What to Include in Your Nonprofit Annual Report: Quick Guide
By Sarah Tedesco of DonorSearch
Building relationships with supporters is critical to your nonprofit’s fundraising success. Research shows that more than two-thirds of nonprofit donors believe it’s essential to trust the organizations they contribute to, and your nonprofit needs to center relationship-building to create this trust. Plus, donors who have strong connections to your organization are more likely to stay engaged in your work long-term.
You probably think of your nonprofit’s annual report primarily as an opportunity to look back at the past year’s achievements and look forward to what you want to accomplish in the coming year. However, this resource can also be an invaluable donor cultivation tool—as long as you include the right information to instill confidence in supporters and encourage action.
In this guide, we’ll review four content areas you should make sure to cover in your annual report. But first, let’s discuss an important consideration that dictates how much information you can include.
A Note on Annual Report Formatting
While it’s strongly recommended that your nonprofit create an annual report, it isn’t strictly required, unlike tax returns and other yearly registration forms. So, you have a lot of freedom when it comes to choosing a format for your annual report, although you’ll be able to put more information into some types of reports than others.
According to DonorSearch’s nonprofit annual report guide, the most common formats for this resource include:
Traditional bound books that can range from a few to 100 pages long.
PDFs, which offer the same amount of space that a book provides in a more eco-friendly and cost-effective way.
Postcards, if you want to maximize digestibility by only sharing the most essential information.
Brochures, which are a middle ground between a postcard and a book or PDF in terms of length and depth of content.
Videos to show, rather than tell, what your organization has accomplished over the last year.
Interactive websites that include multiple videos, infographics, photo galleries, and other multimedia content for an immersive experience.
It’s advisable to create at least one type of long-form report (book, PDF, or website) so that important stakeholders can get a full perspective on how the year went for your nonprofit. However, you can also provide the shorter options to newer supporters or other audiences they’d resonate with, along with instructions for how to access the full report (e.g., visiting the website at its URL, scanning a QR code to view the PDF, or contacting your organization about receiving the book in the mail).
Essential Nonprofit Annual Report Content
Once you’ve selected your annual report’s format, you’re ready to start brainstorming its contents! Use these categories as a jumping-off point for maximum effectiveness when considering the report as a cultivation tool.
1. Mission Information
Individuals at every stage of the donor lifecycle will read your annual report, including longtime supporters, first-time donors, and even those who have yet to contribute. Your audience will also include volunteers, event attendees, advocates, current and former staff and board members, existing and prospective sponsors and grantmakers, and many other community members—all of whom have different levels of knowledge about your purpose and initiatives.
Prominently feature your mission statement in your annual report to ensure all of these readers are on the same page about what your nonprofit does from the start. Vision statements and explanations of your current strategic plan are also helpful for understanding why your organization set the specific goals it worked toward this past year.
You might also start your report with a letter from a prominent individual at your nonprofit, such as your president, founder, or board chair. This strategy provides a personal perspective on your mission and work while reinforcing the report’s credibility from the beginning.
2. Notable Accomplishments
You should dedicate most of your annual report to showing your nonprofit’s impact over the past year and how your supporters contributed to it. To that end, most organizations create a dedicated section in their reports for displaying key statistics on program participation and outcomes, fundraising campaigns, volunteer involvement, and other data in this vein.
In longer-form reports, you can also cover your nonprofit’s most important achievements in depth. Here are a few ways you might organize this content, along with some real-world examples to spark inspiration:
By mission-related project or program. The Nature Conservancy uses this structure in the Conservation Highlights and Spotlights From the Field sections of its 2024 annual report website.
According to different facets of your strategic plan. In its 2022 annual report, the National FFA Organization introduced a new strategic plan that would run through the end of 2025 and focus on three pillars (Evolve, Engage, and Empower). They used these pillars to structure the impact information in their 2022 report and themed each subsequent report around one pillar.
Using a creative, organization-specific layout. The PDF version of NC State University’s 2024 Chancellor’s Report begins with a map of key buildings on campus that frame the impact stories and data in the rest of the report.
No matter how you structure your impact information, remember to be honest about how the year went. Along with highlighting accomplishments, acknowledge any missteps or shortcomings. Explain why you think they happened to promote transparency, and discuss how you plan to do better in the future—and how your supporters can help you make that possible.
3. Financial Information
Sharing financial data in your annual report is also essential for promoting transparency. Plus, you’ll need to handle many financial activities at the end of the year anyway (closing your books, preparing for tax season, finalizing next year’s operating budget, etc.), so creating this section of your annual report should be a natural extension of those tasks.
Use charts and graphs to clearly display the following financial information:
Total revenue generated from individual donations, corporate philanthropy, investment returns, grants, and earned income like memberships and service fees.
Total expenses incurred to cover program expenses and overhead.
Any major financial events that occurred—e.g., achieving a fundraising campaign goal, making a major purchase, or navigating a funding setback.
This information will be sufficient to satisfy many readers’ curiosity. However, some funders might be interested in learning more about your organization’s financial situation, which is why many nonprofits attach their annual financial statements as appendices to their report so they’re available to audience members who want to see them.
4. Supporter Recognition
Showing appreciation for your supporters in your annual report is another great way to build stronger relationships. After all, none of your mission-related impacts or financial success would have been possible without your community’s engagement and loyalty!
You have several opportunities to thank your nonprofit’s financial contributors in your annual report, including:
The customary list of major donors, which should also include sections for legacy donors and corporate sponsors.
Donor spotlight stories interspersed throughout your impact content.
A general statement of thanks to acknowledge that even though you couldn’t list every small-gift and mid-level donor in your report, their support was also integral to your success.
Don’t feel like you have to limit annual report recognition just to donors! Better Impact’s volunteer appreciation guide suggests spotlighting loyal volunteers in your report, and you can also highlight repeat event attendees, leaders in your advocacy efforts, and any other supporter who has significantly contributed to your success.
While the ideas above just cover some of the content you might include in your nonprofit’s annual report, they’re a good starting point for considering the report’s structure and format. Make sure to keep your internal databases updated throughout the year so that when the time comes to create your annual report, you have all of the information you need ready to go.
This guest post was written by Sarah Tedesco.
Sarah Tedesco is the Chief Operating Officer and Part Owner of DonorSearch, a prospect research company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department, which focuses on client contract fulfillment, retention, and satisfaction. She also collaborates with other team members in various areas like sales, marketing, and product development. Sarah holds an MBA from the University of Maryland and worked as a foundation prospect researcher before joining DonorSearch, providing her with industry experience that she applies to her responsibilities day-to-day.
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