An annual report is a standard practice and quite often a legal requirement for nonprofit organizations.
But an annual report is so much more than just a financial report. It tells the story of your mission, highlights your achievements, thanks to your donors and builds trust and transparency with your supporters. It’s a great opportunity to showcase your organization!
Writing an annual report may seem like a daunting task, but it does not have to be. With the right plan in place, it can be an inspiring activity to undertake. Don’t worry about being modest – this is the time to celebrate your successes and promote your organization through all the wonderful things you have achieved in the year.
To help you get started, we’ve broken down the creation of an annual report into some easy to follow steps that will give you a solid plan and enable you to create your best annual report yet.
It sounds incredibly obvious but ‘annual’ means that you need to create this report once a year – so try to plan ahead, especially if you know it needs to be written at the same time every year.
Creating an outline for your report is the first step. Annual reports all shared a common outline, so take a look at similar organizations to see what they include in theirs. Do your research and see what information organizations include.
You should be able to find an annual report on every organization’s website. Here’s one from Charity:water to get you started.
The good thing is that the outline of your annual report should be consistent from year to year. So if you have a good format in place you will be able to reuse it. Once everyone understands what information they need to provide they too can plan to prepare it in advance.
If you rely on other teams or staff members for information about financials, programs or beneficiaries, let them know well in advance what your requirements are, so that you all have enough time to compile that information. It can also help them ensure that they collect information effectively throughout the year so that reporting is easier at the end of the year.
At the very least, your annual report should include the below essential information:
During your planning process make sure all of these sections are addressed in your report and people know who is responsible for gathering the corresponding information.
Once you have your information, and your plan, you can decide on things like layout and format, number of pages and design.
Donors want to understand where their money has gone, and what it has helped to achieve. Transparent financial information builds trust and helps prospective donors and partners see that you can manage your funds effectively.
Neverthirst and World Help both have sections on their website where they report on their annual financial statements. They have included previous financial statements as well as new ones, which helps to build credibility and trust
You should include all of your financials in this report, in particular, a breakdown of how much information was spend on key areas such as programs, administration, and fundraising
An annual report is a time to bond with your donors and to recognize their contributions and achievements. While it is about your organization it is also about them, and how they have helped create change.
Include information about any major donors and corporate partners, as well as take every chance to thank all your staff, volunteers and donors for their contributions – both financial and non-financial. In Amigos International’s annual report, they have dedicated a page to calling out and thanking all of their corporations and foundations, as well as donors who have donated more than $1k.
Your donors want to know that your organization is making a difference so there should be a section of your report that celebrates your wins and your progress towards achieving your goals.
For example, if your goal is to end homelessness, you should demonstrate how your programs and projects have contributed to ending homelessness – in facts and figures.
These should all be centered on the mission of your organization, and your reason for existing. Highlighting your mission, and your progress towards achieving it will help to inspire your donors and reaffirm your commitment to your cause.
There is a lot of information to convey, so use visuals such as infographics and pictures, so that your report is more engaging to your readers.
Stories are also a way for your supporters to connect with your beneficiaries, and to understand the real impact of your work on their lives. It’s important to have a mix of facts and figures alongside personal stories so that you are demonstrating both the rational and emotional impacts of your work.
Finally, your annual report should inspire supporters to continue giving to you, as well as provide them with other opportunities for engagement.
Whilst it’s important to celebrate your wins, you should also talk about the road ahead. Highlight why your cause is still needed, what your plan is for the next 12 months and what problems still need to be addressed.
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