loosely here as there are very few organizations that are mandated to produce an annual report. Instead, these are more likely recommendations of sections that have come to be expected within annual reports.

Financial reports including cash flow statements, income and expenses, and a breakdown of where your income was from will most likely check all the boxes. It’s important to share this information in a clear and concise manner that any reader could understand. Using charts and graphs can help break up a page full of numbers, as well. For example, you can create a flowchart for showcasing processes, movements, sequences, and more. You can always use a summary version as well and then direct readers to visit your website for the full audit report, etc. 

Some nonprofits include detailed financial reports, major expenditures related to expansion or growth, etc. While these are significant to the organization, they can often be adapted as an attachment to the report, available for download online, etc.

Donor lists also tend to be on the required/recommended list. These are quickly becoming controversial in light of privacy concerns and the enormous task of making sure they are 100% accurate. Whether or not you include donor listings is completely up to you -- just be sure to follow through on your word if you promised recognition for specific donor levels. 

One easy way to reduce this burden (and avoid making a big “oops” with donors) is to use your website for the donor listing and include a broader thank you in the report. This allows you to make adjustments quickly if someone was accidentally omitted or decides they no longer want their gift to be public. To accomplish this, simply create a dedicated page on your website to list the donor names and giving levels but do not add it to your website menu. Instead, copy the direct link and print that in your annual report. 

Great nonprofit annual report examples

Finally, you’ll want to use an example or template to help you pull all of this information together. Starting from scratch is completely unnecessary when there are so many resources available online. The Greater Pittsburgh Community Food Bank (print version) is a great example I found online that hits most of the marks we’ve talked about here. 

Or, you can literally save hours and hours of work by starting with a template. By using a template, you’re able to visualize how the content will be displayed as you create it and then easily customize it to fit the look and feel of your organization. Plus, you can rearrange pages in the order you want, add pages, or delete the ones you just don’t need. 

My annual report template is ridiculously inexpensive because well, I don’t listen to my business coaches, haha!

In all seriousness, I believe templates are the number one way to maximize the little time you have for all the extras required of nonprofit leaders. And if you’re not ready to make the jump and purchase a template, you can always grab my free template bundle just to see how the process works first. 

Once your annual report has been designed, you’ll need to decide how you’re going to share it. There’s a big movement to digital reports and a strong case to be made for avoiding the printing and mass mailing costs, especially in a year like this one. I’m planning to share another post very soon about both methods, the pros and cons, and how you can decide which one is right for you.

That’s all for now! Keep doing the good work and being a light for your community.

Until next time,

Andrea

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