How to Create a Nonprofit Annual Report€¦ · How to Create a Nonprofit Annual Report - 5 -...

How to Create a Nonprofit Annual Report Impress your supporters and they’ll give you the world.

KIVI LEROUX MILLER

How to Create a Nonprofit Annual Report - 2 - Nonprofit Marketing Guide.com

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Table of Contents

Nonprofit Annual Report Basics ........................................................................ 4 Why Your Nonprofit Needs an Annual Report ...................................................... 4 What Donors are Really Looking For ................................................................ 4 The Differences Between Corporate and Nonprofit Annual Reports ........................... 6 Writing a Report That Will Get Read ............................................................... 6 Traditional Annual Reports v. New & Improved Approaches ..................................... 7 Two Decisions to Make Before You Start ........................................................... 8

The Five Essential Elements ........................................................................... 9 1. Accomplishments, Not Activities ................................................................. 9 2. Real People Telling the Story .................................................................... 11 3. The Financials .................................................................................... 12 4. Ample Thanks ...................................................................................... 18 5. A Call to Action .................................................................................... 18 What to Leave Out ................................................................................... 19

New and Improved Annual Report Formats ......................................................... 20 Online Annual Reports .............................................................................. 20 Two-Page and Four-Page Print Annual Reports .................................................. 20 Video ................................................................................................... 31 Oversized Postcard ................................................................................... 33 Infographics ........................................................................................... 35 Annual Report Mini-Site ............................................................................. 36

Producing a Traditional Annual Report ............................................................... 38 Common Sections of a Traditional Annual Report .............................................. 38 The Process of Creating a Traditional Annual Report ........................................... 39 Developing a Theme for Your Report .............................................................. 40 Use Your Theme to Help You Tell Your Story ...................................................... 45 Pulling Together Your Lists .......................................................................... 45 Back To the Beginning: Writing Your Executive Message........................................ 46 Executive Message Recipes ......................................................................... 47 Designing and Printing Your Annual Report ....................................................... 54

Frequently Asked Questions ........................................................................... 56 What To Do After You’ve Published Your Report .................................................... 61

Measuring Its Effectiveness ......................................................................... 61 Preparing for Next Year ............................................................................. 61

A Quick Review of What Not to Do: 10 Annual Report Mistakes Nonprofits Make ......................................................... 63 Additional Examples and Resources .................................................................. 63


Nonprofit Annual Report Basics

WHY YOUR NONPROFIT NEEDS AN ANNUAL REPORT

Even though nonprofit organizations aren’t required to produce annual reports like

publicly traded companies are required to do, most nonprofit managers recognize the value

of producing one. Annual reports can help you demonstrate your accomplishments to

current and future donors, cultivate new partnerships, and recognize important people.

Major funders and other supporters will often expect you to produce an annual report, and

some charity watchdog groups require annual reports in order for you to receive a positive

rating.

Whether it’s required or not, producing an annual report can help you in many ways.

Annual reports can

• communicate not only your activities, but also your accomplishments during the past

year;

• help you raise money by attracting new donors and convincing existing supporters

that their funds are being well spent;

• educate community leaders and influential decisionmakers about your work on

important issues;

• recognize special people, including donors and volunteers; and

• serve as a historical record of your progress.

Even with all of these benefits, many people still ask, “But do we really need an

annual report?”

The answer I always give is “You need something.”

WHAT DONORS ARE REALLY LOOKING FOR

Most donors say they want two simple things before they'll give again: to be thanked

for the first gift and to see the results of that gift. Your annual report should accomplish

both things. (You should be thanking and reporting results to donors throughout the year,

not just in an annual report). They want to know that you are bringing about the kinds of

changes they are expecting when they donate their time or money to you. This does not

mean, however, that they are looking for the laundry list of everything that you did over

the course of the year. Nor do they want to spend hours reading a report. They want the

highlights.

But producing highlights can be tough for many nonprofits, because staff often suffer

from the “curse of knowledge.” You know too much about what you do, and the ins-and-

outs of every program, and it affects your ability to talk about it simply and intelligently

with people who don’t live it 40+ hours a week like you do.


As a result, nonprofits often talk about all the beautiful work they do in a way that's

really too abstract – and too messy – for most donors to really understand. Annual reports

can overwhelm them with information, and often don't provide enough clarity in the

message, leaving donors confused about what it all means.

The impact should be clear, without your donors needing to spend serious brain

power to interpret what they see. Your annual report should clearly let us see your hand

prints and footprints on the positive changes you've brought about in the world. We want to

be able to see the impact that you’re making in the community, and we want to see the

impact that we, as your supporters and donors, are making too.

Annual reports often give donors this . . .

. . . but what they want is this.


THE DIFFERENCES BETWEEN CORPORATE AND NONPROFIT ANNUAL REPORTS

Part of the problem for nonprofits who are trying to meet the needs of donors comes

from thinking of them as investors. While this is a useful metaphor in many ways, it's

terrible if that leads you to think you should copy a corporate annual report as your model.

Public corporations are required by federal law to publish an annual report every year. The

regulations about these reports are very specific about what must be included. These

reports emphasize financial performance, particularly short-term performance.

In contrast, nonprofits are not required by federal law (yet) to produce annual

reports, so there is wide variation in what is included. Good nonprofit annual reports

include a strong financial section, but unlike corporate reports, they should also emphasize

what you accomplished toward your mission. While focusing on short-term achievements is

important, these must be put in the context of the long-term public mission of the

organization.

WRITING A REPORT THAT WILL GET READ

No matter what format your annual report takes, I believe these three principles

should guide its creation.

Keep It Short

While I know some people will argue with me (especially those in the printing

business), I really don’t think the majority of your donors want to read a 20-page annual

report. I’m not sure how many even want to read a four-page report. Think really

creatively about how you can condense your annual report into something that will

actually get looked at. Think videos, or over-sized postcards, or a two-pager, or a nice

interactive page on your website, all of which are described in this e-book.

If you decide for whatever reason that you need to produce a more traditional (i.e.,

longer, printed report), you'll find an entire section of this e-book devoted to those too.

Make It Personal

Try hard — very, very hard — to stay away from the objective (read: boring)

programmatic descriptions and reporting that are so often found in grant and board reports,

for example. Make your annual report to your individual supporters a much more human

affair. Describe your outcomes, but in language you’d use in a dining room, not a board

room. Your donors should feel like the report was written for them and about what they

care about.


Be Timely

You are supposed to talk about the past, not the future, in an annual report. This

report isn’t a preview of things to come. At the same time, you can do what’s called

“advancing the story.” That means talking about the organization’s work over the past

year in a way that illuminates what will happen in the coming year. Give us some new

information or a new perspective that will inform the way we look at your work next year,

while still focusing on the more recent results.

TRADITIONAL ANNUAL REPORTS V. NEW & IMPROVED APPROACHES

Let's take a quick look at what I see as the evolution of annual reports over the last

15 years or so. While I believe strongly that you should be working toward what I have

labeled as the “New & Improved” approach, this e-book does include a great deal of

guidance if you decide to go the more traditional route.

TWO DECISIONS TO MAKE BEFORE YOU START

Before you begin working on your annual report, regardless of the format you choose,

you should answer these two “big picture” questions.

How Will You Use Your Annual Report?

One of the first decisions you need to make about your annual report is who you are

writing it for. This also helps answer the question about why you should do one. Knowing


your primary audience will also help guide your decisions about its content and distribution.

What do you want your annual report to do for you? If you want it to help you raise

money, as most nonprofits do, then potential funders (organizations that give money) and

donors (individuals who give money) are your audiences. Other people like community

leaders and elected officials who might control grants and contracts or in-kind donations to

your organization (e.g., use of buildings) should be part of your target audience too.

You should also give your report to your board members, partners, and anyone else

you are trying to work with or impress in any way. You can also share it with volunteers. If

you are a membership organization, you should definitely send the annual report to your

members (or at least send them a note telling them how to view it on your website).

What Is Your “Take Home” Message?

As with any communications piece, your annual report should leave your readers with

a specific impression or message about your organization’s work over the preceding year.

They need a “take home” message — in other words, what will they remember about your

report after they’ve gone home for the day? You can also think of it as the “elevator”

message. If you had 30 seconds in an elevator to explain to a potential donor what you

accomplished last year, what would you say?

One way to create a take-home message is to write a sentence that says, “This is

different because we did that.” Below are some examples:

• Our community is more attractive to new employers because our citizens are better trained as a result of our programs.

• There are fewer stray cats and dogs roaming our neighborhoods because of our successful spay/neuter and pet adoption programs.

• Our legislators are responding to our concerns because of the citizen lobbyists we have mentored.

This take-home message, along with your specific accomplishments, is the guiding

force behind your annual report.


The Five Essential Elements

All annual reports, regardless of format, should include these five essential elements.

1. ACCOMPLISHMENTS, NOT ACTIVITIES

Readers want to know what you did, but more importantly, how you did it. What

were the results? Why did you spend your time and money the way you did? What

differences 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.

Nonprofits often assume that an annual report is a description of activities. That’s

not quite right. An annual report should be a summary of what you accomplished by doing

those activities. You need to explain the meaning behind the work you do every day and the

difference you are making by implementing your mission and goals.

It’s the difference between saying you went to five meetings and explaining how

something changed because you went to those five meetings. Don’t just say you released a

study on a topic; explain how the study opened the eyes of a certain group of people and

how their behaviors changed as a result.

Many nonprofits have broad missions that will never be accomplished, such as ending

world hunger or stopping domestic violence. Just because you don’t accomplish your overall

mission doesn’t mean you haven’t accomplished many little steps as you work toward it.

How have you made the world a better place in the last year? What is different now

because your organization existed and completed the work it did? Focus on these

accomplishments in your annual report.

Because you are focusing on accomplishments and not activities, you should leave

out discussions about the administrative and internal workings of your organization. You

should also skip over programs without significant progress to report and those that are

winding down.

It’s also important to think about your accomplishments both quantitatively (in

numbers) and qualitatively (in words). Grantmakers love numbers: how many people you

helped, how much money you saved, etc. But they also love the stories behind the numbers.

Come up with some good quantitative measurements and back them up with good stories

about the people, places, or things behind those numbers. Your individual donors will also

appreciate good stories.


Read the National Association of Paper Pushers (NAPP) mission statement on the next

page to see how they have converted their activities into results and then to larger

organization accomplishments. (The NAPP is a fictitious organization used to illustrate

points throughout this book.)

Example: How to Define Your Accomplishments

The National Association of Paper Pushers (NAPP) is a 5,000-member organization of

senior administrative professionals. We provide educational services to our members and

the general public and also advocate for state and federal policies that benefit paper

pushers around the nation. We seek to increase the professionalism and skills of our

members while increasing the level of respect that the general public has for our profession.

Last Year’s Activities

What The Activity Did Or

Resulted In What We Accomplished As An Organization

Held a fundraiser

dinner and silent

auction

Raised the visibility of the paper

pushing profession with 20 major

corporations

Diversified our revenue base

Will help result in better pay for our

members

Increased the financial stability of our

organization

Held an awards banquet Recognized the best in our

profession

Encouraged our members to strive for

excellence

Attended lots of

meetings with

regulatory agencies

Educated regulators about the

impact of proposed rule makings

on paper pushers nationwide

Better regulations that make sense for our

members

Started work on a

certificate program for

our members

Established high standards for

profession

Helped members achieve higher

levels of knowledge and hone

skills

Increased professionalism and esteem for

members

Helped members perform their jobs better

Developed a curriculum

for high school students

Opened the eyes of young

people about the rewards of

paper pushing

Helped our profession continue to grow and

benefit from new members

Launched a new

website

Expanded access to our vast

educational resources for the

general public

Raised the visibility of our profession


Doesn’t it sound more impressive to say that you raised the visibility of your

profession among the general public instead of saying you launched a website? Or that you

increased the financial stability of your organization instead of just saying you held a

fundraiser?

The point of this exercise is not to spin your way into half-truths, but to better

explain to donors, funders and other supporters the value of the work you do. It is

analogous to the difference between features and benefits that product marketers use all

the time in advertising. For example, a seat belt is a feature on a car, but the safety you

get from that seat belt is the benefit. A shiny coat of red paint is a feature, but the self-

esteem boost you get from being seen in the hot red car is the benefit. You need to

translate your own activities (features) into accomplishments (benefits).

2. REAL PEOPLE TELLING THE STORY

Supporters want to hear powerful stories about the impact of your work that feature

real people, so include people pictures, profiles, testimonials, and little anecdotes that let

those voices shine through. Get away from the institutional voice of the 501(c)(3) doing the

talking, and make your report a more personal communications piece.

Including personal profiles as sidebars or anecdotes in your annual report, or in a

video online, is a great way to tell an important story about your organization, while also

recognizing the contributions or successes of specific people. Asking others who have been

touched by your organization to share their experiences is a proven way to share your

accomplishments without sounding like you are bragging. Let them say how great you are.

Use a “creative nonfiction” style of writing – storytelling where everything is true. Describe

the scene and use vivid language to bring your reader into the story and help them visualize

what’s happened.

Tips For Writing Better Personal Profiles

1. Ask open-ended questions. Whether you interview the person over e-mail, over the

phone, or in person, ask lots of open-ended questions that are impossible to answer in one

or two words. You want to generate answers that you can work with and build a story

around.

2. Ask enough questions to generate more material than you need. For a 250-word

profile, I’ll ask 5-6 questions, and if the person is replying over e-mail, I’ll ask them to

shoot for 50-100 words per answer. That will usually give me enough background, facts, and

quotes to pull together a good first draft, after adding in the organizational info.


3. Don’t use everything you get. Don’t use everything a profile subject says or writes,

because half of it ends up being irrelevant to the particular story angle. Use the details and

quotes that support the story you are telling.

4. Keep the biographical stats to a minimum. A profile isn’t a biography. Include enough

personal details so your readers can get a general sense of who this person is, but don’t let

it drag out. The profile needs to support your organizational accomplishments and shouldn’t

be a life story about the person. It should be obvious if the subject is a man or woman (if

the name doesn’t give it away), with some clues about the person’s age and other

demographics. Absolute clarity about his or her connection to the organization (volunteer,

donor, client, etc.) should also be included.

5. Include several quotes. Let the profile subject talk about how great your organization is

and the wonderful work you are doing in his or her own words. They’ll mean a lot more

coming from the person than if you said them yourself. I always ask donors, for example,

“Why did you first get involved with the Nonprofit?” and “Why do you continue to support

the work they are doing now?” Both questions usually produce a great quote to include in

an annual report profile.

3. THE FINANCIALS

The financial section of your annual report needs to tell the story too.

Because nonprofit organizations are not legally required to produce an annual report

(other than submitting a Form 990 to the IRS), there are no requirements about how

financial information should be presented in them. Some nonprofits choose to print their

full financial statements in their annual reports, while others print only a few simple pie

charts.

In traditional annual reports, nonprofits often print their full financial statements, as

audited by a certified public accountant. Some even print the auditor’s letter that

accompanies the audited financial statements. Printing your complete financial statements

has some advantages. It provides readers with a broader picture of your financial status

than a summary chart or graph would. If there have been questions about your lack of

public disclosure in the past, printing your full financials could help address those concerns.

But printing full financials also has drawbacks. Readers who are unfamiliar with

financial statements will skip right over those big tables full of numbers. Even people who

know how to read them may not take the time to examine the financials to draw out the

meaning behind the numbers. Financial statements can be easily misinterpreted, especially

if you have large one-time income and expense items that skew your bottom line. Finally,

full financials take up lots of space, and because annual reports can be expensive to design,

print, and mail, every page counts.


Unless you feel very strongly that your organization would benefit from printing your

full financials, leave them out of your annual report. Instead, use one or more of the five

ways to share financial information described below, and include a note on the financial

page that your full financials are available upon request by contacting your office or going

online.

Even if you decide to print the full financials, you should still consider using one of

the techniques below to help all of your readers better understand the meaning behind the

numbers.

Five Easy Ways to Share Financial Information

Each of the five methods described below can be used alone or in any combination

that you think works best for your organization. In all cases, you can include not only data

from last year, but comparisons to previous years as well.

1. Abbreviated Financial Statements

Rather than printing all of the line items on your statement of financial position and

statement of activities, group some of the line items together and rename them with more

descriptive categories. This method gives your readers the highlights, but still presents the

data in a traditional accounting format.

Summarized Statement of Activities

(Fiscal Year January 1-December 31, 2010)

Revenue

Grants $200,000

Special Events $75,300

Membership Dues $58,500

Publication Sales $9,125

Other Revenue $17,450

Total: $360,375

Expenses

Public Education Programs $115,525

Member Education Programs $134,900

Special Events $32,400

Fundraising $8,000

Membership Development $12,500

General Management $52,700

Total: $356,025

Change in Net Assets $4,350

Summarized Statement of Financial Position

(December 31, 2010)

Assets

Cash and Equivalents $15,500

Receivables $5,000

Other Assets $8,700

Total: $29,200

Liabilities

Accounts Payable $12,350

Other Payables $2,000

Total: $14,350

Net Assets

Unrestricted Net Assets $8,150

Temporarily Restricted Net Assets $6,700

Total: $14,850

Total Liabilities and Net Assets $29,200


2. Income and Expense Pie Charts

You can skip the tables of numbers altogether and share information through pie

charts instead. As with the abbreviated financial statements, you should combine line items

into larger categories that will make sense to your readers. Try to limit the number of pie

slices to five. Too many slices will make your charts difficult to read.

Pie charts are a good way to express financial data because readers can quickly see

which categories of income and expenses are the largest and the smallest without having to

compare the numbers directly. Income and expense pie charts are also a good way to mask

overall declines in income or other negative trends.

You can label your pie charts in one of three ways: with the actual dollar figures,

with the percentages (which should add up to 100%), or with both.

Your pie chart need

not look like a pie. Other

shapes can work just as well,

as long as the slices are

proportionally accurate.

Work with your graphic

designer to come up with

some interesting ways to

express the numbers.


3. Income and Expenses over Time

People love trends, so consider showing how your income and expenses have changed

over time. You can use line or bar charts to convey this information. This is a good way to

disclose financial trends without sharing detailed information about income and expense

line items. Ups and downs become very clear, however, so think carefully about the

message your charts will convey.

In the examples, the line charts show a significant recovery with revenue and

expenses tracking together down and then up. The bar chart shows the same thing, but

more clearly shows that the last two years were profitable, because the income and

expenses for each year are side by side.


4. Financial Goals

If you were seeking contributions to a capital campaign or were working on achieving

specific financial goals last year, you can report on how well your actual figures met those

goals. This is another good way to share financial information without revealing the details.


5. Narrative Explanation

No matter what charts, graphs, or tables you decide to provide, I always recommend

that you include a brief narrative description of your financial situation as well. Don’t leave

the numbers in your report open to all kinds of interpretations. Your financials will tell a

story and you need to make sure that story lines up with the one you are telling in the rest

of the report. Help your readers see the connections between the numbers and your

accomplishments by including a couple of paragraphs of text in the financial section that,

in plain English, explain the meaning behind the numbers and put the numbers in context.

Narratives are also essential for explaining any bad news or extraordinary items.

Explaining Extraordinary Items

It’s not uncommon for nonprofits to have what are called “extraordinary” items

noted in their financial statements. These are usually one-time events that can skew your

bottom line up or down. On the income side, you may have received a very large multi-year

grant all in one payment from a funder. This will make your total income for the year and

the funds available in your bank account look much larger than they actually are. On the

expense side, a fire in your office building will greatly increase your expenses as you

replace the items destroyed and may create a deficit when you would have otherwise

finished the year in the black.

It is important to adequately explain these items to your readers so they understand

their impact on your financial status. Depending on the situation, it may even be useful to

share your financials with and without the extraordinary item.

Using Charts and Graphs in the Financial Section

When designing charts, graphs, and other visual aids, always keep in mind that their

purpose is to help readers understand your data quickly and easily. That means keeping

your charts and graphs simple. Try to limit the number of data elements (e.g., pie slices) to

five. Use easy-to-read fonts that are the same size or only slightly smaller than the body

text of your annual report.

Ensuring the Final Document Is Accurate

The many steps in producing an annual report provide several opportunities for

creating errors in financial information. If you combine and rename categories in your

financial statements, be sure to keep a record of what you did and double check that your

totals match the totals on your original financial statements. Be sure all percentages add

up to 100.

It also is easy for graphic designers to misplace numbers within large charts. Once

the financial information has been designed, both the person responsible for editing the

report and your financial manager should review the pages to ensure that they accurately

represent your organization’s financial position.


Making Your Full Financials Available

If you don’t print your full financial statements in your annual report, be sure to tell

readers how they can get a copy. Here is a sample statement: The complete audited

financial statements for the National Association of Paper Pushers can be obtained by

visiting www.paperpushers.org or sending a request to 23 Main Street, Anytown, CA, 95555,

by calling (800) 555-1234.

4. AMPLE THANKS

Give your community of supporters the sense that you are embracing them as

partners in bringing about all of the year's accomplishments. In traditional reports,

nonprofits often list all of the names of donors, but in shorter formats, that's just not

possible. Instead, use the stories you tell, the profiles and photos you include, and your

overall tone to convey how important their support is to your success. This attitude of

gratitude should permeate the entire report.

5. A CALL TO ACTION

So you’ve done a fabulous job telling readers about your accomplishments and

financials and inspiring them to get involved in helping you do more. What next? Tell your

readers exactly how they can help you. Include a small box or a full page at the end of the

report (or a link or form online) with a call to action or request for help. Let readers know

the different ways they can support your organization.

You may want to list the types of donations you can accept. For example, can you

accept gifts of stock? Do you offer charitable gift annuities or other planned giving tools? Do

you acknowledge memorial gifts with a card to the family as well as the donor? This is also

a good place to mention workplace giving opportunities such as your membership in

federated campaigns like United Way and EarthShare. You can also mention other non-

monetary ways people can support you, such a volunteer opportunities.


WHAT TO LEAVE OUT

Here's what you should leave out of your annual report:

• The full back story. Annual reports frequently include much more background detail

than supporters really need.

• Administrative inner workings. Getting a new intranet was probably a big deal to

staff, but it most likely isn't interesting to donors.

• Personal staff/board news. While it might be newsletter-worthy, it's rarely annual

report-worthy.

• News that excites only you and your staff. You may get really excited about the

behind-the-scenes intricacies, but unless your donors will also find that level of

detail compelling, leave it out.

• Work that went nowhere, including failed fundraising efforts. Focus on successes,

even if you spent a lot of time on failed efforts. If you must include them, focus on

the silver lining or lessons learned.

• Future activities. While it's fine to hint at the future, the overwhelming majority of

the report should focus on recent results.


New and Improved Annual Report Formats

Your donors are busy people, just like you, and most of them, I believe, are unlikely

to sit down and read a long, traditional annual report these days. That's just not how the

majority of people prefer to get their information any longer.

Instead, I recommend that you try one of the five “new and improved” formats

described here.

For examples of these formats, as well as additional resources to help you produce

them, please visit nonprofitannualreports.wikispaces.com. You can also add your own

annual reports or links to those that you admire to the wiki.

ONLINE ANNUAL REPORTS

This is probably the easiest format to transition to for those of you who have been

doing traditional annual reports. You forgo mailing printed copies, and instead produce a

PDF or a PowerPoint presentation. You then use any of several different “e-reader” or

“online magazine” viewers to provide a more interactive experience. Instead of viewing the

PDF in Adobe Reader, the document is viewed in a way where they pages appear to be

flipping over like a magazine and readers can move around more easily. To see several

examples, please visit nonprofitannualreports.wikispaces.com.

This online annual report for Family Service Association was created using Issuu.

http://nonprofitannualreports.wikispaces.com/

http://www.fsabc.org/about/financials/


TWO-PAGE AND FOUR-PAGE PRINT ANNUAL REPORTS

If you do want to continue mailing copies of your annual report to your supporters,

see if you can condense the report down to four pages, or even two pages. This forces you

to focus on what are truly the highlights from the year. This length is also about the right

amount of information for that more “personal” feeling you are shooting for.

You'll find two sample layouts for four-page annual reports on the next several pages.

The first one is a self-mailer and the second isn't. There's nothing magical about these

layouts, so customize them for what works best for your organization. They are meant

simply to give you a head start.

Most professional writers will tell you that writing really good short articles and

profiles is harder than writing long ones, and the same can be true for short annual reports.

When you try to condense everything from an annual report that might typically run 12 or

20 pages into just 4 pages of space, it’s a challenge.

At the same time, we are all busy. We all have too much to read as it is. I’m willing

to bet that more of your donors will read and remember what you have to say when it

comes in a four-page report than when you send them a forty-page tome. It’s worth your

effort to boil your report down to the essentials.

Here are five tips for creating a four-page or two-page annual report:

1. Focus on three accomplishments. As painful as it may be to cast off all the little wins

here and there, focus on the big or most meaningful results. Yes, this means you will leave

the work of someone on your staff out. And yes, it means you will leave a board member’s

pet project out. But your donors will be much more likely to remember those three

accomplishments when they tell their friends about you later. Recognize the other projects

in other ways, such as on your website or in your newsletter.

2. Create some cool charts. Instead of printing your financial statements, use some really

good pie charts or graphs to tell your financial story visually. Include two or three short

sentences about where you get your money and how you spend it, in plain English. Include a

short note about how supporters can download your full financials on your website.

3. Use a handful of great images. Rather than shrink a dozen photos down in order to

make them all fit, pick the three or four you think really say the most about your work.

Write really good captions for them that can stand on their own (remember, lots of people

will read your headlines and captions only, then put the report down).

4. Share a few quick stories. You don’t have space for full profiles, but you can quickly

share some anecdotes about some of the people you helped and worked with last year,

related to those three accomplishments you are highlighting. Stories are great ways to give

examples of more esoteric accomplishments and to help put lots of statistics into

perspective. Or if you have one really amazing story that says it all, use the space to tell

that single story well.


5. Trim back your donor lists. In a short report, you simply don’t have space to list

hundreds of donors. One solution is to set a minimum donation level and only print names

of people who gave more than that amount. Another approach would be to list only the

donors who specifically funded the work you are highlighting in your three accomplishments.

Or, you can leave the name by name list off entirely and include a more general statement

of thanks to all of your supporters.

If creating a four-page report was easier than you thought, go even further, and cut

it down to two pages!

You’ll find several examples of two- and four-page reports on the wiki at

nonprofitannualreports.wikispaces.com.

http://nonprofitannualreports.wikispaces.com/


LAYOUT #1, Page 1


LAYOUT #1, Page 2


LAYOUT #1, Page 3


LAYOUT #1, Page 4


LAYOUT #2, Page 1


LAYOUT #2, Page 2


LAYOUT #2, Page 3


LAYOUT #2, Page 4


VIDEO

Video is an excellent tool for communicating your annual accomplishments. We are

creating playlists each year of nonprofit video annual reports on our YouTube channel at

youtube.com/kivilm.

See 2012 Nonprofit Video Annual Reports

See 2013 Nonprofit Video Annual Reports

Also visit the video section of our annual reports wiki site for some examples, since

not everyone uses YouTube.

One popular approach to annual report videos is to release them near the end of the

calendar year, and to incorporate them into your year-end fundraising campaigns. These

videos often highlight 10-12 accomplishments or victories in rapid succession (just 5-10

seconds per highlight), in just two-three minutes total.

I interviewed Timothy Carey, Senior Vice President for Digital Media, with ICR, Inc.,

which has pioneered the video annual report format for publicly-traded corporations. ICR

has produced video annual reports for companies like McCormick & Schmick’s and Kenneth

Cole Productions.

While I have cautioned you against using the corporate model for nonprofit annual

reports, Tim's advice on video translates well to the nonprofit sector.

Kivi: Explain why video works better than print for annual reports.

Tim: Video is a more compelling way to tell a story, because it connects more emotionally.

We all get so much in the mail now, so the value of print is diminished. Since we are

overloaded with it, statistics show that people are more willing to watch a short video than

to read a long document. We’ve tracked it and we know that 4-5 minutes of video is the

sweet spot. That’s where we see people dropping off in longer videos.

http://youtube.com/kivilm

http://www.youtube.com/watch?v=VwDLLxDc4gM&list=PLPJOGTVucBumG2vydXdqZnzghlaVVphT6

http://www.youtube.com/watch?v=ljaJSRhSI1o&list=PLPJOGTVucBulw_fML8reokzhsFydWWajr

http://nonprofitannualreports.wikispaces.com/Video+Annual+Report


Kivi: The nonprofit bottom line is about much more than financial success. What should

nonprofits focus on in their video annual reports?

Tim: Nonprofits should really hone in on what they are trying to accomplish, what they are

trying to do, what makes them special. The message will be different for each nonprofit.

You can’t take a cookie-cutter approach. Nonprofits are all chasing fewer dollars, so the

emotional connection that you can make with video can really help. You can also weave in

simple graphical treatments of how nonprofits are spending their money, weaving in the

financial reporting that you find in all annual reports.

Kivi: Let’s talk about production – how do you go about creating a video annual report?

Tim: We shoot all the videos we do documentary style — the pace is pretty quick, but it still

allows viewers to connect. It’s an effective style that really works right now. We typically

don’t do formal interviews with people on a blue screen. Instead we shoot a conversation

that might take six minutes and then we edit it down to one minute that we actually use.

While it’s documentary style, we don’t shove the microphone in people’s faces. It’s a more

relaxed, natural conversation. Many companies do have existing video, and we sort through

what’s usable and what’s not. That helps us determine what and where we need to shoot.

We try to shoot all in one day.

Kivi: Who should be in the video?

Tim: You have to leverage the emotional connection. If a nonprofit is helping people, then

show on video how those people were helped. You can do vignettes or interviews. Ask

employees why they work there to get at some of those emotional connections. In some

organizations, the president or CEO [or executive director] may not be the best person on

film, especially if they are not particularly comfortable being interviewed or filmed. It’s

often better to have someone else tell the story. Or if you do need to use that person, film

in documentary style where you ask the person to talk about the past year. You film longer

than you’ll need to get the person talking and then weave the good parts into your story

later. You can prep people with questions ahead of time and in some cases, we may

rehearse. You only need a couple of great highlights out of several minutes of filming.

Kivi: What other words of wisdom do you have for nonprofits considering video annual

reports?

Tim: Beware of too many chefs in the kitchen. The video will be too long, and not as

focused as it needs to be. Individuals will be more connected to their specific projects and

will lose the bigger picture. You’ll end up with too many minutes on less critical elements.

That’s the piece we provide – we help clients be decisive about the storyline, the draft of

who should say what, and managing the production process. When you are too close to it,

you can’t see the big picture sometimes.


OVERSIZED POSTCARD

Think of those oversized postcards that we often see during political campaigns.

They are such a popular format in those races because they stand out in the mailbox,

include enough room for nice big photos, and still leave plenty of space for a compelling

message. And they are less expensive to print and mail than other forms of direct marketing.

They can work for an annual report for the same reason!

Pick your two or three best photos of the year, add some bulleted highlights, throw

on some testimonials, and send them to your website for more details. Splashing “Thank

You!” across it wouldn't hurt either. Even if they only read the postcard and don't visit the

website, they will still get a sense of your accomplishments.

We are collecting examples of postcards on the wiki and also on our Nonprofit Annual

Report Postcards Board on Pinterest.

http://nonprofitannualreports.wikispaces.com/Postcard+Annual+Report

http://www.pinterest.com/npmktgd/nonprofit-annual-report-postcards/

http://www.pinterest.com/npmktgd/nonprofit-annual-report-postcards/


Postcard from Austin Groups for the Elderly


INFOGRAPHIC

Infographics allow you to take chunks of data and display it in a way that is visually

appealing and easy to read. This makes infographics perfect for annual reports. Financial

information, program results, and other statistics usually relegated to boring pie charts and

bar graphs can be easily conveyed in a creative format that is easily shared.

We are collecting examples of annual report infographics on the wiki and also on our

Nonprofit Annual Report Infographics Board on Pinterest.

You can hire a designer to create your infographic, or you can use Photoshop,

PowerPoint, Visually or other publishing software.

http://nonprofitannualreports.wikispaces.com/Annual+Report+Infographics

http://www.pinterest.com/npmktgd/nonprofit-annual-report-infographics/


ANNUAL REPORT MINI-SITE

If you want to truly makeover your annual report without significantly reducing the

amount of content you share, consider creating a mini website especially for your annual

report. You can put it on its own domain or create it as a subsection of your main site. Your

mini-site might include a combination of photos, text, video, audio, downloads, and

interactive questions that let your supporters see what they care most about.

W.K. Kellogg Foundation’s 2012 Annual Report Mini-Site

http://annualreport.wkkf.org/


See nonprofitannualreports.wikispaces.com for more on these “new and improved” formats!


Producing a Traditional Annual Report

While I advocate using one of the “new and improved” approaches, some nonprofits

will be more comfortable with the familiar territory of a traditional annual report, which is

typically 8-20 pages long, and often much longer when lots of photography is included.

COMMON SECTIONS OF A TRADITIONAL ANNUAL REPORT

Exactly how you structure your annual report is up to you, but a traditional annual

report will include the majority of these sections:

• Table of Contents. It’s a good idea to include a table of contents, especially if the report is longer than eight pages.

• Executive Letter or Message. Keep the letter short and try very hard to make it insightful and interesting. (See Writing Your Executive Message)

• Mission and Program Overview. Include a brief summary of what your organization does and why.

• Major Achievements or Highlights. Create a separate box or page near the front of the report with your key accomplishments in bullet form.

• Body of the Report. Get creative in organizing the main text of your report so that it communicates your organization’s achievements in a clear, cogent way (See the Themes section). Be selective in what you highlight. Remember, your annual report is not meant to be a comprehensive record of everything you did. It’s a summary of the major accomplishments of the year.

• Profiles or Case Studies. These are great ways to show success, especially if your work has human interest appeal or if you don’t have hard numbers to illustrate your success.

• Photos and Graphics. Your report needs visuals. Photos and graphics make a report much more interesting and will convey your message more clearly than words alone.

• Financial Information. Go beyond the standard forms and include pie charts or graphs and an explanation of the numbers in the text.

• Lists. Include staff names and job titles; board names and affiliations; major donors, often within dollar-level categories; and regional offices or affiliates, with contact information. Don’t overlook these lists. Some readers will go to them first to see who you know and who else supports you (and to check that their own names are spelled correctly).

• Request for Help. Tell readers how they can help you by listing the types of donations accepted (e.g., Can you accept gifts of stock? Do you offer charitable gift annuities or other planned giving tools?). You can also list ways that gifts are used by the organization.


THE PROCESS OF CREATING A TRADITIONAL ANNUAL REPORT

No matter when you plan to release the report, give yourself at least three to four

months to put it together, from the time you first meet to discuss the content to the day

you start distributing it. Watch how fast the time can pass by:

• 2 weeks of thinking, organizing

• 4 weeks to get final text

• 4 weeks to get final design

• 2 weeks printing

• 1 week in the mail (mailing time depends on class of mail)

= 13 weeks, or over three months

If you are like most people, you won’t be able to work on the report full time, and

you’ll have to take other people’s schedules into consideration when getting your drafts

reviewed. Once you take all of this into account, it is easy to see how it can take three or

four months to complete a project such as an annual report.

Below are the basic steps you’ll need to follow to get your annual report out the door.

1. Gather information on what staff members believe are the major accomplishments for the year.

2. Meet with the management team to decide on a key message and how to organize the report (e.g., a theme for the year).

3. Develop an outline. Get comments on it and revise it until there is general agreement on the approach.

4. Draft the text and get comments. Redraft and get comments again.

5. Gather photos and artwork. Begin discussing the project with a designer.

6. Gather lists of board members, funders, etc.

7. Gather financial info and think about the best ways to present the data.

8. Finalize the text.

9. Design the report.

10. Get final approvals from management.

11. Print the report and create an online version.

12. Distribute the report.

13. Evaluate the report and the process for creating it. What should you do differently next year?


DEVELOPING A THEME FOR YOUR REPORT

Your take-home message and accomplishments are what you want to say. Now you

need to decide how to say it. Most nonprofits organize their annual reports to mirror how

the organization itself is set up. If you implemented three different programs last year, your

annual report will include three sections describing those programs.

While that might be the easiest way to structure an annual report, it’s probably the

least compelling way to tell your story. You can make a long annual report more interesting

and engaging by organizing it using a more creative approach.

Follow Your Mission Statement or Strategic Plan

This approach is almost as easy as doing it by program, but it forces you to link your

work back to your mission statement. Go back to why your organization exists in the first

place. What is it that you are trying to change in the world today? What goals are you

pursuing to bring about that change? Organizing your annual report according to the parts

of your mission statement or goals in your strategic plan is a good approach for

organizations that need to demonstrate that they are making progress in particular areas.

Think Magazine

Imagine that a magazine publisher wants to dedicate an entire issue to what your

nonprofit did last year. What articles would appear in the table of contents? What headlines

would appear on the cover? Telling your story through a series of short feature articles is a

good way to emphasize a handful of accomplishments that you are particularly proud of.

Construct a Timeline

Tell your story month by month. This approach works best if you have been working

towards something big and can show significant milestones along the way or when the

environment you are working in is changing rapidly.

Develop a Theme for the Year

This is often the best approach for a long report. Themes can reflect major events in

your organization during the year, or events in the world around you. Or they can simply be

a creative structure in which to tell your story more powerfully. Carry your theme

throughout your report. Your report’s graphic design, title, and executive message should

all reflect the theme.

One place to look for themes is in memos you’ve written to your board or funders

summarizing your recent work. Changing the theme from year to year is a good way to

make your report seem fresh, even if your accomplishments don’t change much over time.


Below are 14 interesting themes used successfully by nonprofit organizations. Each

theme is generic enough that no matter what your organization does, you can probably

apply the theme or some variation of it to your accomplishments.

Each theme includes an explanation of who I saw using it and how. I also provide

some thought-provoking questions to get you thinking about how you can apply the theme

to your own programs.

PEOPLE

Who Used It: AARP

How It Was Used: The report was organized by sections titled Involved People, Secure

People, Healthy People, and Independent People. AARP discussed its programs and

accomplishments in terms of the good they do for people, e.g., making them feel more

involved, secure, healthy, and independent.

How You Can Apply It: Think about your organization’s mission and goals. If you are

achieving your goals, what adjectives would describe the people who you work with or

serve? A twist on this theme would be to change People to Places.

EMBRACING COMMUNITIES

Who Used It: CDC Foundation Report to Contributors

How It Was Used: Even though they work in many places, the CDC Foundation wrote their

report using profiles of just four cities to illustrate their activities and accomplishments.

How You Can Apply It: For each of your major programs or accomplishments, identify a

community, organization, or group of people who exemplify what the program is all about.

Use the profiles to demonstrate how each program works on the ground.

IDEAS INTO ACTION

Who Used It: World Resources Institute

How It Was Used: The report was comprised of profiles of staff within the organization

describing how their programs first began, how they have grown, and what they have

accomplished.

How You Can Apply It: Ask the key people in your organization to talk about how each

program has grown from an idea into actions and accomplishments.


THE POWER OF ONE . . .

Who Used It: St. Paul Neighborhood Energy Connection

How It Was Used: Each program description in the report was labeled with several phrases

that begin with “The Power of One. . .” such as The Power of One Action, The Power of

One Family, The Power of One Building, The Power of One Native Plant, etc.

How You Can Apply It: Who or what makes a difference in your work? For each of your

major accomplishments for the year, what one thing mattered most? Use the answers to fill

in the blanks in this theme for your report.

A DAY IN THE LIFE

Who Used It: National SAFE KIDS Campaign

How It Was Used: The spreads in the report were set up with datelines (e.g., 8:07 a.m.,

Columbia MO; 10:38 a.m., Little Rock, AR) throughout one day. Each spread contained a

description of a national campaign and a profile of how the campaign is being implemented

in a local community.

How You Can Apply It: Think about the places where each of your programs is having a

positive impact and develop a series of spreads with datelines. Although this example is a

national organization implementing its programs in communities nationwide, it could easily

be adapted to a local or regional organization by using street-level examples.

A RECIPE

Who Used It: American Dietetic Association

How It Was Used: The report was organized as if it were a recipe, with the major sections

labeled Scoop, Mix, and Serve. Scoop described providing information to consumers. Mix

explained the organization’s partnerships. Serve outlined the leadership roles the

association has assumed.

How You Can Apply It: Look through a cookbook for words that could apply to the types of

work you do, as the ADA did with Scoop, Mix, and Serve. Or, think of the steps involved in

your work and write them up as a recipe for achieving your mission statement.

SOURCES OF STRENGTH

Who Used It: The Advocacy Institute

How It Was Used: The report included several profiles with individuals who participated in

each of the various Advocacy Institute programs. Each person profiled identified a personal

source of strength that was used as the title for the page. According to the introductory

text, collectively, these were the sources of strength for the Advocacy Institute as a whole.

How You Can Apply It: Where do the people in your organization find their strength? How

do these sources of strength relate to your programs? Tie your accomplishments to the

sources of strength.


GROWING, LEARNING, SHARING, LEADING

Who Used It: National Center for Nonprofit Boards

How It Was Used: The Growing section described their new services. The Learning section

described their research programs. The Sharing section described their publications and

workshops. The Leading section described their advocacy and partnerships.

How You Can Apply It: These four words are generic enough to apply to nearly every

nonprofit. How did your organization grow in the last year? What new information did you

obtain? How did you get your message across? What difference did your presence make in

your community?

THE MANY FACES OF . . .

Who Used It: The American Lung Association

How It Was Used: Using the theme, Many Faces of Lung Disease, the report included

several first-person accounts that relate to the organization’s specific programs. Examples

include Tyler Wood, living with asthma, and Rudy Smith, no longer a tobacco smoker.

How You Can Apply It: Fill in the blank with words related to your mission or goals and

include profiles of real people to illustrate the benefits your programs provide.

BEST. . . .

Who Used It: American Forest & Paper Association

How It Was Used: The association organized its report around three categories: Best

Practices, Best People, and Best Products. They described all of their work under one of

the three headings.

How You Can Apply It: Use the three categories developed by the American Forest & Paper

Association (practices, people, products) or come up with categories that better describe

the work you do. What are you best at in your field or community? What are the best

characteristics of your organization?

SEVEN QUESTIONS WE CAN’T AVOID

Who Used It: Direct Marketing Association

How It Was Used: The report was organized around seven critical issues for the direct

marketing industry at the time that were phrased as questions, such as Should Uncle Sam

be Allowed to Define All Email Marketing as Spam? and How Do We Get More People to Sit

Down and Start Shopping? Under each question, there were three subheadings: The Issue,

What This Means to You, and What the DMA is Doing About It.

How You Can Apply It: This is an excellent way to provide education on issues of

importance to your organization while also speaking about your accomplishments. What are

the critical issues in your field and what are you doing about them? Phrase each issue as a

question and then explain what you are doing on each topic.


TRANSFORMING. . .

Who Used It: Habitat for Humanity International

How It Was Used: The theme Transforming Lives and Communities was illustrated

throughout the report with several personal profiles of the people helped by Habitat for

Humanity projects.

How You Can Apply It: What are you changing or transforming in your community or in the

world? Organize your accomplishments based on the transformations your organization’s

work is facilitating.

LASTING IMPRESSIONS

Who Used It: The Nature Conservancy

How It Was Used: The report included several stories describing the work they’ve done in

various locations, and each section was labeled with the lasting impression from the story.

Examples include Preserving a Way of Life, The Wild Beauty of Wetlands, and Heaven

Touches Earth.

How You Can Apply It: When you talk about your programs with others, what impressions

are they left with? What impressions of your daily work stick with you at the end of the day?

When you think of each of your organization’s accomplishments, what picture do you see in

your mind’s eye?

TEN WAYS WE’RE WORKING FOR YOU IN YOUR COMMUNITY

Who Used It: American Heart Association

How It Was Used: The report outlined ten ways that this national organization was

providing benefits to local communities, including Advocating for Your Health and

Improving Emergency Response.

How You Can Apply It: List ten (or any number) of benefits that your community or field

enjoys because of your presence or participation. Describe your accomplishments as they

relate to each of the benefits.

USE YOUR THEME TO HELP YOU TELL YOUR STORY

Few people will sit down and read your report cover to cover. That’s why it’s

important to use several different ways to get your message across within your annual

report. Use your theme to talk about your accomplishments in several different places

within your annual report.

The obvious place to tell your story is in the main body of the report, and it’s here

where you’ll have the most space to include the details of your accomplishments. But you

should tell your story in other places too.


• The Executive Message. This is the one place in your report where your executive director or board chair is speaking directly to the reader. (See Writing your Executive Message for details.)

• Captions. It’s well known that when people skim through publications, they read the captions more closely than the main text. Be sure that from start to finish, the captions on your photographs, artwork, charts, and graphs clearly tell your story. Don’t just name the people or places in the photographs; explain what those people have done to help you achieve your goals.

• Boxes and Pull-Quotes. Use the graphic design of your report to emphasize your accomplishments. You may want to include a box near the front of the report that lists your key accomplishments in bullet form. If you choose to emphasize just a handful of major accomplishments in the main text (which I recommend you do), include smaller boxes throughout the report to list additional accomplishments. You can also use pull-quotes throughout the report to highlight achievements.

PULLING TOGETHER YOUR LISTS

Traditional annual reports include several lists, usually at the back. Many donors will

flip back to these lists before reviewing the rest of the report because they want to see if

you have listed them properly. People who are considering a new donation will look at your

board and staff lists to see if they recognize any of the names.

Board and Staff Lists

You should always include your board of directors with their names, titles within your

organization (i.e. board officer positions), and their affiliations. You should also include

names and titles of executive-level staff members, and depending on the size of your

organization and the length of your annual report, you may choose to list the entire staff.

Donor Lists

The most important list of all is the donor list. You should list all of your major

donors/funders who either contributed during the past year and/or contributed in earlier

years for projects conducted last year (e.g., if you receive a three-year grant, you can

mention the donor in each of the three years’ reports, even if the money was received in

one lump sum in the first year). You can organize the list alphabetically or you can group

donors according to the level of contribution.

If you have several hundred donors, you’ll need to decide whether to print them all

in your annual report. In an annual report of 12 pages or less, I strongly recommend that

you keep your donor list to one or two pages. In longer reports, you should limit the list to

two or three pages. The space is better spent on your accomplishments and financial

information than on recognizing every single person who gave money.


To keep the donor list a reasonable length and the type size normal, many

organizations set a minimum dollar amount for inclusion in the annual report; donations

below that line are not included. These smaller donors can be recognized in other

publications, such as a newsletter. Some organizations photocopy the full list and insert it

into the annual report that way, rather than using expensive printed pages in the annual

report. The cut-off figure will vary from organization to organization. For some, $100 will

be appropriate; for others $1,000 or $5,000 makes more sense.

Be sure to triple-check these lists to make sure everyone who belongs there is

included and to ensure that names are spelled correctly. The first thing many of your

supporters will do upon receiving your annual report is check to make sure you’ve listed

them correctly. Misspelling a name could unintentionally turn off a donor and make the

next gift that much harder to get.

BACK TO THE BEGINNING: WRITING YOUR EXECUTIVE MESSAGE

The executive message is the letter to your readers from a leader in your

organization, usually the executive director or board chair or both, that appears at the

front of a traditional annual report. You can think of the executive message as an

executive summary of your report, but with more pizzazz than a typical executive summary.

I believe executive summaries and executive messages are easier to write after you’ve

written the main body of your document, so that’s why we are reviewing it now.

The best executive messages are those that make an emotional connection with the

readers and set the tone for sharing the contents of the rest of the report. It’s easier to add

an emotional element to the executive message than to other parts of the report, because

the letter is one person speaking directly to another. The letter is a good place to reiterate

your organization’s values and dedication to its mission. The letter can also remind readers

about the need for your organization by putting your work in the context of other events.

At its heart, your executive message should summarize your major accomplishments

and drive home your key message. It should set the tone for the rest of the report by

clearly tying into the theme (if you have one). If you have bad news to share, it should be

included here with an explanation of how the problem is being resolved. Close the letter

with an upbeat preview of the year to come.

I recommend keeping the letter to four or five paragraphs and certainly to one page.

That means you’ve got a lot to accomplish in just a small amount of space. Be sure to give

yourself plenty of time to write several drafts of the letter to get it just right. Limit

yourself to one letter only. In cases where the executive director and board chair both want

their signatures included, urge them to write a joint letter rather than two separate letters.


The reality is that most executive messages are dreadfully boring or irrelevant. It

seems like they are often written in a vacuum, with little regard for what’s in the rest of

the report. Or, they are long-winded, meandering letters from board chairs or executive

directors who want to talk about their pet projects or their personal world views, without

regard for the accomplishments or theme within the report.

Don’t waste space in your annual report with that kind of letter. Make your executive

message an integral part of your report that fits with everything else going on between its

covers.

The executive message is also the one place in your annual report where it is okay to

talk briefly about the current year or the future. The remainder of the report needs to

address the past year only. Reports on current and future activities shouldn’t be included in

the report’s body, but it is fine to reference them in the letter as long as they do not

detract from the accomplishments in your report.

EXECUTIVE MESSAGE RECIPES

You might already have the perfect letter outlined in your head. But if you don’t, you

can follow one of these executive message recipes. In these outlines, each bulleted item

represents the contents of one paragraph of text. By no means are these the only ways to

produce a strong executive message, but if you are stuck, these recipes are a great place to

start. Once you get going, feel free to deviate from the recipe if you think you can improve

upon your letter.

1. Straightforward Results

This is the easiest approach, especially if you have gone through the exercise of

boiling down the year’s work into a handful of major accomplishments.

• Overall focus of last year

• Result #1

• Result #2

• Result #3

• Emphasis for the coming year

Sample Letter

Dear Members and Friends,

A year ago, the National Association of Paper Pushers (NAPP) launched

an ambitious, multi-faceted campaign to increase awareness about our

organization, our members, and the vital work we all perform. Today, I am

pleased to report the significant strides we’ve made in raising our public

profile with the business community, the general public, and the government

agencies that regulate the paper pushing industry. While more remains to be

done, here are a few of last year’s key achievements.


We held two special events: a fundraising dinner and silent auction, and

an awards banquet, both of which raised the visibility of the NAPP and our

profession in general. Twenty major corporations learned more about paper

pushing at our dinner and auction, an event that had the added benefit of

raising thousands of dollars for our organization. By recognizing outstanding

NAPP members, media outreach relating to our awards banquet highlighted

the best and brightest in our field.

Nothing keeps an industry energized like enthusiastic young employees.

To that end, our Education Committee developed a state-of-the-art curriculum

for high school students. Already adopted by several school districts, our

curriculum is revealing the rewards of the paper pushing profession to a new

generation and further expanding our public profile.

News of our high school curriculum, results of our fundraisers, and

important information about NAPP, our board of directors and members is now

available on a new website (www.paperpushers.org), unveiled last winter.

Developed with the help of a member advisory committee, our website is

linked with sites relating to dozens of related services and industries. In the

few months since we launched it, our site has already seen an impressive

number of hits.

As we prepare for a new year, we will continue to raise NAPP’s public

profile by improving our website, refining our new curriculum, and hosting

interesting events to involve potential clients and the public in our activities.

We’ll also set our sights on a new project that complements this year’s

awareness-raising activities. Our primary objective next year is to complete

work on a certificate program for our members. The program will encourage

members to reach higher levels of knowledge and sharpen their skills, thereby

setting high standards for our profession. The certificate program will not only

improve members’ professionalism. It will also increase others’ respect for

NAPP, our members, and our work. We welcome your suggestions as we create

and polish this exciting new program.

Sincerely,

Jane Jones

Executive Director


2. Responding to New/Urgent Threats

This approach is a great way to emphasize a sense of urgency with your supporters —

urgency that motivates people to provide additional support to you. Think of “threats” as

events or trends that threaten your mission or the people you serve.

• Overall summary of organization

• Description of urgent threats

• Response to the threats (e.g. newer initiatives)

• Overall growth of organization

• Thanks for support

Sample Letter

A Message from Our Executive Director

Since the inception of the National Association of Paper Pushers (NAPP)

ten years ago, it has been our mission to increase the professionalism and

skills of our members through ongoing educational and networking programs,

while raising the level of respect the general public has for our profession

through outreach and advocacy. The growth and loyalty of our membership

over the years is a testament to the quality programs and services we provide.

Again this past year, our members benefited from myriad NAPP educational

programs, as well as from the efforts of expert staff working to protect the

interests of the paper pushing profession at both the state and federal levels.

NAPP lobbyists and policy experts got little rest as lawmakers and

regulators in several states considered a raft of measures designed to restrict

the paper pushing industry. Had these proposals passed as written, they would

have created a flurry of contradictory, costly, and confusing new rules, causing

havoc throughout our field.

To head off this potential catastrophe, the NAPP put government affairs

at the top of its agenda. As your advocates in statehouses across the country,

NAPP staff attended numerous regulatory meetings and legislative hearings,

educating officials about the impact of proposed rules and laws on paper

pushers nationwide. While proposals in some states are still pending, we were

largely successful in persuading legislators and regulators to rewrite and

amend proposed changes to produce sensible, fair-minded regulations that

don’t unduly burden our members.

NAPP’s presence at government hearings and meetings also served the

purpose of introducing many citizens, officials, and business leaders to our

organization. Coupled with a newly-launched high school curriculum, this

heightened visibility helped us to exceed our membership building goals this

year — increasing our ranks by 5 percent.


As we close another year, it is important to note the contributions

individual NAPP members made in ensuring our organization’s success on

several fronts. Dozens of you gave your own time to attend regulatory

meetings, providing invaluable, real-life testimony about how proposed new

regulations would have affected your businesses. Our members also stepped

up financially this year, taking in stride a long overdue increase in membership

dues. With your support, we increased dues income to $57,000 this year,

helping to produce the second straight year we have ended with a budget

surplus. Thank you. We look forward to working with you in the new year.

Sincerely,

Jane Jones

Executive Director

3. Responding to Ongoing Challenges

If you are working on a problem that doesn’t change much, you can still make your

response to that problem fresh by showing how you address the challenges on a daily basis.

• Extent of organization’s reach or growth over time

• Challenge #1 and response



• Call to action

Sample Letter

To Our Members and Friends,

Since its founding by a handful of senior administrative professionals

just a decade ago, the National Association of Paper Pushers (NAPP) has

blossomed into a 5,000-member organization. With local chapters in all 50

states, NAPP members form committees on dozens of topics to improve our

profession, network at annual conferences and working group meetings, and

raise our profile with the public through outreach activities. Our recent

creation of a curriculum for high school students promises to extend NAPP’s

influence further, as a new generation learns the benefits of a career in paper

pushing. As we’ve reached milestones and matured as an association in the

past year, we were called upon to meet several ongoing challenges. Our

responses have resulted in keeping NAPP vibrant and strong.

We started last year in the wake of two years of declining revenues — a

situation that forced us to put several proposed new programs on hold. We

took a multi-pronged approach to NAPP’s financial troubles: raising our

membership dues, increasing our grant income, and holding two successful


fundraisers that had the twin benefits of raising both dollars and visibility for

our group. Today, I am happy to report that we are ending the year in the

black. With revenues just over $360,000, we surpassed our previous all-time

high of $350,000.

With “paper pushers” in our name, it might not come as a surprise that

NAPP hasn't been at the forefront of the internet revolution. Some of our more

wired members began warning two years ago that NAPP risked losing members

and becoming obsolete without a significant overhaul of our online presence.

Our staff listened, and last year hired a webmaster who, with the help of a

committee of members, revamped NAPP’s new website

(www.paperpushers.org) in October. The site expands public access to our vast

educational resources and raises awareness through links to related

organizations. Praise for the site’s design and effectiveness have been pouring

in.

As in previous years, perennial bills and proposed regulations restricting

the practice of paper pushing surfaced again at statehouses across the country.

And, as they have before, NAPP’s crack team of lobbyists and volunteers met

with legislators and regulators to ensure that the new laws and policies that

were enacted are sensible and fair to members of our profession.

In all of these efforts, NAPP’s executive staff was gratified and

encouraged by the dedication and generous support of our membership. I look

forward to working with many of you on these and new initiatives in the

coming year. Your support and ideas are vital to NAPP’s success This important

work can only be accomplished with your help.

Sincerely,

Jane Jones

Executive Director

4. In the Headlines

If you work in a field that gets lots of press coverage or that is affected by national

or world events, this approach can work for you.

• Summary of recent national/world events

• Organization’s response

• Bullet points on key achievements

• More outside issues to keep us motivated

• Salute to supporters


Sample Letter

A Message from the Executive Director

The past year heralded some bad news in several business sectors.

Media accounts of damage caused to consumers by inept stockbrokers,

unqualified attorneys, and uninformed insurers peppered the headlines in

cities around the United States. This caused all of us in the business world to

question whether we might need to shore up our own credentials to avoid

similar public relations nightmares.

As a first step to ensuring the top-notch, consistent qualifications of our

members, the National Association of Paper Pushers (NAPP) started developing

a new paper pushers certificate program. Begun during a working group at our

annual meeting in January, the program is now almost complete. When it is,

members will be able to improve their skills and earn the certificate online

through our newly launched website (www.paperpushers.org). Those who

participated in an NAPP certificate pilot program last fall reported that this

new educational offering promises to provide the following benefits:

• improves knowledge and hones skills,

• ramps up professional standards in our field,

• helps paper pushers perform their jobs better, and

• increases professionalism, which leads to greater respect for our field.

Through feedback from users of the pilot program, NAPP plans to fine

tune the certificate program and make it available to all members by the

middle of next year. As professional organizations across the business

landscape seek to respond to calls for greater professionalism, our new

program will put NAPP on the crest of the wave. Moreover, as other

professions raise their own standards and prerequisites for licensure in the

wake of last year’s crises, we will play a leadership role in advising other

professional associations, and our members will be poised to contract to

handle the additional paperwork that will undoubtedly result from the changes.

Many thanks to members and staff who provided time and expertise to

develop the new NAPP certificate program. As we get ready for its official roll

out, we appreciate your dedicated support and continued enthusiasm for

NAPP’s mission.

Sincerely,

Jane Jones

Executive Director


5. Sharing Bad News

It’s important to be honest in your annual report. If your organization had a bad year,

you need to be forthright about it. The executive message is a good place to deal with the

bad news so the body of the report can emphasize the good things that happened.

• Summary of key achievements

• Describe problem honestly, labeled as a “challenge” or “transition”

• How the problem has been or is being addressed and any “silver lining”

• Positive look forward

• Thanks for continued support

Sample Letter

Dear Members and Friends,

The National Association of Paper Pushers (NAPP) has accomplished

much this year. With help and support from our members and supporters, we

just completed our second consecutive fiscal year in the black, with revenues

just over $360,000 and a surplus of $4,350. Our good financial news was made

possible, in part, by two very successful events, a silent auction and a

fundraising dinner, held last spring and summer. I’m also happy to report our

success in developing a new paper pushing curriculum for high school students,

and the recent launch of our new website: www.paperpushers.org.

Despite these significant achievements, this year also came with

challenges as we saw the continued erosion of our membership base. Over the

last three years, NAPP’s size and reach declined from 7,000 members to just

under 5,000. The loss of so many members is obviously unsustainable over

time and has forced NAPP to take a hard look at its mission and programs.

Through the work of an ad-hoc committee convened for this purpose,

I’m happy to report that we have taken a number of steps in the past few

months that have begun to turn the tide. We discovered that the key reason

people joined NAPP soon after its inception ten years ago was a desire to

improve their professional knowledge, expertise, and standing in the

community. Members began leaving the organization, we learned, chiefly

because they felt NAPP was not meeting those needs. In response, we took

two steps this year by hosting an awards banquet to provide recognition and

publicity for outstanding paper pushers and by beginning a certificate program

that will enable members to earn new credentials to boost their careers. We

also created and marketed a high school curriculum on paper pushing to

encourage more young people to join the profession and our organization in

the future.


Within a few weeks of announcing these new initiatives, scores of ex-

members returned to the organization. We even signed up a few new faces,

and I am confident NAPP is on its way to becoming a stronger, reinvigorated

association. Challenges often open new windows of opportunity, and that’s

what has happened here. The complete overhaul of NAPP’s website came as

part of a process to modernize the organization and make it more relevant to

existing and potential members.

As we close this year, I would like to thank those of you who assisted us

in our membership building effort and who are continuing to volunteer to help

on an ongoing basis. Thank you also for stepping up financially, taking in stride

an increase in membership dues that was made necessary by our declining

membership base. With your enduring support, NAPP looks forward to clearing

this temporary hurdle and providing outstanding services and support to its

members for decades to come.

Sincerely,

Jane Jones

Executive Director

DESIGNING AND PRINTING YOUR ANNUAL REPORT

Your annual report should look as nice as possible, but that doesn’t mean it must be

printed in full color on expensive paper. A well-written report with a clean, simple design in

one or two colors will be more impressive than a poorly written report printed in full color

on glossy paper.

If you aren’t sure how your annual report should look, spend some time looking at

other annual reports to discover what you like and don’t like. See how other organizations

in your field or geographic area are designing their reports. Show the person who will

design your report several samples that are in line with the look and feel you are after. It is

also helpful to show a designer samples that you don’t particularly care for.

Always Include Photos of people

No matter what kind of work you do, it’s important to put a human face on it. Even if

your work has very little to do with people, do your best to make a connection between

what you do and how people benefit from it.

That’s why every annual report needs photos of people. Use those you’ve taken

throughout the year, take some specifically for the report, borrow from friends or

colleagues, or purchase them from stock photography houses. Type “royalty-free stock

photos” into your favorite search engine for several online photo Web sites.


Be sure that your photos convey a positive message. If you work in the fields of hunger or

domestic violence, for example, you might be tempted to include lots of photos of starving

children or battered women. Don’t do it. One or two carefully selected photos of that kind

may work. The majority of the photos should convey the positive difference you are making,

rather than an ugly reality. Readers need to be uplifted by your annual report, not

depressed by it. A horrific photo is more likely to make a donor want to turn the page of

your annual report than read the text on it.

Write an Engaging Caption

The photo’s caption is every bit as important as the photo itself. I highly recommend

that every photo in an annual report have an interesting, descriptive caption. Don’t just

name the people in the photos; explain what they are doing and why. It’s been proven time

and again that people who skim through documents read captions before anything else. Be

sure your captions talk about your achievements. If a reader looked at nothing but the

photo captions, would they get a sense for your achievements?

Give Readers Something Extra

Producing a long, printed annual report is expensive. To get your money’s worth, add

a little something extra to your report that will get your readers to look at it more than

once. Consider adding a page of facts and figures they might want to refer back to, a

checklist of things they can do to make a difference as individuals, or a list of helpful hints

related to your mission. Resource listings of websites and phone numbers are also helpful. If

your budget allows, include a pull-out poster or create your annual report into the form of

a wall calendar, with a section of the report’s text included on each month.

Keeping Production Costs Down

The printing and mailing costs for annual reports are often cited by nonprofits as the

primary reasons they don’t develop an annual report. There is no way around it. Printing

and mailing are expensive; however, there are several things you can do to keep those costs

reasonable.

Several variables go into print costs. The page count and the number of copies you

need are the biggest factors, followed by the number of inks. Keep your report as short as

possible while still including everything that needs to be there. For a small/medium

nonprofit, an 8- or 12-page report is plenty. Larger organizations will usually produce longer

reports, but always keep your page count in multiples of four, including the covers (inside

and outside, every side of the paper counts). Going with one or two colors will be less

expensive than full color. (For those of you who are not familiar with traditional offset

printing, don’t ask for bids on three-color jobs; if you want to use three colors, get full

color, also known as four-color process, which will cost less than a three-color job.)

Using the same paper for the cover that you use for the inside pages (called a self-

cover) will be less expensive than using a separate cover stock. Design the back cover to be

a mailing panel to save on the cost of stuffing the report in an envelope; however, you do

risk your report getting roughed up in the mail this way.


Spend some time thinking about just how many reports you need. When you request

your print bids, ask for the number you definitely need, then ask for the price for additional

1,000s. In other words, you might request a bid for 2,500 copies, plus an additional 1,000.

The bulk of printing costs go into getting the first 1,000 printed, so additional copies are

usually not that much more expensive. If you will use them and they won’t just sit in a box,

it may be worth spending a couple hundred dollars for an additional 1,000 copies.

If you are interested in a much smaller number of copies (hundreds instead of

thousands), digital printing technologies may suit you better. Shop around. Ask several

printers how they recommend you get your project printed. Printers will have different

technologies available to them, and some will be able to handle smaller jobs more cost

effectively than others.

When you request print bids for your annual report, always use a standard bid

request sheet so each printer gets the same information. This will help you compare bids on

an “apples-to-apples” basis. Seek out a printer who is willing to answer your questions and

to help you make your project as cost-efficient as possible. Small changes in the trim size

of your document, for example, may save you money. A good printer will give you that kind

of advice.

Frequently Asked Questions

This will be our first annual report. Where should we start?

Writing an annual report can feel overwhelming and daunting, especially for first-

timers. Perhaps that’s why you haven’t written one in the past.

Always begin with your key message and your achievements. What three things are

you most proud of from last year? What aspects would you emphasize if you only have five

minutes to tell a stranger about your nonprofit’s good work? Your annual report should flow

from the answers to these questions.

If your organization has been around for several years, but this is your first attempt

at an annual report, you may be tempted to talk about all of your accomplishments over

the years. In this case, we recommend that you call the document a “progress report” that

spans a certain timeframe, e.g., 2008-2010. At the end of 2011, you would write an annual

report for that year alone.

What’s the most important part of an annual report?

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.


Is it okay to do an annual report every other year?

Yes, but then it’s called a biennial report, not an annual report. Some organizations

find it too time-consuming or expensive to produce a high-quality annual report each year.

If you choose to cover two years at a time, call it a “biennial report.” If you choose to

cover more than two years, or some period of time other than 12 months, call it a “progress

report.”

Who in our office should be responsible for doing the annual report?

Staff members in the communications or development offices most often coordinate

the creation of the annual report. However, senior managers and project coordinators can

be expected to contribute to the writing.

The person responsible for overseeing the development of the report should be very

well organized, should have a clear understanding of the report’s key messages and themes,

and should be able to clearly explain to others what they need to do to contribute to the

report.

Senior managers should be involved at all of the key decision-making points (e.g.,

message/theme development, what’s in the final outline and what’s not, and the overall

look of the report).

Should we talk about current activities or the future, or just the past year?

Annual reports summarize what has already happened. Don’t treat your annual

report as a summary of your current work plan. You can talk about the present or the future

in the executive message or in a small section near the end of the report. Readers will

expect to read about recent accomplishments, not current activities or future plans.

We have some bad news. How do we talk about it in the annual report?

Very carefully. Honesty is extremely important in annual reports. Yet, your annual

report should also project a positive image of your organization.

The best way to handle bad news is to address it directly, but to surround it with

good news. The executive message is a good place to address the issue. Start with some of

your accomplishments. Then describe the bad news as a “challenge” or “transition” and

immediately explain what you have done to address it. Emphasize the positive results, or

the silver lining, associated with the bad news.

For nonprofits, bad news is often associated with their financial statements. In this

case, include a narrative that outlines the financial difficulty then immediately explain

what was done to address the situation.


If we only highlight our biggest accomplishments, won’t those staff members whose work is left out be upset?

The purpose of an annual report is to highlight the organization’s accomplishments as

a whole, not the work of any one particular staff member or project team. Look for other

ways to recognize the contributions of all of your staff members, so it doesn’t seem like the

annual report is the only place where good work is publicly recognized.

Should we mention that we get money via charitable federations?

If you receive any of your funds through the Combined Federal Campaign, United Way,

EarthShare, or other charitable federations, it's appropriate to include the federation’s logo

and your identification number in the financial section of your report. It’s a good way to

promote this giving opportunity, and it also lets readers know that you are meeting the

financial standards required by the federation.

What needs to go in the financial section?

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.

What if we lost money or our financials don’t look very good?

If your financial statements show a deficit, you need to explain why your

organization is losing money. This case demands a narrative explanation, regardless of what

else you include in the financial section of your report. Be brief, but honest. Explain why

you spent more money than you brought in and describe the steps you are taking to remedy

the problem.

What is a good ratio of program-to-budget information in an annual report for a nonprofit organization?

I’d go with the 80-20 rule on this one. Eighty percent should be programmatic info

and twenty percent should be financial reporting. If you have a 12-page annual report (self-

cover), that means you’d have one two-page spread on your financials. That’s plenty,

considering you also need to save some space for donor lists.

How do we acknowledge anonymous gifts?

If you have several donors who wish to remain anonymous, you can list “Anonymous”

once or you can include a short statement at the beginning or end of the list thanking all

the donors who wish to remain anonymous.


How many pages in our traditional annual report should we devote to donor lists?

Shoot for 10-20% tops. In a 12-page report, try to get the lists all on one page, or at

most, one spread.

It’s important to recognize your organizational funders and individual donors in your

annual report, but not at the expense of adequately explaining your accomplishments and

your financials. If you find yourself using page after page for donor lists, and you can’t

afford a longer report, it is time to find another way to recognize lower level donors.

Can someone else actually write the executive director’s letter, or does she have to do it?

Yes, it is okay for a staff person to provide a draft of the letter to the person who

will actually sign it. If you are not the person whose name will be on the letter, but you are

the person working on the body text/theme, at a minimum, provide an outline of the letter

to the executive director or chair who can then fill it out with his or her own words. You

may even be asked to draft the full letter for review. Ultimately, the person whose name is

at the bottom gets final say about the letter.

If it looks like we spent a lot of time and money on our report, won’t our donors think we wasted the money?

This is a very common concern among nonprofits, especially smaller organizations

that fear donors will be dismayed that resources were spent on an annual report rather

than the mission of the organization.

It is important to keep in mind that sustaining the organization is, in fact, part of

every nonprofit’s mission. If a nice annual report helps you raise a significant amount of

money for your project work, funds allocated to produce the report are well spent.

One theory of fundraising is that donors support winners — organizations that are

successful and look that way. If your organization can afford to produce an impressive

report, it may convey that you are successful, and therefore a good investment for donors.

That said, it is also important that your report truly reflects your organization. If

your budget is modest and everyone associated with your organization knows that, your

report should reflect that modesty.

If you are lucky enough to have high-quality graphic design or printing services

donated to you, you can thank the donors on the inside cover or inside back cover of your

report, which should help address any concerns.


How do I decide what date goes on the cover?

The dates on your annual report should refer to the time period the text covers. Most

nonprofits will issue their 2012 Annual Report in 2013 because they are talking about the

previous year’s accomplishments. If your fiscal year overlaps two calendar years, include

both years in your title, e.g., 2012-2013 Annual Report.

The exception to the rule is when you issue a “Progress Report” that summarizes

recent achievements without assigning them to a standard time frame. In that case, it is

acceptable to use the year the report was issued, e.g., 2014 Progress Report.

We are really stumped about what to include and how our report should look. What should we do?

Reviewing samples from other organizations, especially those in your field, is a good

place to start when you are stumped. Go to the website of organizations in your field or in

your community and look at their reports. What topics are they addressing? How are they

describing their accomplishments? How does your work compare with theirs? Coming up

with a theme can also help you see how your accomplishments can fit together.

Should we include articles and photos of our fundraising events over the last year in our annual report?

I generally discourage it, with three exceptions: (1) You can clearly connect the

fundraising event to an accomplishment, e.g., the money raised at the event paid for xyz,

which resulted in xyz. You should still lead with the accomplishment, but you can talk about

the fundraising a few paragraphs into the section. (2) Fundraising event photos are the only

decent photos you have. Event photos are better than no photos at all. (3) You include the

text and photos in the financial section of the report.

When should we release our annual report?

It is entirely up to you and how you intend to use the report. Many nonprofits launch

major fundraising campaigns in the fall and early winter months so their donors can get in

last-minute tax-deductible contributions, and so foundations and corporate giving programs

can spend their remaining budgets for the year. If you plan to use your annual report for

this type of fundraising, release your report in the late summer or fall.

If you are trying to get readers to respond in other ways, such as by attending a

major event or renewing a membership, you can choose to issue the report in accordance

with those schedules. Also, your board may expect to see the annual report at a certain

time of year.

If no particular event or campaign is driving your schedule, plan to release your

report within three to six months of the end of your fiscal year.

Just be sure to give yourself at least three to four months to put it together, from

the time you first meet to discuss the content to the day you start mailing it.


What To Do After You’ve Published Your Report

MEASURING ITS EFFECTIVENESS

Whether your annual report is considered a success depends on what your goals for it

were. If you saw it primarily as a tool for fundraising, calculate how much money was

raised from the appeal letter that accompanied the report. Track the number of prospects

who received the report and have now turned into donors.

Measuring the goodwill and positive feelings about your organization that were

generated by the report is a bit harder to do. Ask a sample of the people who received it

(donors, board members, etc.) what they thought about the report and what impressions

they were left with after reading it.

PREPARING FOR NEXT YEAR

If you keep your annual report in mind throughout the year, it will be much easier to

write when the time comes. Below are five things you can do throughout the year to

prepare for annual report time:

• Save regular reports. You probably already write progress reports to your board and funders on a regular basis. Stash copies of these reports into an annual report folder so they will be in one place when you need them.

• Keep a journal. Take a few minutes once a month to write down what’s going on with your organization and how you feel about it. Ask others to do the same. This is a good way to preserve the emotion, excitement, and energy that comes with working in the nonprofit sector but that is easy to forget when faced with writing an annual report.

• Take lots of photos. Buy a digital camera and get in the habit of taking photos. Catch not only the special events, but the everyday activities too. Take candid photos of people doing their work, as well as posed photos.

• Keep track of the numbers. Quantitative results are wonderful to have, but that means you have to keep track of what you are counting throughout the year. Decide in advance what elements of your work are easy to track with numbers and come up with an easy system to manage the data.

• Start your lists. If you know you want to recognize donors or volunteers in your annual report, start a running list of those names and add to it throughout the year, so you aren’t forced to create it from scratch when you write your annual report.


A Quick Review of What Not to Do: 10 Annual Report Mistakes Nonprofits Make

We've been looking mostly at what you should do to produce an outstanding annual

report. As a review, let’s look at what you shouldn’t do.

1. Focusing on activities instead of accomplishments. We want to know what you did, but more importantly, we 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.

2. Discussing administrative minutiae. Getting a faster internet connection in the office and new accounting software may be big accomplishments from where you sit at your desk, but they have nothing to do with your mission. Inspire donors with accomplishments related to your mission in your annual report and leave all the administrative items for your board report.

3. Emphasizing fundraising accomplishments. Donors expect you to raise money, but fundraising accomplishments should not be celebrated in your annual report on the same level as your mission-related accomplishments. Readers are more interested in what you did with the money than how you raised it.

4. Printing dense blocks of text with no photos. Yes, photos really are worth a thousand words. Many of the people reading your annual report won’t actually read it. Show them what you’ve been doing with photos. If you don’t have a digital camera, get one now. It’s also fine to use stock photography to illustrate your work.

5. Leaving captions off your photos. People are drawn to photos and they read photo captions before reading blocks of text. Use a caption to connect the photo to an accomplishment. If people read nothing but the captions in your annual report, they should still get a sense for the good work you did last year.

6. Leaving people out of the story. Donors will be more impressed with real stories about real people than with general summaries of your work. Explain what you have accomplished overall, then humanize your statistics with some personal profiles. Highlight how your work helped a specific individual. Share a volunteer’s story of how he or she made a positive difference.

7. Printing financials statements with no explanation. Many of your donors won’t know how to read a financial statement or won’t take the time to read it. Include a paragraph or two that explains in plain English what the tables say. Where does your money come from and how do you spend it? What are your main fundraising strategies? Did you implement any cost-savings measures this year?


8. Printing page after page of donor lists. Nonprofits need to strike a balance between using the space in their annual reports to discuss their accomplishments and using it to recognize donors. If as much as half of your annual report is donor lists, you should consider scaling the lists back to make more room for text and photos. Smaller donors can be recognized in other ways, such as lists in newsletters.

9. Misspelling donor names. If you want to sabotage a future donation, spell the donor’s name wrong in your annual report. If you are uncertain about a name, don’t guess. Check it with the donor. Also carefully check the names of government agencies and foundations that gave you grants. The names people call these organizations in conversation are often short-hand for the full legal names that belong in your annual report.

10. Not telling donors how they can help. Never leave a potential supporter hanging, wondering how they can help you. Once you’ve inspired them with the good works in your annual report, close by telling them how they can help you do more. How can they support you with their money or time? For example, do you offer planned giving options? Will you accept gifts of stock? Can they use a credit card? Be clear about the best ways to help.

Additional Examples and Resources

Visit nonprofitannualreports.wikispaces.com for more on “new and improved” annual report formats,

and read Kivi's Nonprofit Communications Blog at nonprofitmarketingguide.com/blog for more updates.

Also follow our boards on Pinterest http://www.pinterest.com/npmktgd/

and our YouTube channel

http://www.youtube.com/kivilm

where we have special sections for annual report examples.

Did you find a mistake or broken link?

Let us know at [email protected]

http://nonprofitannualreports.wikispaces.com/home

http://www.nonprofitmarketingguide.com/blog/

http://www.pinterest.com/npmktgd/

http://www.youtube.com/kivilm

mailto:[email protected]

Date post:	19-Aug-2020
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