Even though nonprofit organizations aren’t required by law to publish annual reports, most nonprofit leaders recognize the value reports can provide. A well-written annual report will help you demonstrate your accomplishments to current and future donors, cultivate new partnerships, and recognize important people. Nonprofit managers working on annual reports most frequently ask these five questions.
Do we Really Need an Annual Report?
Yes. You don’t need a beautiful, full-color, glossy 40-page production, but you do need some sort of accounting of the organization’s work over the past year. Even if it is only a two-page flyer you photocopy, you should get in the habit of producing an annual report. Nonprofit reporting helps you maintain transparency with your donors and potential new donors.
What’s the Most Important Part of an Annual Report?
The most important part of a nonprofit annual report is the description of your accomplishments. 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? Don’t assume that readers will automatically understand how your activities help you achieve your mission. Connect the dots for them.
What Needs to go in the Financial Section?
The financial section of a nonprofit annual report should clearly explain where revenues come from and how they are spent. It’s also helpful to include pie charts, bar graphs, or other visuals that help readers see the big picture and understand financial trends. A short narrative description is also essential, explaining in plain English the meaning behind all those numbers.
How do we Handle the Donor Lists?
Organize your list of donors however it makes the most sense for your organization. Most nonprofits organize donors by contribution level and then alphabetize each of those lists. You can also alphabetize the full list without regard to donation level.
Samples of Annual Reports for Nonprofits
If you aren’t sure how your annual report should look, spend some time looking at other annual reports to discover what you like and don’t like. You can find links to over 100 nonprofit annual report samples. See how other organizations in your field or geographic area are designing their reports. Nonprofit reporting is an easy way for your organization to demonstrate successes and ensure donors know their money is going to good causes.
About the Author: Kivi Leroux Miller provides training and personal coaching on all aspects of nonprofit marketing and communications to organizations big and small across the U.S. If you want to write newsletters and annual reports that your supporters will love or create websites and blogs that educate and inspire, visit Nonprofit Marketing Guide, where you’ll find a free e-newsletter, articles, webinars, e-courses, and more.
Updated: February 15, 2022