Communications, Stewardship

The Necessity of the Annual Report

Many nonprofits don’t want to take the time and energy to put together an annual report. Usually, it is because they truly don’t understand the benefits of such a piece. So today, I am going to explain to you why it is important that your nonprofit puts forth an Annual Report.

First of all, think of the Annual Report as your organization’s Accountability Report. This report holds you accountable to your stakeholders: donors, board members, staff, those that you serve, and to some extent the local community. A well done Annual Report not only outlines the financial situation of your organization, but it also provides an organizational update on how your nonprofit has carried out the mission for the past fiscal year.

Your Annual Report is also your Impact Report and it is the perfect opportunity to showcase how you are having a positive impact on those that you serve. You do this through storytelling, providing statistics, and through pictures. Through your Annual Report, you are allowing your stakeholders to experience your mission in action.

The best time to send out your Annual Report is after your audit and before a solicitation. Why? Because you are demonstrating transparency and stewardship. Then, when you send your solicitation, the chances of a gift will increase because of the engagement you provided them through the Report.

The key to a well crafted Annual Report, is that it illustrates how your organization carried out its mission with the help of all its stakeholders. This document should not be boring. Use illustrations and stories to help the reader see the impact they have made by supporting your organization or better yet, inspire them to continue to support the organization because your Report demonstrated that you are good stewards of the resources you have.

Download our Annual Report Checklist to help you draft your Report. 

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