What do you think of when you hear the word annual report? If you’re a donor you might think “Oh, it’s that long, boring thing I don’t have time to read.” If you’re a nonprofit professional, you might think “It’s such a pain to put together.”
What do you do? Organizations need to share accomplishments and show gratitude to their donors, but is the annual report the way to do that? It can be if you do it well.
Unfortunately, many nonprofits fall short with this. Most annual reports are too long, boring, and basically a demonstration of the organization patting itself on the back. There’s often very little appreciation for donors. And yes, it’s time-consuming to put together.
It’s possible to make this a better experience for both donors and nonprofit organizations. Here’s how.
You don’t have to do an annual report
One way to make this a better experience is to not do an annual report at all. This doesn’t let you off the hook for sharing accomplishments with your donors. You could send short progress reports a couple of times a year or monthly e-updates instead. This makes a lot of sense if taking on a big report sounds too overwhelming.
If you decide to do an annual report, I encourage you to move away from the traditional multi-page one. Aim for something no longer than four pages. Bigger isn’t always better.
Your annual report is for your donors
Keep your donors in mind when you create your annual report and include information you know will interest them. Also, donors have a lot going on, so that’s another reason not to create a huge report that they may or may not read.
You might want to consider different types of annual reports for different donor groups. You could send an oversized postcard with photos and infographics or a one-to-two-page report to most of your donors. Your grant and corporate funders might want more detail, but not 20 pages. See if you can impress them with no more than four pages.
Make it a gratitude report
Donors want to feel good about giving to your nonprofit. Think of this as a gratitude report. You may want to call it that instead of an annual report. Many donors have stepped up to help during the past two years and deserve to be thanked for that.
Focus on thanking your donors for their role in helping you make a difference.
Address the current situations
We’re still in a pandemic, which I’m sure is affecting your work. We’re also dealing with a precarious economy and the heightened awareness of systemic racism. Your donors will want you to address these situations and focus on how they’re affecting your clients/community. I go into more detail about this below.
How are you making a difference?
The theme of many annual reports is look how great we are. They’re organization-centered instead of being donor-centered and community-centered.
They also include a bunch of statistics, such as the number of clients served. You need to share specific accomplishments that show how you’re making a difference.
Focus on the why and not the what. I know your organization has had to make a lot of changes due to the pandemic, but what’s most important is why you needed to do that.
You can say something like this – Over the past two years, we have seen triple the number of people at the Riverside Community Food Bank. As COVID rates fluctuate, we need to ensure that we can continue to serve people safely. Thanks to donors like you, we are able to meet our demands and provide local residents with boxes of healthy food.
Phrases like Thanks to you and Because of you should dominate your annual report or any type of impact report.
Tell a story
Donors want to hear about the people they’re helping. You can tell a story with words, a photo, or a video.
For example – Diana, a single mother with three kids, has been trying to make ends meet with periodic work. Ever since the pandemic started it’s been a struggle for her family. She could barely afford groceries, rent, and utilities. Diana had never gone to a food bank before and felt ashamed to have to do that. But when she reached out to the Riverside Community Food Bank, she was treated with respect and dignity. Now she’s able to bring home healthy food for her family.
Make it visual
Your donors have a lot going on and won’t have much 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 volunteers working at a food bank or a one-to-one tutoring session. Be sure to get permission if you want to use pictures of clients.
Use colorful charts or infographics to highlight your financials. This is a great way to keep it simple and easy to understand. Include some quotes and short testimonials to help break up the text.
Be sure your report is easy to read (and scan). Use at least a 12-point font and black type on a white background. A colored background may be pretty, but it makes it hard to read. You can, however, add a splash of color with headings, charts, and infographics.
Write as if you’re having a conversation with a friend
Beware of using jargon. Most of your donors don’t use words like underserved or at-risk, and neither should you. Use everyday language such as – Because of you, we found affordable housing for over 100 homeless families. This is even more important as COVID-19 continues to be a part of our lives and living in a shelter or with other families isn’t always safe. Now, these families have a place to call home.
Write in the second person and use a warm, friendly tone. Use you much more than we.
Skip the donor list
Think twice about including a donor list in your annual report. It takes up a lot of space and there are better ways to show appreciation. If you feel you must have a donor list, you could put one on your website or just include major funders.
Planning is key
I know putting together an annual report can be time-consuming. One way to make it easier is to set aside a time each month to make a list of accomplishments. This way you’re not going crazy at the end of the year trying to come up with a list. You can just turn to the list you’ve been working on throughout the year.
This will help ensure that your 2021 annual report doesn’t go out in the middle of 2022. Ideally, you should send out an annual report by the first quarter of the following year. When nonprofits sent out their 2019 reports after the pandemic started, it seemed irrelevant.
You also want to create a story and photo bank and you can draw from those when you put together your annual report.
Creating a shorter report or an infographic postcard will also help make this easier for you. Remember, you also have the option of not doing an annual report and sending periodic short updates instead.
Whatever you decide, put together an annual report that’s a better experience for everyone. Here is more information about creating a great annual or impact report.