The five key components of a successful annual report

When it comes to non-profit annual reports, donors want to take away just three points: What were the results of what you did? Why did you spend your time and money the way you did? What difference did you make?

Whether your annual report is just a few pages long or a mammoth 40-page book, it needs to answer those three questions, while also making donors feel valued. As your report to the community, it is a key donor communications tool. But what’s often overlooked is that it’s also a valuable fundraising tool. By showing your donors gratitude and how much their generosity benefitted your mission, it encourages them to renew their support.

An effective annual report, regardless of the number of pages, answers those three points with these five key elements:

1. Tell stories from real people. Storytelling is the most powerful tool at your disposal. It allows you to directly show the impact your organization has made on someone’s life. And, it creates context to help your donors better understand your mission, the real challenges you face and the real problems their donations help solve.

2. List your accomplishments rather than your activities. Many organizations assume that an annual report needs to describe activities from the past year. But simply recapping activities doesn’t necessarily connect donors to your mission. Instead, explain what you accomplished with those activities. Donors want to know the difference you made, not what you did.

3. Show your gratitude. Say thank you. Then say thank you again. And again. Your annual report is an opportunity to show supporters how much you appreciate their kindness and generosity. While many non-profits use their annual report to list all donor names, this isn’t the only way to say thank you. (And, depending on the number of pages in your report, may also not be possible.) The stories you tell, the photos you choose, the words you choose, and the overall tone of your writing is what should convey your gratitude.

4. Explain your financials. Simply dropping the entire audited financial report means very little to most donors. Many people don’t understand financial statements and those who do are not likely to take the time to examine them to draw out the meaning. As well, complete audited financials take up a lot of space, and because annual reports can be expensive to produce and print, every page counts. 

Unless you feel strongly that your organization benefits from printing a complete set of financials, leave them out in favour of a graphic (such as a couple of pie charts) and a short narrative that explains how you raised and spent the money.

5. Look to the future. While an annual report is most definitely a look back at the past fiscal year, you’d be remiss if it didn’t include a forward-looking vision. How does the past year fit into your strategic plan? Where will you go next? What goals will you accomplish in the next fiscal year? By showing donors your vision for the future they’ll see how you still need their support to make the future a reality.