7 Nonprofit Annual Report Essentials for Next Year

An annual report is a vital part of your organization’s end-of-year checklist, but not every nonprofit knows how to make the most of this important document.

An annual report is a publication that a nonprofit distributes to display what the past year has brought for the nonprofit.

The report should do more than just remind your constituency of the coolest fundraisers your nonprofit pulled off this year; it’s a way to prove your accountability and trustworthiness to people who might be considering becoming a donor to your organization.

While each nonprofit’s report will be different, you can put your best foot forward by using our guide as a nonprofit annual report template: take our suggestions and make them your own!

We’ve outlined the 7 most essential nonprofit annual report requirements here:

1. Use the first page of your annual report to snag your readers.
2. Your nonprofit annual report should highlight your accomplishments, not your activities.
3. Keep the financial section of your nonprofit annual report short but sweet.
4. Thank your supporters in your annual report.
5. Spice up your annual report with personal stories and high-quality visuals.
6. Turn your annual report into a call to action for the upcoming year.
7. Consider what communication strategies work best for your constituency.

If you’re ready to produce the best annual report you can with our help, read on!

1. Use the first page of your annual report to snag your readers.

The first page of your report is your best chance to snag the reader’s attention. If your opening is emotionally dry or boring, the reader will likely skim over everything else and then toss the report back onto the kitchen counter.

Instead, use the first page of the report to grab their interest.

Here are a few suggestions for things to put on your first page:

• A heartfelt letter from a board member or the executive director.
• A snappy and visually engaging executive summary.
• Your mission and vision statements.

An emotionally open and heartfelt letter has a lot of appeal, especially if written by someone who has a deep connection to the organization and its cause.

An executive summary is also a tried-and-true way to open a report. This is a one page or shorter discussion of every other aspect of the report. Your summary should include a short breakdown of every section, and also display some graphs and pictures.

This shouldn’t be a one-page block of text: think instead of designing a simplified version of your annual report as a poster. What are the most important things to get across? How can you interest the reader in what else is in the report?

Third, consider including your mission and vision statements on the first page of your report. If someone doing research on nonprofits to donate to discovers your organization, odds are that they’re not going to know you off the top of their head.

2. Your nonprofit annual report should highlight your accomplishments, not your activities.

Displaying your organization’s achievements is one of the biggest nonprofit annual report requirements. Rather than listing off last year’s activities calendar, talk about how those activities led to quantifiable successes.

You have to connect the dots for your readers. If they’re engaged with your organization already, they know what you’ve been up to. Now, they want to know what their time and money did for the community.

Use the data your organization has tracked to create graphs and charts. Here are some examples of achievements to highlight:

“With the $X we raised in our fall peer-to-peer fundraiser, we purchased Y sleeping bags, Z water purifiers, and A pairs of shoes and sent them to B people.”

“After our spring campaign, we built Z houses for Y families, which will keep a total of Z people from being homeless.”

Use this space to highlight how your donors have made a difference. When you explain your accomplishments, thank donors and explain how they made them possible.

Including your achievements, instead of just your activities, is another way for you to build trust in your organization among people who are considering becoming donors. Thanking donors and explaining how they made those accomplishments possible signals to future donors that you value your supporters.

Through your annual report, they can see that the money that you raise is being used for things and creating tangible benefits for the cause that you’re working to serve.

3. Keep the financial section of your annual report short but sweet.

The financial section is another important facet of the nonprofit annual report requirements.

The most important thing to communicate in the financial section of your report is that your organization is honest and trustworthy with the money that it handles.

At the same time, you have to walk the line between too much information, which will bore or confuse your readers, and not enough information, which might make them think that something is missing.

Use plain, everyday English to explain where your money came from and what you used it for. This is the golden rule for your financial section. Assume that the people reading your report don’t have a degree in finance.

However, for those who are interested in the nitty-gritty details and want to know all the ins and outs of your organization’s finances, offer a fuller explanation or financial report either printed by request or online.

In addition to your easy-to-read-and-understand text, throw in some infographics or charts to make your information more easily accessible, as well as more attractive!

Consider some of these options:

• Use a line graph display how your fundraising campaigns have become more successful over the years.
• Use a pie chart to show the breakdown of your budget in different segments.
• Use a bar graph to compare the amount of money raised through different means (online, text giving, direct mail, over the phone, in-person events).

These charts are easy to understand and interpret, and will allow your constituents to appreciate your transparency as well as increase their confidence in your nonprofit’s ability to positively manage money in order to better the community.

4. Thank your supporters in your annual report.

No nonprofit annual report template would be complete without a section for thanking your donors.

All of your donors are probably aware how grateful your whole team is to them for helping your organization. But thanking them publicly in your annual report is another great way to express your gratitude and make them feel appreciated.

Don’t feel as though you have to keep your appreciation limited to this one section—it should be apparent throughout your entire report. But this is the section where you can individually name your donors and dedicate some page space to them.

There are a few different ways to build a thank-you section:

• Name everyone who donated to your organization
• Name everyone who volunteered for your cause.
• Name everyone who donated over a certain amount to your organization.
• Name donors and volunteers who contributed over a certain amount of money or hours.

Wouldn’t it be nice to publicly appreciate everyone who supports your organization, no matter how? If you’re a smaller nonprofit, you can do just that! However, this isn’t realistic for larger institutions.

Nonprofits with larger supporter bases can still add a personalized touch to their thank-you messages. Consider saying something like this:

We at Happy Tails are eternally grateful to everyone who has supported us in our fight to uplift animals, and we appreciate your efforts more than you know. Right now, we’d like to individually thank those who went above and beyond in supporting us:

• Sally Smith
• Jane Doe
• Mike Brown

Were there any businesses that donated event space, food, or anything else? Don’t forget to mention them, or any other businesses that may have helped you! Don’t forget to include companies from whom you received matching gifts.

If you have the space, this is a good place in your report to remind donors about matching gifts. Many companies will match their employees’ donations to nonprofit organizations, but the employee has to be aware of the program to take advantage of it! Check out Double the Donation’s top matching gifts companies list to see if any of your donors work for these companies and could help your organization secure those matching gifts.

One last reminder: make sure you double- and triple-check how to spell everyone’s name! If you’re not sure, ask the person individually. They’ll appreciate that you took the time to check, and you’ll avoid accidentally alienating a supporter!

5. Spice up your annual report with personal stories and high-quality visuals.

This tip is not about building a specific section of your report: rather, it’s about improving the report as a whole.

You want your report to be beautiful, engaging, and inspiring. And while your cause is inspiring enough on its own, visual excitement is a nonprofit annual report requirement.

How can you add this? Personal stories and good visuals! If you need some inspiration, go back to your organization’s social media. What pictures have you posted this year? What images capture the soul of your nonprofit?

Use high-quality images to bring a human interest aspect to your annual report. Try to focus on the people involved, rather than things or places.

So whose faces should you showcase in your report?

• Volunteers
• Participants at activities
• Event-goers
• The people or animals benefitted by your organization
• Your staff hard at work

These images will add visual interest to your report by breaking up chunks of text, and make the readers of the report more invested in the people involved on all sides.

Don’t limit these images to one dedicated section of the report- intersperse them throughout the entire publication in an intentional and considerate way. Use captions to add emotional weight to these images, as well as clarify what was going on.

For more personal touches, do quick interviews with some of the same people listed above. Highlight the experiences that they’ve had working or volunteering with your organization.  Include pictures of them to connect their lives with your nonprofit through more than just words.

For more visual excitement, use the best parts of these interviews as pull quotes. Use these as section boundaries, headers, or footers! Consider some bold colors or a striking font.

Making your report aesthetically pleasing is a surefire way to increase the likelihood of your readers staying engaged with your report through more than just the first page.

6. Turn your annual report into a call to action.

While your annual report is a place to celebrate the successes of your previous year, don’t forget that the next year is about to start, and that the work never stops.

Your report is a great way to remind your donors and volunteers that although you’ve made incredible progress together, there is still a lot of work to be done and your organization will require their help more than ever next year.

Discuss your plans and goals for the upcoming year, and offer ways for your constituents to get involved. Let them know about upcoming:

• Peer-to-peer fundraising campaigns.
• Volunteer events.
• Food or clothing drives.
• Or anything else that your organization has planned for the next year.

Any call to action needs to be inspiring and attention-grabbing. Your annual report, because of its wealth of information and beautiful images, is the perfect vehicle for an effective call to action.

There’s no better way to kickstart your annual fund campaign than reminding your community of  the service you do through a stellar annual report.