Getting Started with Annual Reports

What information should you include?


For Non-profit Annual Reports:

Kivi Leroux Miller (non-profit marketing writer trainer, coach and consultant) advises that a non-profit annual report should have the following “Five Essential Elements:”

  1. Accomplishments, Not Activities
  2. Real People Telling the Story
  3. The Financials
  4. Ample Thanks
  5. A Call to Action

Kivi suggests:

“the most important part of a nonprofit annual report is the description of your accomplishments. Your readers want to know what you did, but more importantly, they want to know why you did it. What were the results? Why did you spend your time and money the way you did? What difference did it make? Connect the everyday activities of your organization to your mission statement. Don’t assume that readers will automatically understand how your activities help you achieve your mission. Connect the dots for them.”

VSRA Best Practices in Charity Annual Reporting

You might also want to consider the Best Practices in Charity Annual Reporting, offered by the Voluntary Sector Reporting Awards (VSRAs) in Ontario – which we provided in a Wild Apricot blog post Getting Ready for Annual Reports. Here are the best practices the VSRA’s offered in relation to content:

  • State clearly the organization’s mission and relate the activities back to the mission throughout the report.
  • Give a clear statement of performance objectives and targets and describe how they link to the mission.
  • Disclose your organization’s risks, issues and challenges in the context of the mission.
  • Tell the reader how your organization governs itself and how that governance structure reflects the mission of the organization.
  • Avoid committee reports in favor of one broad-based board report that tells the organization’s story in a compelling and integrative manner. The committee reports can be posted to the website if they are considered important disclosures.

You can’t simply broadcast everything your organization has accomplished in a year. So consider gathering the committee or group that is tasked with the annual report development and identify a few key accomplishments, trends and or stories to focus on. What are your key messages?  Is there a theme that might be fitting? Don’t forget to relate the content back to your mission.

What about the financial reporting?

Again, the type and amount of financial reporting in an annual report will depend on the type of organization and your target audience.  Kivi Leroux Miller reminds us in 5 Questions About Nonprofit Annual Reports that many of those who read your annual report may not be familiar with a financial statement, so she suggests:  

The financial section of a nonprofit annual report should clearly explain where revenues come from and how they are spent. In addition to the information provided in traditional financial statements (abbreviated formats are fine in an annual report), it’s also helpful to include pie charts, bar graphs, or other visuals that help readers see the big picture and understand financial trends. A short narrative description is also essential. Explain in plain English the meaning behind all those numbers.

On the topic of financial reporting, the VSRA Best Practices suggest:

Have management discuss the financial information in light of the organization’s mission, vision and values; link that discussion to present operations, risks and future plans; all should be written in a concise “discussion and analysis” section of the report.

For Associations and Membership Organizations:

The key difference between a non-profit or charity annual report and one for an association or membership organization is that you need to it to be “member-centered” rather than ”donor-centered.” This means that rather than demonstrating how donations were spent, you need to outline the association or club’s accomplishments.  And while the term is a little over-used, you really should demonstrate “member value” in the annual report, as you would in any renewal materials. Members want to see the return-on-investment (ROI) of their membership dues or fees. 

I’d also suggest that you think about this in terms of telling your organization’s story – offering tangible examples of how the organization has benefited members throughout the year. Using real live examples or quotes from members can have just as much impact for associations as it does for fundraising organizations.  You want to show them the outcomes of key initiatives, projects or committees and demonstrate the value these have added to their personal or professional lives through their membership. 

Like a non-profit, membership groups will also want to thank and recognize volunteers, partners and sponsors. This doesn’t mean simply listing all committees and their members – instead describe their work and acknowledge the individuals whose achievements have benefited the membership.

What Not To Include:

The biggest challenge you might face in preparing your annual report is finding a balance between reporting your organization’s accomplishments and reader information overload or TMI (too much information/detail). This can be particularly difficult for small organizations that may not have too many opportunities to communicate throughout the year – e.g., through quarterly reports or newsletters. This may seem to be the one opportunity to tell your story, so it can be hard to edit down the contents list.

Here are some general tips on what to avoid in your annual report content:

  • Avoid using jargon and acronyms – while you don’t want to patronize readers, you also shouldn’t expect them to understand industry or sector jargon or figure out acronyms. If it is important enough to include in the report, take the time to use simple language rather than jargon and be sure to use full organization name the first time the organization is mentioned, with the acronym in brackets – but try not to use too many acronyms
  • “Jettison administrative minutiae” (Kivi Leroux Miller) – don’t broadcast everything your organization did last year. Instead focus on accomplishments that relate to your mission.
  • “Don’t over-emphasize fundraising accomplishments” (Kivi Leroux Miller) -  while you can include information on how fundraising efforts are going, you should focus on what you did with the funds rather than the actual fundraising

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Getting Started with Annual Reports by Wild Apricot is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Based on a work at www.wildapricot.com.

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