For many nonprofits, the yearly annual report is often just another task on a very long to-do list. Most charities are juggling a lot—development, program maintenance, fundraising, and more—and the annual report can feel like yet another mandatory routine project. One that often gets handled at the last minute without much intentional care and effort.
Even though annual reports are an industry standard, most nonprofits don’t realize how fruitful an effective annual report can be. An annual report that prioritizes storytelling, transparency, interactivity, and more can actually bolster donation solicitation efforts and become a lucrative fundraising tool.
Before we jump into the nitty gritty of strategic annual reporting, let’s cover the basics.
What is an annual report?
Think of an annual report as a “year in review”—like a yearbook of sorts, but for donors, supporters, and partners to look at the highlights of any given year at your organization. Of course, a lot can happen in a year (nonprofits know that best), but with an annual report, you can summarize all the year’s milestones including your impact, accomplishments, new developments, and more.
Annual reports can be created and presented in a variety of ways—both digitally and in print. Depending on the needs, audience, or even constraints of the individual nonprofit, you might choose to create a printed booklet or pamphlet (which could then be mailed to supporters and donors or handed out at events). Or, in line with more frequent developments in the space, you could turn to digital software tools to create an annual report that intrigues readers with more vibrant visual elements like photos, videos, and clickable links.
What does an annual report include?
Every nonprofit’s annual report is different, depending on its mission, values, impact, audience, and more. However, most organizations include a few standard elements:
- Stated mission and values
- Accurate financial data
- Examples of impact
- Major accomplishments
- Program and initiative assessments
- Event highlights and recaps
- Donor and board member lists
- Contact information
Though every nonprofit is required to submit a Form 990, most organizations take their reporting a step further and create a yearly review that includes more audience-centric material (like the topics listed above).
Now that we’ve covered the basics, let’s dig into the best part of annual reporting—the ability to create the ultimate fundraising tool.
5 Ways Effective Annual Reporting Drives Donations
One of the most important marketing strategies for any organization or business is the ability to tell a story. Like for-profit companies that develop brand stories to target specific audiences and connect with consumers, successful nonprofits do the same. In turn, donors feel more connected to the mission and therefore more motivated to contribute.
One of the best ways to really nail storytelling in your annual report is to invest in visuals. From photos of beneficiaries to videos of volunteers in action, visual elements allow readers to feel more drawn to your mission. By ditching the long, text-heavy paragraphs and clunky statistics, your audience will be more emotionally tied to your work.
2. Trust and transparency
Trust is essential to long-term donor retention. In order to build trust, organizations have to commit to transparency, so donors feel confident contributing to their mission.
The annual report is the perfect opportunity to showcase transparency. By including accurate financial data (which unpacks revenue, expenditures, program costs, and more), as well as specific metrics around impact, supporters will feel at ease contributing. When donors can see exactly where and how their money is being spent, you’ll bolster your fundraising efforts.
Pro tip: Financial data can often feel dense and bland—no one wants to read a long list of numbers and sift through pages of dry financial data. When creating your annual report, be sure to present your finances and measurements of impact in visually appealing ways. Consider creating easy-to-understand graphs, charts, and infographics. Or, consider embedding a video that entails a quick financial overview.
Though many nonprofits still produce paper annual reports and mail them to supporters via snail mail, new trends in the industry are pushing the nonprofit sector to go digital. And, there’s a good reason for it. Not only is going digital, and focusing on mobile-friendly solutions eco-friendly, digital reporting attracts new, younger audiences and keeps stakeholders more engaged than ever before.
By using digital report software, nonprofits can embed clickable donation links, social media posts, and even audio clips of recorded beneficiary testimonials (talk about interactive!). This digital-first type of reporting brings supporters right into your story and mission and makes them feel like an essential part of your work (that means more funding).
A “thank you”—no matter how big or small—can go a long way. For nonprofit experts steeped in fundraising and development, gratitude should be a no-brainer. Follow-ups, social media “shout-outs,” and donor and volunteer awards are just a few examples of how nonprofits show appreciation.
One of the simplest and most effective ways to express gratitude to your communities is to include them in your annual report. Photos, accomplishments, lists of names, and more are small ways to extend sincere thanks to all who supported your mission throughout the year. When donors feel appreciated, they’re more likely to give again—talk about a win-win.
Pro tip: Including the names and photos of donors, volunteers, and other stakeholders in your annual report allows for some organic sharing. Those included in your report might feel inspired to share your impact, and their involvement, online with colleagues and other potential donors.
If your annual report includes all of the preceding elements, you’re on your way to inspiring action (or, inspiring a contribution to your work).
Though the annual report is a great place to showcase all your yearly accomplishments, it’s important to include future plans and goals for the upcoming year as well. If supporters are aware of upcoming initiatives, programs, and more communities and populations in need, they’ll be compelled to pitch in (vs. feeling like your work, and their work, are done)!
Pro tip: When including future projects be sure to be specific about your goals and impact. Why are these new goals important? What do they accomplish? What is the exact impact that they will have? The more granular you can get, the better.
Josh Kligman, CEO of Yearly, is passionate about helping you turn annual reporting into an incredible fundraising opportunity. Make the most out of your efforts and create a report that checks off your “to-do” list and amplifies your fundraising efforts at the same time. Besides helping 2,000+ nonprofits create engaging annual reports, Josh has helped launch and run nonprofit brand national and local campaigns and media partnerships for 10 years, using television, radio and web, to amplify the reach of campaigns. Prior to Yearly, Josh advised Fortune 500 advertisers like AOL, Wendy’s and Home Depot, providing unique opportunities for monetizing online real estate. Josh received his B.A. from American University and his M.B.A. from American University in Marketing Management and Entrepreneurship. Want to learn more?
Join me and Josh for a live, 15-minute crash course!
Want to get rid of your “dry as dust” annual report? Ready to invest in a report that will yield a positive return on investment(ROI)? Transform Annual Reports into Gratitude Reports for the Best ROI!
We’ll be chatting Tuesday, January 24th, at 11 a.m. PT/2:00 p.m. ET. You’ll be able to submit questions during the chat. If you can’t attend live, be sure to register to get access to the recording.
Photo by Joel Muniz on Unsplash