Is Your Nonprofit Making the Most of Its Annual Reports?

Annual reports are used to provide operational, business and financial information to all stakeholders. An annual report is, therefore, an opportunity for your tax-exempt organization to showcase its accomplishments, build trust, and attract more volunteers, and donors, etc. It provides the past, present and future direction of your organization. Annual reports are the most coherent picture of your nonprofit.

Annual reports typically include information on:

• Corporate information
• Operating review
• Financial standing
• A director’s report
• Information on governance
• Statement from chairpersons
• A report from the auditor as well as non-audited information
• Statement of Financial Position or balance sheet
• Other financial statements and information

Before you start writing your organization’s annual report, there are two questions that you should use as a guide: What am I trying to accomplish and who is my audience. An annual report is an important tool to communicate with all stakeholders– both externally and internally about your organization. Annual reports afford you:

An Opportunity to Showcase Your Achievements: The principal purpose of highlighting achievements in your annual report filing is to make stakeholders such as donors and prospective donors know that their donations are being put to good use. The ‘achievements’ are an opportunity to make a case for further donations.

An Opportunity to Strengthen and Reinforce Your Brand: A good place to start is to ask yourself how your work is impacting individuals, communities, and society. Answering these questions through first-person narratives or impact statements, photos, videos, etc., humanizes your work and strengthens your brand.

An Opportunity to Demonstrate Great Financial Management: Annual reports provide data on your organization’s fiscal year. Data is particularly helpful in reinforcing your message. By using graphical financials such as charts with callouts you make your annual report easier to read and digest.

An Opportunity to Build Enthusiasm: Does your annual report make you proud to be part of your organization? Does it motivate employees as well as volunteers to continue working for your organization? Stakeholders want to feel a sense of purpose, so giving them clarity on what is expected, sets them at ease and builds a purpose within them.

An Opportunity to Talk About Future Plans: This provides all stakeholders in your organization the opportunity to learn more about the direction your organization is going and how you plan to allocate resources. You do not have to lay out in-depth future strategic plans; in many cases, a short action plan is sufficient. All in all, your goal should be to have stakeholders buy-in to your plans and to secure their commitment to achieving these goals.

It is important that you never buy into the thought that ‘nobody reads that stuff’. Yes, it is true that most scan through or do not read the whole report, yet the most important stakeholders do spend time going through your report. Write an annual report that is interactive, and rich in infographics and visuals to get through to those who are distracted, and informative enough for those more invested in your cause.

If you have any questions or need help with your annual report, contact us today to talk to one of our experts. We can assist your nonprofit organization with a variety of services ranging from annual report preparation services,  fundraising registration services, corporate registration services, nonprofit bookkeeping services, etc.