The answer is, it depends. Annual reports take a lot of time to produce and there’s no guarantee your donor will read it. But if you can produce one that’s filled with gratitude and shows your donors how they’re helping you make a difference, then yes an annual report makes sense.
You don’t have to do an annual report, but you do need to share accomplishments with your donors. Some organizations send short progress reports a couple of times a year or monthly e-updates.
If you do decide you want to produce an annual report, here are a few things to keep in mind.
Your annual report is for your donors
It’s not for your board and you don’t have to do it the same way you’ve always done it. That means it’s time to re-think the massive, boring booklet.
You may want to consider different types of annual reports for different donor groups. You could send an oversized postcard with photos and infographics or a two-page report to most of your donors. Your grant and corporate funders might want more detail, but not 20 pages. Aim for no more than four pages.
Show your donors how much you appreciate them
Donors want to feel good about giving to your nonprofit. Think of this as a gratitude report.
Focus on thanking your donors for their role in helping you make a difference. Get inspired by some of these examples from Agents of Good. Annual/Gratitude Reports
How are you making a difference?
Too many annual reports are just boring lists, such as number of clients served, and tend to be one big bragfest. You need to share specific accomplishments that show how you are making a difference.
Something like this – Thanks to you, 85% of the students in our tutoring program are reading at their grade level or above and now have a better chance of graduating from high school on time.
Tell a story
Donors love to hear about the people they’re helping. You can tell a story with words, a photo, or video. Share a success story. For example, Cara, a third grader at Riverside Elementary School, used to get butterflies in her stomach if she had to read aloud in class. The words didn’t come easy. Now after weekly tutoring sessions with Alicia, one of our volunteer tutors, her reading is much better and she doesn’t dread reading time.
Make it visual
Your donors are busy and don’t have a lot of time to read your report. Engage them with some great photos, which can tell a story in an instant. Choose photos of people participating in an activity, such as Alicia helping Cara with her reading.
Use colorful charts or infographics to highlight your financials. This is a great way to keep it simple and easy to understand. Sprinkle in quotes and short testimonials to help break up any text.
Be sure your report is readable. Use at least a 12-point font and black type on a white background.
Write as if you’re having conversation with friend
Most of your donors don’t use words like underserved or at-risk, and neither should you. Use everyday language such as – With your help, we found affordable housing for over 100 homeless families. Now they no longer have to live in a shelter, motel, or their cars and have a place to call home.
Write in the second person and use a warm, friendly tone. Of course, use you much more than we.
Annual reports do make sense if you can create one your donors will want to read.
Click here for more information on annual reports.