Are Annual Reports Important for Your Nonprofit?
I was sitting at my desk this week when a co-worker gave me our 2016 annual report for The Salvation Army in Central Indiana. It reminded me of getting a new car. It was shiny and made me feel good. I felt like the report validated another year just passed that was filled with positive activity and community impact. I believe an annual report is like a report card in the sense it documents high-level accomplishments during the past year. I have been in this job for more than 4 years, so I pulled out annual reports from 2012 to 2016 to compare and contrast those annual reports. These annual reports made me wonder if we are hitting the mark with respect to information that should be shared with various constituencies.
According to the National Council of Nonprofits, “annual reports can be used to highlight a nonprofit’s mission and impact, thank volunteers and supporters and make a case for donating to the organization.” There are two questions you should be ask as you build your annual report: Who is your audience and what do you need to accomplish? Annual reports are usually targeted towards individual donors, foundations and other audiences, so you should think about the best ways of reaching them. The contents of the annual report should be visually compelling and underscore your organization’s commitment to transparency. One goal for the annual report is to build trust with your audience.
The Network for Good’s Nonprofit Marketing Blog article titled “Top Five Questions About Nonprofit Annual Reports” states “a well-written annual report will help you demonstrate your accomplishments to current and future donors, cultivate new partnerships and recognize important people.”
According to the organization, here are the five most asked questions from nonprofit managers working on annual reports:
- Do we really need an annual report?
- What’s the most important part of an annual report?
- What needs to go in the financial section?
- How do we handle the donor lists?
- What should an annual report look like?
You can find links to more than 100 nonprofit annual reports here. See how other organizations in your field or geographic area are designing their reports.
In Kivi Leroux Miller’s Nonprofit Communication’s Blog, she said all nonprofit annual reports, regardless of size, length or format, should include these five essential elements:
- Real people telling the story
- Ample thanks
- A call-to-action
So it is time to see if my organization’s 2016 annual report met the standards put forth from the authors mentioned in this blog post. Our annual report included a message from the divisional commander, mission statement, compelling stories gleaned from our fundraising priorities, statement of high-level programs and services, graphic financials, statistical impact of numbers of individuals served, advisory board, organizational leadership, locations of key services in community and ample thanks. What is not completely included in the annual report is a call-to-action. We take these annual reports to various prospects and provide additional call-to-action materials on these visits.
Are annual reports important to your nonprofit? I would say definitely so. It provides the past, present and hints of the future for your organization in a very succinct way. Make sure you understand the purpose of the annual report and how you intend to utilize the annual report before launching this program. Our annual report makes me proud to be a part of this organization. Does your annual report provide the same enthusiasm to you? If you do not have an annual report, I suggest investing in that communication tool today. If you make an imprint in the community, let others know it.
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy.